Diamond S Shipping will not have a trio of suezmax tankers retrofitted with exhaust gas scrubbers in time for the 1 January IMO 2020 emissions deadline.
Instead, the Connecticut-based owner will see the equipment installed some time in the first quarter of 2020, executives said today on a quarterly earnings call with investment analysts.
Chief financial officer Kevin Kilcullen said on the call that the first two suezmaxes to be retrofitted are already in yards and are expected out by the end of August.
“The one thing to note is that three scrubbers we expected install in fourth quarter have now been officially moved to first quarter of 2020,” Killcullen said, adding that the delay would affect Diamond’s capital expenditure timetable.
Shipowners generally have been pushing hard to install the exhaust filtering devices by the 1 January deadline so that they can take full advantage of what is anticipated to be a cost spread between high-sulphur and low-sulphur bunker fuel from that date.
The has been high demand in yards on that basis and most installers report that 2020 slots have little or no availability.
Commenting more generally on scrubber installations, Diamond chief executive Craig H Stevenson Jr said delays have been the rule, and could add to market inefficiencies that promise stronger rates for tanker owners.
“We’re seeing installation delays — instead of the 25 to 30 days (scheduled), it’s an additional 15 days longer than anticipated,” he said.
“This is actually causing a backlog and will create additional inefficiencies beyond what we originally anticipated.”
Following its merger with Capital Product Partners earlier this year, Diamond has a fleet of 68 tankers, 15 of which are suezmaxes.
Diamond has said it is considering retrofitting a further two suezmaxes with scrubbers, but will not fit the filters on its fleet of 52 medium range (MR) product tankers.
Diamond reported a second-quarter loss of $0.21 per share, beating analysts' consensus expectations of a $0.47 per share loss.
