Frontline has ordered 12 more exhaust gas cleaning systems for installation aboard its tankers taking its total scrubber commitment to 20 ships.
The devices have been ordered from Feen Marine Scrubbers, in which Frontline acquired a 20% ownership stake in June 2018.
“Following the committed installations, over 40% of our owned fleet will be equipped with scrubbers,” said Frontline chief executive Robert Hvide Macleod.
“Notably, the majority of these installations will be performed prior to 2020, when new sulphur emissions compliance requirements go into effect.”
Macleod said further installations will be considered, and that the shipowner was “uniquely positioned” to access scrubber capacity from Feen Marine.
“We believe our actions will position the company to generate significant earnings for our shareholders,” he added.
“We calculate significant scrubber savings for both newbuilds and existing vessels, and support Frontline’s move to increase the scrubber penetration on its fleet,” said Arctic Securities.
“We model significant fuel savings for vessels with scrubbers in 2020 and estimate that scrubber-equipped VLCCs will earn $14,7000 per day more than vessels without scrubbers, using current 2020 MGO and HSFO futures.”
Arctic Securities added that this corresponds to a scrubber payback time of around seven months, and given that the marginal vessel will be a vessel without a scrubber in 2020, companies with scrubbers in the spot market will “get the full amount of fuel savings from 2020 onwards”.
Separately, Frontline said it has extended the terms of its senior unsecured revolving credit facility of up to $275m with an affiliate of Hemen Holding by 12 months to November 2020.
This follows the one-year extension announced in February, where the parties agreed to extend the maturity by one year to November 2019.
