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NCL scrubber installation delay spells higher fuel costs

NCL scrubber installation delay spells higher fuel costs

Norwegian Cruise Line's fuel costs for the next three years will be higher than previously forecast because the company's scrubber installation project has been delayed.

The six- to 12-month delay in scrubber installation springs from the decision to switch to a closed-loop system, ensuring the scrubbers can be used in ports worldwide, cfo Wendy Beck told analysts this week.

That means an incremental $10m impact in the second half of 2015, $15m in 2016 and tapering off to $10m in 2017 as scrubbers become operational over the course of the installation period.

The installation delay put Norwegian outside of its original operational timeline submitted to the Environmental Protection Agency in order to receive waivers to burn lower grade fuel inside the North American Emission Control Area during the installation period.

This caused EPA to rescind Norwegian's waivers and, as a result, the company's fuel consumption mix has changed. It must use more costly low sulfur fuel within ECAs in the interim.

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