Euronav Takes A Dip Into the Coronavirus Scrubber Price Advantage!

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  • Euronav breaks into the scrubber market amid COVID-19 price dip.
  • Purchased three very large crude carriers (VLCC) fitted with scrubbers for USD280.5 million. 
  • The price of buying non-scrubber ships are at USD91 million and scrubber-ships at USD93.5 million. 
  • The company’s move is not a U-turn on its scepticism of scrubbers but due to favourable pricing.

Crude oil tanker company, Euronav, purchased three very large crude carriers (VLCC) fitted with scrubbers, writes Gabriella Twining for an article published in Dredging and Port Construction.

Scrubber U-turn

Euronav, has purchased three very large crude carriers (VLCC) fitted with scrubbers for USD280.5 million. 

The company CEO Hugo De Stoop maintains that the move is not a U-turn on its scepticism of scrubbers but due to favourable pricing.

Scrubber a standard feature

De Stoop, in a statement said that the price of buying non-scrubber ships are at USD91 million and scrubber-ships at USD93.5 million. 

“All of the ships today that either have been delivered very recently or are on order have scrubbers. That has become a standard feature.” 

Price dip and disruption

Euronav is taking advantage of the dip in prices and disruption to the markets brought on by the outbreak of the coronavirus . 

Euronav’s VLCC purchase

  • The spread of the virus has impacted shipyards in China remaining closed due to the quarantine rules.
  • There are currently 145 ships in total sitting idle in Chinese shipyards awaiting scrubber retrofitting, due to the coronavirus outbreak. 
  • This has brought down the resale value of vessels.

“A strong rebound in the resale market for VLCCs is more difficult to forecast but clearly we have moved pro-actively in acquiring three modern vessels, believing there is longer term value at the price we have paid,” said Brian Gallagher Euronav’s head of investor relations to DPC sister magazine Safety at Sea (SAS).

The three VLCCs are resales from Sinokar Merchant Marine and are currently under construction by DSME at a shipyard in South Korea. 

The scrubber fitted ships are expected to be delivered in Q4 2020 and in January and February 2021.

Scrubber in future 

Gallagher maintained that the company would be open to buying more scrubber-fitted vessels in future. He added saying –

  • The scrubber technology on ships being ordered or currently being constructed is now standard.
  •  It is far cheaper than a retrofit.
  • No loss of earnings for a retrofit period.

Retrofit of current fleet

Gallagher said, after monitoring developments in the scrubber market, retrofit capacity and fuel spreads closely, Euronav will decide on retrofitting its current fleet with scrubber technology.

He added that today in Rotterdam the spread between low sulphur fuel oil and high sulphur fuel oil is USD121 per ton, making scrubber economics challenging.

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Source: Dredging and Port Construction

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