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Carnival Cruise Line confirmed on Wednesday that it has signed an agreement with Shell NA LNG, LLC (Shell) to be its supplier of liquefied natural gas (LNG) to power North America's first fully LNG-powered cruise ships.

The news follows this week's announcement by Shell that it has chartered an LNG bunker barge for the Southeast US market.

Under the framework agreement, Shell's new LNG bunker barge will supply Carnival with fuel for its two new LNG-powered ships - expected to launch in 2020 and 2022 and to be home-ported in North America.

The ocean-going barge, which will be used 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 the 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 vessels will be fully powered by LNG both while in port and at sea - an industry first. The 180,000-tonne ships will also be the largest in Carnival's fleet.

"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."

Tom Strang, senior vice president of maritime affairs for Carnival, added "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."

Background

The agreement builds on the partnership established between Carnival's AIDA Cruises brand and Shell in April 2016 to supply its AIDAprima ship with LNG to power the vessel while docked. The AIDAprima was the first cruise ship in the world to use LNG while in port.

The partnership was extended later that year when Carnival 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.

In total, Carnival Corporation has agreements in place with shipbuilders Meyer Werft and Meyer Turku to construct seven LNG-powered cruise ships across four of its cruise brands, with delivery dates slated between 2018 and 2022.

Agreement extension

As part of the framework agreement, Carnival and Shell also have the opportunity to partner together on the supply of marine LNG fuel to future LNG-powered vessels or additional itineraries.

The overarching agreement enables each Carnival brand to negotiate individual LNG supply contracts with Shell as new LNG-powered cruise ships begin to launch over the coming years.