Golden Ocean Group Limited, a dry bulk shipping company, is set to equip a number of its capesizes with scrubbers to limit its exposure to high rates of fuel costs concerning the impending 2020 sulphur cap.
According to GOGL, the company has decided its first four options to place gas scrubbers on Capesize vessels. This decision is additional to the retrofit of scrubbers on 16 Capesize vessels that was announced in August.
Moreover, the scrubbers will be installed along with routine dry dockings, most of which are set for 2019 or early 2020. The company is still under assessment on whether and when to declare the last five options.
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The majority of the company’s Capesize fleet that is exposed to fuel costs will be retrofitted with scrubbers, in order to improve GOGL’s cash generation from 2020.
According to Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS, commented:
Our focus on operational efficiency resulted in stable costs and low off hire during the quarter, which also contributed positively to our results. The company’s operating cash flow during the quarter further strengthened our balance sheet, and we took advantage of market volatility to secure incremental time charter coverage prior to the recent drop in rates
Recently, Danaos and MPC also decided to install scrubbers on their ships. Danaos has pledged to install scrubbers on six vessels, while it also in discussions to install scrubbers on five more vessels.
For its part, MPC Container Ships signed agreements for the purchase of five scrubbers. They will be retrofitted on five vessels within the company’s fleet before 1 January 2020.
Until now, a large number of companies have opted for scrubbers. Namely, Maersk will add scrubbers to some of its ships, despite announcing last February that it would choose low sulphur fuel oil.
DFDS will also install scrubbers on 12 freight ferries on routes in the Mediterranean. Another company that chose scrubbers is Safe Bulkers. The company will install scrubbers in about half of its fleet, comprising five Kamsarmax vessels, thirteen Post-Panamax vessels and a Capesize vessel.
Maran Tankers will also install scrubbers on 13 vessels until 2020. Furthermore, Golden Ocean Group will install scrubbers on 16 Capesize vessels with options for 9 more, while Eagle Bulk Shipping will purchase up to 37 scrubbers.
Additionally, Japanese ONE sees low-sulphur fuel oil as the most viable option, with Jinhui Shipping and Transportation also believing that low sulphur fuel oil will be more beneficial.
Nevertheless, Euronav has stated that it considers scrubbers as a loop hole, which will make the sulphur cap even more complex. This is an opinion that Odfjell seems to share, as it announced that it will not invest in scrubbers, as this technology ‘does not make sense’.
