Has anyone else compared ordering dual-fuel LNG tankers to a homeowner adding another bathroom to a residence?

Well now Peter Evensen has, and his appearance on the featured “commodores debate” panel at Thursday’s session of the Connecticut Maritime Association conference confirms the retired Teekay Corp chief executive has not lost his trademark sharp tongue in his years away from the public spotlight.

Shipowner confusion

It started with a panel of past and soon-to-be commodores in celebratory mode on the current good fortunes of most shipping sectors, with Evensen pointing out that most past markets have been ruined by owners over-ordering newbuildings.

Not this time.

“I’d love to say that shipowners have acquired discipline, but that’s not it, it’s the regulatory environment: no one knows what to order,” Evensen said, citing indecision over the next generation of propulsion systems.

This has even led owners to snub shipyards calling with discounts until there is more clarity on future fuels, Evensen said, adding he was not impressed by dual-fuel LNG technology offering perhaps a 15% reduction in carbon emissions.

“That’s like putting an extra bathroom on your house, it’s not going to raise the value of the house,” remarked Evensen, the 2013 commodore.

d’Amico International Shipping chairman and chief executive Paolo d’Amico. Photo: d’Amico International Shipping
Cesare d’Amico. Photo: d’Amico Group

Panel moderator and longtime fixture at the Connecticut Maritime Association Jim Lawrence was well aware that another commodore panelist — International Seaways CEO Lois Zabrocky — had just taken in three dual-fuel LNG VLCC newbuildings on seven-year charters in partnership with Shell, and quickly gave her a rebuttal.

Zabrocky took Evensen’s comment in stride, saying only that Seaways was “super excited” to have taken in the newbuildings.

She turned instead to Evensen’s observation that “a great fight” is in store when adopters of the new greener fuels lobby regulators force conventional fossil-fuel ships “out of existence”.

“Peter’s reflections are good,” Zabrocky said. “I would agree that it’s going to be a contest.”

Zabrocky said Seaways felt good about the partnership with Shell and hoped it would be a model for the future.

“I understand that in the 1970s and 1980s, that’s the way the tanker market was. It’s going to take some time to get back to that and bring charterers and owners closer again,” Zabrocky said.

But the dual fuel discussion was not quite over yet.

Another former commodore, Dorian LPG CEO John Hadjipateras, brought up statistics indicating that a large number of tanker newbuildings are being built with dual-fuel technology, particularly in the LNG and LPG trades.

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“All the VLGCs are dual fuel,” Hadjipateras said. “If you wanted one with a conventional engine only, it would be like ordering a Cadillac with a stick shift.”

The audience also heard from the man who was to be honoured as this year’s co-commodore, Paolo d’Amico, CEO of d’Amico International Shipping. He was to be installed along with his cousin, Cesare d’Amico, CEO of d’Amico Dry Cargo.

“I think the business model Lois discussed on VLCCs would be a step forward,” Paolo d’Amico said. “For an owner to order a dual-fuel tanker, you cannot do it if you don’t have the backing of a charterer. They cost more and [charterers] are not prepared to pay.”