Two tanker operators have reported delays to their scrubber installations recently when announcing Q1 financial results.
Scorpio Tankers also reported on the delivery of new scrubber fitted vessels noting that in January 2020, the Company took delivery of two scrubber-fitted MR product tankers (STI Miracle and STI Maestro), and in March 2020 an additional scrubber-fitted MR product tanker (STI Mighty) each under eight-year bareboat leases. The leasehold interests in these vessels were acquired as part of the Company’s transaction with Trafigura Maritime Logistics that was announced in September 2019. The bareboat leases have similar terms and conditions as the original leased vessels in the Trafigura Transaction.
In April 2020, the Company reached an agreement with its counterparty to postpone the purchase and installation of scrubbers on 19 of its vessels. The installation of these scrubbers is now expected to begin not earlier than 2021.
The second owner, DHT Holdings, has postponed scrubber installations on five of the 18 vessels it announced last year. The remaining 13 already have scrubbers installed.
Neither owner put the decision to delay down to price differentials between HFO and VLSFO which have eroded to very low levels under the dual impact of COVID-19 lockdowns and over production of crude. Both owners have benefitted from the high demand for tankers to move crude to storage and to be used for storage purposes themselves.
The return on invest for scrubbers generally has lengthened and some analysts now put the payback time as four years rather than the much shorter periods measured in months at the beginning of the year when price differentials for bunkers were more than four times what they are at present.