Crude oil tanker company, Euronav, has purchased three very large crude carriers (VLCC) fitted with scrubbers for USD280.5 million. The company CEO Hugo De Stoop maintains that the move is not a U-turn on its scepticism of scrubbers but due to favourable pricing.
“When you look at the price, its not like we were presented with the opportunity of buying non-scrubber ships at USD91 million and scrubber-ships at USD93.5 million … All of the ships today that either have been delivered very recently or are on order have scrubbers. That has become a standard feature,” clarified De Stoop, in a statement.
Euronav is taking advantage of the dip in prices and disruption to the markets brought on by the outbreak of the coronavirus . The spread of the virus has impacted shipyards especially, with one of China’s largest shipyards in Jingjang near Shanghai remaining closed due to the quarantine rules.
There are currently 145 ships in total sitting idle in Chinese shipyards awaiting scrubber retrofitting, according to numbers provided by Clarksons Research, due to the coronavirus outbreak. This, in turn, has brought down the resale value of vessels, which spurred on Euronav’s most recent VLCC purchase.
“A strong rebound in the resale market for VLCCs is more difficult to forecast but clearly we have moved pro-actively in acquiring three modern vessels, believing there is longer term value at the price we have paid,” said Brian Gallagher Euronav’s head of investor relations to DPC sister magazine Safety at Sea (SAS).
Further, Gallagher maintained that the company would be open to buying more scrubber-fitted vessels in future, “Scrubber technology on ships being ordered or currently being constructed is now standard. It is far cheaper than a retrofit, no loss of earnings for a retrofit period for instance, and possessing a scrubber on three VLCCs going forward is an option for us.”
On whether Euronav will be open to retrofitting its current fleet with scrubber technology, Gallagher, speaking directly to SAS, upheld that the company will continue to monitor developments in the scrubber market, retrofit capacity and fuel spreads closely. “I see today in Rotterdam the spread between low sulphur fuel oil and high sulphur fuel oil is USD121 per ton, making scrubber economics challenging,” he concluded.
The three VLCCs are resales from Sinokar Merchant Marine and are currently under construction by DSME at a shipyard in South Korea. The scrubber fitted ships are expected to be delivered in Q4 2020 and in January and February 2021.