John Fredriksen’s Frontline has opted to invest in a scrubber manufacturer and retrofit up to 36 of its tankers amid the belief it can save up to $6m per year on a VLCC.
Frontline announced yesterday it was taking a 20% stake in Feen Marine Scrubbers and installing the technology on 14 tankers, with the option to follow suit on a further 22 ships.
Robert Hvide Macleod, chief executive of Frontline Management, said: “We have and will continue to explore all options to meet 2020 emission standards. For large vessels, we believe that scrubbers make the most sense from an economic point of view.”
He told TradeWinds: “We estimate when using analyst consensus, a spread of between 0.5% fuel and HSFO in 2020 of $350 per ton. A VLCC with a scrubber will then save up to $16,000 per day, or between $5m and $6m per year in fuel expenditure.”
As reported yesterday, Frontline has taken its first position on scrubbers just a few days after John Angelicoussis locked two VLCC newbuildings into time charters showing a huge premium for scrubbers.
Macleod said Frontline’s decision to invest in Feen Marine, rather than simply be a customer, is two-fold.
“It is a strategic investment related to locking up a good deal on equipment that we believe will be increasingly hard to source,” he said.
“We are now in a position to retrofit a large number of our vessels and be in a preferential position as the bunker market goes through significant change. We also expect the investment itself to be accretive.”
Frontline has a fleet of 63 ships at the end of the first quarter. Its owned fleet of 46 ships, included 12 VLCCs, 16 suezmaxes and 18 LR2s.
