Frontline says the economic case to install scrubbers is very compelling. File Image / Pixabay
John Fredriksen's Frontline is so impressed with the case for scrubbers it has not only placed an order for up to 36 of the systems, it is also buying a 20% stake in exhaust gas cleaning system firm Feen Marine Scrubbers Inc. (FMSI).
The tanker owner today said it had ordered exhaust gas cleaning systems for 14 vessels from FMSI, with options to order an additional 22 systems at fixed prices.
"The economic case to install scrubbers is very compelling, particularly for larger vessels. Scrubbers installed on existing vessels provide the same benefit as those delivered from the yard on newbuildings and our solution comes at a much cheaper cost," said Robert Hvide Macleod, CEO of Frontline Management.
Robert Hvide Macleod, CEO, Frontline Management.
this transaction allows Frontline to secure the capacity to source a large volume of scrubbers
"Additionally, this transaction allows Frontline to secure the capacity to source a large volume of scrubbers, which we believe will present a challenge to many owners as the deadline for sulphur emissions compliance approaches. Our relationship with Feen Marine has been structured in a manner that will be beneficial to both parties and would not have been possible absent our significant commercial scale and long-standing industry relationships."
FMSI Founder Bjørnar Feen noted Frontline joins Navig8 Group and Trafigura as customers of its technology.
With the "IMO 2020" global 0.50% sulfur cap on marine fuel coming into force from January 1, 2020, vessels equipped with scrubbers will be able to continue to burn the same HSFO bunkers they do today by achieving an equivalent method of compliance.
Despite seemingly "slam dunk" economics, until recently the uptake of scrubbers has fallen below industry expectation.
But DNV GL has noted in recent months interest in scrubbers has risen "dramatically" while Deutsche Bank and DVB Bank have been busy making headline with comments on the commercial benefits of the technology.