Carnival Cruise Line Signs Agreement With Shell To Fuel North America's First LNG-Powered Cruise Ships

Carnival Cruise Line, a unit of Carnival Corporation, has announced it has signed an agreement with Shell NA LNG, LLC to be its supplier of marine liquefied natural gas (LNG) to power North America's first fully LNG-powered cruise ships. Under this framework agreement, Shell will supply Carnival Cruise Line with fuel for its two new LNG-powered ships expected to launch in 2020 and 2022 and to be homeported in North America. As part of the agreement, the two ships, built with a next-generation "green cruising" ship design, will be fueled through Shell's LNG Bunker Barge (LBB)—a project announced earlier this week as part of Shell's strategic plan to develop a global LNG bunkering network. The ocean-going LBB, which is designed to support growing cruise line demand for LNG as a marine fuel, will be the first of its kind in the U.S. and will allow these ships to refuel with LNG at ports along the southern U.S. East Coast.

"This agreement is a significant stepping stone in our relationship with Carnival Corporation building upon our previous LNG marine fuel supply agreements in Europe," said Tahir Faruqui, president, Shell NA LNG, LLC. "It also marks a milestone as we continue to establish the marine LNG fuel market in the U.S. as a credible part of the global marine fuel mix."

The two new Carnival Cruise Line vessels will be fully powered by LNG both while in port and at sea—an industry first and an environmental breakthrough that will improve air quality with cleaner emissions and produce the most efficient ships in company history. The 180,000-ton ships will be the largest ships in Carnival Cruise Line's fleet with an approximate passenger capacity of 5,200 based on double occupancy.

"Carnival Cruise Line is strongly committed to leading the way in the implementation of technology innovations to help protect the environment and support our aggressive sustainability goals," said Christine Duffy, president of Carnival Cruise Line. "Our two new cruise ships entering service in 2020 and 2022 will not only be the largest and most technologically advanced in our fleet but will break extraordinary new ground as the first LNG-powered cruise ships in North America."

Added Tom Strang, senior vice president of maritime affairs for Carnival Corporation, "We are proud to be on the forefront of advancing LNG as a fuel source for the cruise industry. One of the keys to establishing LNG as a standard for powering cruise ships is building out an extensive, safe and reliable infrastructure across the globe for this clean burning fossil fuel. We are looking forward to working closely with Shell as they help to bring LNG to North America in what we hope will be the first step in building a strong foundation for the future of LNG fuel supply for cruise ships in the region."

This agreement builds on the partnership established between Carnival Corporation's AIDA Cruises brand and Shell in April of 2016 to supply its AIDAprima ship with LNG to power the vessel while docked. AIDAprima is the first cruise ship in the world to use LNG while in port, leading to a major reduction in emissions.

The partnership was extended in fall 2016 when Carnival Corporation signed an agreement with Shell to supply LNG for the first of its next-generation LNG ships from its European AIDA Cruises and Costa Cruises brands. These two ships will be the world's first fully LNG-powered cruise ships when they enter service in 2018 and 2019. Additionally, the agreement furthers the realization of Carnival Corporation's LNG efforts that began in 2015 with AIDAsol becoming the first cruise ship in the world to be supplied with power by an LNG hybrid barge, which also saw major benefits while in port.

In total, Carnival Corporation has agreements in place with leading German and Finnish shipbuilders Meyer Werft and Meyer Turku to build seven LNG-powered cruise ships across four of its 10 global cruise brands with delivery dates between 2018 and 2022—two for AIDA Cruises with expected delivery dates in 2018 and 2021, two for Costa Cruises with expected delivery dates in 2019 and 2021, one for P&O Cruises UK with an expected delivery date in 2020, and two for Carnival Cruise Line with expected delivery dates in 2020 and 2022.

As part of the framework agreement, Carnival Corporation and Shell have the opportunity to partner together on supplying marine LNG fuel to future LNG-powered vessels or additional itineraries. The overarching agreement enables each Carnival Corporation brand to negotiate individual LNG supply contracts with Shell as new LNG-powered cruise ships begin to launch in coming years.

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