The VLCC owner has fitted scrubbers to 12 of its vessels and its annual financial results revealed that it had made 15 high sulphur fuel oil (HFO) bunkerings to date saving $14.6m versus buying the equivalent in compliant very low sulphur fuel oil. The average spread between the HFO and VLSFO price for the 15 bunkerings was $306 per tonne.
As of 31 December 2019 the company had paid $47.7m for the installation of exhaust gas cleaning systems. Trygve Munthe co-ceo said in an analyst call that this meant the company had already recouped 31% of the capex on the scrubber systems. Retrofits took an average of 37.2 days in the yard.
However, six more planned scrubber installations originally delayed till 2020 due to the high tanker market in the fourth quarter of 2019 now face further delays due the impact of the coronavirus on Chinese shipyards.
“But the problem is that this work is to be done in China, and we all know how the Wuhan virus has thrown that country into disarray,” Munthe was quoted as saying a transcript of the earnings call by Seeking Alpha.
“Right now, the shipyards are not in a position to even do the scheduled work, let alone any additional tanker retrofits. They simply do not know when their full labor force is going to be able to return to work.”
How long the retrofits will be delayed for remains unclear. “We are in continuous dialogue with our yard, and we'll certainly do as well as we can within the limits of what is possible. But at this stage, we simply cannot provide you more accurate information on when these six retrofits will happen,” he explained.