Safe Bulkers has become the latest bulker owner to join the apparent scrubber movement as of late.
The Polys Hajioannou-led company after today's close announced a plan with Cosco Shipping Heavy Industry to install Alfa Laval PureSOx scrubbers on about half of its fleet, mainly on its kamsarmax and post-panamax vessels.
Safe Bulkers said it will install scrubbers on five kamsarmaxes,13 post-panamaxes and on a recently acquired capesize while holding an option for one more. Installations are set for the second quarter through the fourth quarter of 2019.
Safe Bulkers is the third drybulk shipowner to announce scrubber plans in the past week.
Early last week, Eagle Bulk announced plans to install them on up to 37 vessels. Today, Star Bulk Carriers said it will equip its entire future fleet of 117 ships with the mechanisms.
The company said the scrubber-outfitted ships will run on high-sulphur heavy fuel oil while the other "smaller, more fuel-efficient vessels" will use compliant low-sulphur fuels.
Safe Bulkers expects the scrubbers will let the company take advantage of a two-tiered fuel market with a $250 spread between heavy fuel oil and low-sulphur fuels, president Loukas Barmparis told TradeWinds.
"We have ahead of ourselves a good investment," he said.
The company expects the installations will cost about $2m each, paid with cash on hand and additional debt.
“The retrofit of scrubbers is a demanding job involving the selection of reliable and durable equipment from manufacturer with extensive track record, detailed engineering studies and high quality of installation which should lead to reliable operations for years to come," Barmparis said in a statement.
"We are happy to cooperate with Cosco and Alfa Laval for this project and we believe that we will enjoy a short pay-back period for this investment based on price differential between HFO and compliant fuels after 1 January 2020”.
Safe Bulkers expects to minimise vessel downtime by prefabricating piping and foundation, choosing a Cosco shipyard that has installed the Alfa Laval scrubber and equipping groups of sister vessels.
The company plans to install the scrubbers on 10 ships during a scheduled special survey drydock, expected to last 32 days for the first vessel and 30 days for the remaining vessels.
Downtime during a scheduled dry docking as part of special survey is usually about 15 to 20 days, the company said.
During the same period, Alfa Laval will also install ERMA First Ballast Water Treatment Systems on the ships, allowing Safe Bulkers to fully comply with IMO and ballast water regulations.
LNG-powered vessels in the distant future
Barmparis said Safe Bulkers may switch over some its fleet to run on LNG but that would not be until 2030 due to the lack of availability of LNG-powered drybulk ships and adequate LNG supply network.
"It's premature for drybulk," he told TradeWinds.
I'm sure we'll go toward this direction but it will take time. We'll see how it goes."
