Epic Gas boss puts faith in LSFO, eschews scrubbers

Epic Gas’s Epic Bermuda. Credit: Dietmar Hasenpusch
Epic Gas’s Epic Bermuda. Credit: Dietmar Hasenpusch

Epic Gas chief executive officer Charles Maltby appears to be inclined towards low-sulphur fuel oil (LSFO) in order to meet the International Maritime Organization’s 2020 (IMO 2020) sulphur cap, which limits sulphur content in marine fuel to 0.5% from the present limits of 3.5%.

Shipowners can burn liquefied natural gas (LNG), low-sulphur fuel oil, alternative fuels such as methanol, or install scrubbers to comply with the new regulation.

Maltby made his thoughts known when Epic Gas announced a USD1.3 million net profit for the third quarter of 2018, recovering from a USD5.7 million loss in 3Q 2017.

Maltby said, “We maintain a regular review on the impact of IMO 2020. There is not a ‘one solution fit for all’, and every owner will consider in the light of their unique fleet and trading circumstances.

“Under the current known costs of suitable scrubber technology, the relatively low fuel consumption of our vessel type, alongside the anticipated availability and price differentials between low- and high-sulphur fuel, we are not planning to install scrubbers on any of our existing vessels.”

Maltby’s thoughts echo those of Precious Shipping’s managing director, Khalid Hashim, who said recently that he believes the availability of LSFO will not be an issue by the time the sulphur cap takes effect.

As of 30 September, Epic Gas had 38 vessels on the water. The vessels are all pressurised and semi-refrigerated liquefied petroleum gas (LPG) carriers.

Epic Gas achieved a profit as charter rates for LPG carriers began improving during 3Q 2018 following more than two years of weakness.

LPG export growth from the United States and healthy demand from China and India are fuelling the recovery.

Epic Gas’s fleet generated timecharter earnings of USD10,132/day in 3Q 2018, up from USD7,960/day in 3Q 2017.

Scrubbers remove sulphur from marine fuels as the bunkers are burned, but debate has surrounded its cost effectiveness.

In a recent interview with IHS Markit, Bjørn Højgaard, chief executive officer of the Anglo-Eastern Group, cited weight and stability issues with scrubbers.

On 28 August, Hong Kong-based bulk carrier owner Jinhui Shipping & Transportation said it is opting to burn LSFO as the company is unsure of the effectiveness of scrubbers.

However, others, such as Vale and Ciner Ship Management, are moving ahead with retrofitting plans.

Still other operators, like Ocean Network Express, are considering a combination of solutions to meet the sulphur cap.