Dorian LPG Invests in Scrubbers, Continues to Evaluate BW LPG’s Offer
Dorian LPG has hired scrubber manufacturer K Marine for the delivery of seven hybrid exhaust gas cleaning systems (scrubbers).
The investment has been revealed by John Lycouris, Chief Executive Officer, Dorian LPG (USA), in the company’s conference call on the second quarter results.
The scrubbers will be installed during 2019, ahead of the implementation of the 2020 sulphur cap.
Since its fleet of ECO vessels was ordered in 2013, the ships had incorporated features to accommodate future scrubber retrofits and/or engine updates for LPG as fuel.
According to Lycouris, as such, the company expects the fleet to benefit from lower retrofit costs and faster retrofit installation turnaround.
“The company expects the project costs to reach approximately USD 20 million for the supply and installation of these scrubber systems,” Lycouris said, adding that the company’s project on implementing LPG as fuel is closer to realization.
Namely, the company plans to upgrade its vessels with MAN’s dual fuel ME-LGIP engines. The first commercial utilization of the engines on board Dorian’s ships is set for 2020.
To fast track the project the company has engaged with M&N Energy Solutions from Copenhagen, the manufacturers of all main engines of Dorian LPG’s ECO fleet vessels.
Separately, John Hadjipateras, Chairman and Chief Executive Officer of Dorian LPG, said that the company continues to evaluate BW LPG’s proposal and all others opportunities to create value.
However, Hadjipateras refused to take questions on the process until further notice.
To remind, Singapore-based BW LPG increased its all-stock proposal to combine with gas carrier owner and operator Dorian LPG in July.
Under the proposal Dorian shareholders would receive 2.12 BW LPG shares for each Dorian share.
The revised proposal, represents a value of USD 8.67 per share of Dorian common stock based on BW LPG’s closing share price of NOK 32.86 on July 6, 2018.
The upping of the offer came after Dorian LPG rejected the takeover bid from BW LPG, unveiled on May 29.
Dorian LPG reported a net loss of USD 20.6 million for the three months ended June 30, 2018, compared to a net loss of USD 6.7 million, for the same quarter last year.
“Following a series of transactions finalized during our first fiscal quarter, we have completed our refinancing plan with no debt refinancing requirements until 2022 and limited interest rate exposure,” Hadjipateras said.
“With the recent increase in freight rates, our modern fleet of ECO VLGCs should continue to earn a demonstrable premium, which we believe may become more pronounced following the implementation of new regulations to reduce sulphur emissions. With a de-risked balance sheet and a modern, fuel-efficient fleet, we feel well-positioned for any rate environment and the new world of International Maritime Organization regulations beginning in 2020.”
World Maritime News Staff