Euronav Buying 4th Scrubber-Fitted VLCC Newbuild

Belgian tanker company Euronav has entered into an agreement for the acquisition of one VLCC newbuilding contract through a resale. 

Currently completing construction at the DSME shipyard in South Korea the eco-VLCC is being acquired for USD 93 million and will be fitted with exhaust gas scrubber technology and ballast water treatment system.

The vessel is due for delivery early in the first quarter of 2021 and is an identical sister ship of the 3 VLCCs acquired last month.

The trio, due for delivery in the fourth quarter of 2020 and the first quarter of 2021, will also be fitted with scrubbers and ballast water treatment systems.

The latest acquisition pushes the company’s investment in fleet modernization to around USD 374 million.

 “Management and the board continue to believe that the fundamentals of the large tanker market remain constructive despite substantial headwinds surrounding economic activity linked to the Corona Virus. We believe and hope these will be temporary albeit likely to impact tanker markets until the end of the summer 2020,”  Hugo de Stoop, CEO said.

The company said the transaction was consistent with its core objectives with the vessel being an ex-yard resale, thus not adding to the existing vessel supply.

Euronav plans to finance the acquisition from existing borrowing facilities and debt capacity.

These are the first ships to join Euronav’s fleet that will be fitted with scrubber technology. To remind, under Euronav’s former CEO Paddy Rodgers , there was strong opposition to scrubber technology amid environmental concerns.

However, in its annual report for 2019, the company revealed that was considering the potential to install scrubber technology.

There has been a great incentive behind investing in scrubbers for owners as scrubber fitted ships have been earning premiums since the entrance into force of the IMO 2020 last January when compared to ships burning the more expensive compliant fuels.