Shell to sell LNG to Carnival in Europe in 2019

OREANDA-NEWS. October 04, 2016. Shell will start selling LNG to Carnival cruise line in 2019 for two vessels that will mostly operate in Europe.

Miami-based Carnival reached a preliminary agreement with Shell for LNG sales to fuel what would be the world's first fully LNG-powered cruise ships. The two vessels are scheduled to be launched in 2019 to serve Carnival's AIDA Cruises and Costa Cruises brands, which primarily visit popular ports in northwestern Europe and the Mediterranean.

Shell said today it will supply one of the cruise ships from an LNG bunkering vessel that will load in Rotterdam, the Netherlands. The second ship is expected to refuel at a port in the western Mediterranean. Shell and Carnival declined to provide additional details.

Carnival has ordered seven ships that will be able to operate with either LNG or oil-based bunker fuels, but Carnival intends to fully operate them at dock and sea with LNG to reduce emissions. With low oil prices, it is unclear if using LNG will be more economical than oil-based bunker fuels, but some ship operators are building LNG-powered vessels to comply with new environmental regulations to reduce sulfur emissions.

The seven ships will serve four of Carnival's its 10 global cruise lines.

Two additional LNG-powered ships for the AIDA and Costa lines are scheduled to start service in 2021.

Two LNG-powered ships are scheduled to be delivered in 2020 and 2022 for the Carnival Cruise Line that mostly operates in North America and the Caribbean, and the seventh ship is slated to be delivered in 2020 for P&O Cruises UK.

"We are committed to reducing our air emissions and improving air quality by evaluating new and established solutions such as LNG — an especially promising option because of its environmental and other benefits," said Tom Strang, senior vice president of maritime affairs for Carnival.

The agreement allows Shell and Carnival to negotiate individual supply contracts for the other five LNG-powered ships scheduled to be launched in coming years.

Shell in April started supplying LNG to Carnival's AIDAprima ship while it is docked, significantly reducing its emissions. The LNG is being delivered by truck.