Stena to spend up to USD85 million on scrubbers

Stena Bulk and Scorpio Bulkers have agreed letters of intent to fit scrubbers on their fleets. Credit: Dietmar Hasenpusch
Stena Bulk and Scorpio Bulkers have agreed letters of intent to fit scrubbers on their fleets. Credit: Dietmar Hasenpusch

Stena Bulk has followed the lead of tanker and bulker operator Scorpio by confirming plans to fit scrubbers to its 15 Suezmax and IMOIIMAX tanker fleets.

The all-inclusive cost, which includes the price of the scrubber, installation, and loss of hire, will be USD3–4 million per ship, Stena Bulk president and chief executive Erik Hånell told IHS Markit on 16 October.

The actual cost would depend on the type of ship, where installation will take place, and the possibility of retrofitting some parts while the ship is in service, he added.

Under the turnkey agreement with China’s Shanghai Bluesoul Environment Technology Co, Stena has six options to fit scrubbers before the International Maritime Organization’s (IMO’s) sulphur emissions curbs come into force on 1 January 2020.

“By installing scrubbers, we will be well-equipped to meet the 2020 regulation and are protected from price volatility as well as fuel shortages,” Hånell added.

“The reasons are, of course, partly business-driven, but equally important, we have a big worry over the supply of fuel that is compliant and works technically. On that, there is a lot to prove so far,” he told IHS Markit.

Stena Bulk has chosen open-loop scrubbers with water cleaning.

He indicated that, while market predictions suggest there will be enough compliant fuel, “there are opportunities already available today to lock in some of the uncertainty, which might be appealing when looking for a more secure investment”.

The Stena group has had a collaborative agreement with Shanghai Bluesoul Environment Technology for more than a year.

Stena confirmed it would fit scrubbers hours after Scorpio Tankers and Scorpio Bulkers said they had agreed letters of intent with suppliers, engineering firms, and ship-repair facilities to fit scrubbers on their tankers and bulk carriers.

The total cost could be about USD290 million.

Scorpio Tankers said the deal covered about 75 owned and financed-leased LR2, LR1, and MR tankers.

Scorpio Tankers already has an agreement to fit scrubbers to 15 LR2 tankers.

Scorpio Bulkers said that “substantially all” of its fleet of 57 owned and finance-leased Kamsarmax and Ultramax ships would be fitted with scrubbers.

Scorpio estimated the cost at between USD1.5 and USD2.2 million per ship and anticipated 60–70% of the cost would be financed.

Scorpio Tankers said the work would be done between the second quarter of 2019 and second quarter of 2020, while Scorpio Bulkers installation would be carried out from the second quarter of 2019 to the third quarter of 2020.

Scorpio chairman and chief executive Emanuele Lauro said, “We have long maintained that the IMO 2020 regulations are both disruptive to the shipping industry generally, as well as a powerful demand catalyst for product tankers. Although many well-capitalised and publicly listed shipowners can source capital and publicise their intentions to pursue scrubbers, most of our industry cannot and will rely on cleaner fuels to the benefit of tonne-mile demand for product tankers.”