DHT Co-CEOs: We Are Neither For nor Against Scrubbers

DHT Holdings plans to fit exhaust gas cleaning systems on two thirds of its very large crude carriers to comply with the impending 2020 sulphur cap.

The retrofit program covers 16 ships built between 2004 and 2012, which stand to gain the greatest economic benefits. Additionally, the two newbuildings delivered from Hyundai Heavy Industries this year had scrubbers installed, taking the total to 18 out of 27 ships with scrubbers, the letter disclosed.

“As we have stated, we are neither for nor against scrubbers, but deem it our responsibility to position DHT as best as we can ahead of the implementation of the new regulations. We believe scrubbers to be an economical way to comply with the new regulations and want with this communication to share some important details in our scrubber program,” the company’s Co-CEOs Trygve P. Munthe and Svein Moxnes Harfjeld, said in a letter to shareholders.

According to Harfjeld, once fitted with scrubbers, the ships are expected create a super-profit through their ability to consume regular heavy fuel oil versus compliant fuels that will be much more expensive.

Fifteen of the scrubbers that will be installed will be able to clean the sulphur content in the exhaust gas down to 0.1%, enabling these ships to operate with scrubbers within emission control areas (ECA) and ports, where permitted.

“Secondly, we configured our fuel tank lay-out allowing us to carry various grades of fuels facilitating the flexibility to consume compliant fuels with 0.5% or less sulphur content when in emission control areas and in ports that does not permit scrubbers. We have elected this configuration in anticipation of countries implementing stricter rules related to use of scrubbers when ships operate in their respective near seas and ports,” the letter further reads.

In September, DHT obtained funds needed for its scrubber retrofit project encompassing twelve of the company’s VLCCs. DHT contracted Swedish company Alfa Laval for the supply of scrubbers and secured shipyard capacity to install all systems within 2019, making them ready for IMO’s 2020 sulphur cap.

A month later, DHT entered into agreement to install scrubbers on four additional VLCCs, which will also be installed on ships during 2019.

Also in October, DHT took delivery of the 319,000 dwt DHT Mustang, the second of its two VLCC newbuildings from HHI. The first newbuilding, DHT Bronco, was handed over to DHT in July.

“We like our current position. With the last newbuilding delivered in October in time for the current market upturn, we now have all ships in the water earning money. Following our financing efforts this year, we have no significant debt maturities until 3Q 2021. We are focused and we work hard to create value to your shareholding by pursuing what we expect to be a rewarding business plan,” the letter reads.