The company will attempt to get out of scrubber installation contracts where possible, CEO Niels Stolt-Nielsen said last week. Image Credit: Stolt-Nielsen
Shipping company Stolt-Nielsen plans to cancel scrubber installations where possible, it said last week, as the company cuts capital expenditure in the face of the COVID-19 pandemic's effect on demand for shipping.
The company has identified about $30 million of capital expenditure that can be cut in its tankers division, where scrubber installations have been the main capital cost, CEO Niels Stolt-Nielsen said in a call with analysts last week.
"We will cancel as many scrubbers as possible, primarily to preserve cash," Stolt-Nielsen said.
Delays in scrubber installations may be a means of cancelling a retrofit that has already been committed to, he said.
"Where the contractor or the supplier is late, and we can get out of the contract, we will," Stolt-Nielsen said.
The company paid an average of $506/mt for its fuel in the first quarter, the company said, up from $384/mt in the fourth quarter of 2019.
Stolt-Nielsen has hedges in place covering 36,000 mt of very low sulfur fuel oil purchases from April 2020 to December 2020, and these have a negative value of $4.2 million as of April 16. the company said.