Owners move to add scrubbers to VLCC newbuilds pre-delivery

Technology starts to become the norm for large tankers contracted this year

A number of shipowners that contracted VLCC newbuildings in 2017 without exhaust gas emission scrubbers are in the process of upgrading their orders to add in the equipment or prepare them for easier retrofitting later.

TradeWinds has spoken to two large owners of tonnage in Europe and Asia that are considering adding scrubbers to their newbuildings pre-delivery.

One Asian-headquartered company says it is discussing the scrubber option with potential charterers of the ships and the shipyard where they are under construction.

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A senior official expects the equipment will “most likely” be fitted to the majority of its vessels at the time of delivery, with any remaining handed over as “scrubber-ready” or retrofitted.

A technical manager for another European-based owner describes the choice as “a moving situation” and one the company has put a great deal of effort into over a number of years.

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He hints that his company could take the scrubber-ready route — which involves fitting a slightly larger auxiliary engine and water intake system while creating space in the funnel for the unit. “We need to make a decision,” he said.

Scrubber kits

One large South Korean shipyard has confirmed it is adding a scrubber kit to one VLCC prior to delivery, explaining that it has also held discussions with owners at the contract signing stage about carrying this out on six other ships.

Checks by TradeWinds show that of just over 50 VLCCs contracted during 2017, around half were ordered with scrubbers. At least 12 were ordered without scrubber equipment.

Owners say they expect to see around 40 of these ships emerge from yards with scrubbers fitted, while newbuilding brokers comment that owners ordering VLCCs today would be "mad" not to fit the systems.

Power play

Some shipowners talk about mixed opinions and commercial approaches from energy majors on 2020 compliance and suggest these key charterers are likely to get tougher about their vessel requirements. "It's a power play," one says.

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While BP has recently fixed VLCCs on time charter that are compliant with the incoming legislation, however, the current weak market conditions and low rates mean there has been virtually no multi-year period deals concluded that would cover ships into 2020.

Many key technical staff at shipowning companies are also not comfortable with scrubbers as a solution.

They comment that discharging sulphur into the sea, which is effectively the operation mode for open-looped scrubbers — the preferred choice for many — could potentially be as harmful as sending it through the funnel as emissions.

Several have expressed the view that it is energy majors that should be made responsible for removing sulphur at the refining stage rather than making owners carry around what one described as "mini-refineries" on their ships in the form of scrubbers.

“The industry should be buying fuel where the sulphur has been removed,” one said. “Scrubbers are a less efficient way to do it.”