Scorpio Tankers announced that it entered into agreements with suppliers, engineering firms, and ship repair facilities to cover the purchase and installation of scrubbers on its remaining owned and financed leased LR2, LR1, and MR tanker vessels.
This number amounts to a total of 75 vessels, which will have been retrofitted with scrubbers between the second quarter of 2019 and the second quarter of 2020.
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The scrubbers and their installation are expected to cost between $1.5-$2.2 million per vessel, with 60-70% of these costs to be financed.
Earlier in October, Scorpio informed that it will install scrubbers to the vast majority of its vessels in order to comply with the 2020 sulphur cap, by the end of the first half of 2020. However, the company had not determined the exact costs or how such costs will be financed.
Before this decision, Scorpio Tankers was planning to use compliant fuel in order to comply with the upcoming regulations, as informed in June 2018. As the company explained, at that time it was evaluating scrubbers as well, but did not choose them because it did not have a reason to do so.
Nevertheless, because of regulatory, technological, and supply/pricing risks, Scorpio ultimately decided to install scrubbers as a way to comply.
Commenting on the occasion, Emanuele Lauro, Chairman & CEO, mentioned that the 2020 regulations are both disruptive to the shipping industry generally as well as a powerful demand catalyst for product tankers.
He also added that many shipowners will not be able to buy scrubbers and will rely on cleaner fuels to the benefit of ton-mile demand for product tankers.
Irrespective, our focus remains on operating the most competitive fleet in our marketplace, and this has led us to carefully evaluate and ultimately opt for the benefits of fitting hybrid-ready scrubbers on approximately 90 ships in our fleet.
