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Capital Product Partners eyes scrubber retrofits on larger vessels

02 Nov 2018

International shipping partnership Capital Product Partners is planning to install EGCS, also known as scrubbers, on up to 14 of its larger vessels, comprising ten containerships, three crude tankers and one bulk carrier, it says.

The final decision for certain of these vessels is expected to be reached within the coming months and the installation of the scrubbers is expected to be completed throughout 2019 and 2020.

It has entered into a series of agreements with Hyundai Merchant Marine (HMM) to increase the daily charter rate by $4,900 for five 5,000 TEU box vessels in connection with the scrubber retrofit arrangement; the increase will be effective from January 1, 2020.

The vessels, are namely Hyundai Prestige, Hyundai Premium, Hyundai Paramount, Hyundai Privilege and Hyundai Platinum.

The HMM Vessels are currently earning $23,480 gross per day following a restructuring agreement with HMM dated July 15, 2016. Under the restructuring agreement, the charter rate is set to be restored to the original daily gross rate of $29,350 from January 1, 2020 and will increase further to $34,250 once the scrubbers are installed in accordance with the scrubber agreements.

“Furthermore, we believe that our decision to equip part of our fleet with scrubbers is an important and necessary decision in view of the IMO 2020 regulation, whose effects on our underlying markets remain widely debated in the industry,” says Jerry Kalogiratos, CEO of the Partnership's General Partner.

“We believe that this move can help increase the appeal of the partnership's larger vessels to period charterers post January 2020, but also potentially allow us to capture meaningful premiums, such as that negotiated with one of our charterers for five of our vessels.”

Published: 2 November, 2018

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