Senior Vice President Maritime Affairs, Carnival Corporation and plc.
There is no shortage of big news announcements coming out of Carnival Corporation. From LNG-fueled ships to a supply agreement with Shell and all the way to an aggressive shipbuilding program, Carnival finds itself out in front of the pack in many respects. Earlier this month, we caught up with Strang and asked him to bring some perspective to his firm’s many business decisions.
Some stakeholders expect LNG use to become mainstream in cruise ships in the future due to stricter rules on harmful emissions. You are an earlier adopter. What went into that decision?
LNG is an
Portugal’s Galp Energy is expanding its marine fuel offering by supplying low-emission liquefied natural gas for ships. Tell us about this development.
We have worked with GALP to utilize the same system for fueling the AIDAprima as we have been using with Shell since 2016 in Hamburg, Southampton, Le Havre, Zeebrugge and Rotterdam on the same ship. In addition, we are carrying out fuel deliveries in Barcelona, Civitavecchia
Carnival Corporation and Carnival Cruise Line signed an agreement with Shell to fuel the first fully LNG-powered cruise ships in North America. The two Carnival Cruise Line ships will be fueled
The first Carnival Cruise Line ship will enter service late 2020 and the LBB will be available on the ship's arrival. Pioneering a new era in the use of low-carbon fuels, these new ships (with the next generation “green cruising” design) will be the first in the cruise industry that can use LNG to generate 100 percent of their power both in port and on the open sea – an innovation that will reduce exhaust emissions to help protect the environment and support Carnival Corporation’s aggressive sustainability goals. These seven ships, with delivery dates between 2018 and 2022, will be built by German and Finnish shipbuilders Meyer Werft and Meyer Turku.
The Bunker Barge is a first of its kind in the U.S. and will allow the ships to refuel with LNG at ports along the U.S. East Coast. This kind of flexibility will allow you to move vessels to suit marketing and demand trends, yes?
Correct. The use of a mobile bunker vessel allows more flexibility in delivery location. As the first of its kind to be based in the United States, the ocean-going LNG bunker barge will supply LNG to marine customers along the southern East Coast of the U.S. and support growing cruise line demand for LNG marine fuel. With its pioneering design and delivery capabilities, the LNG bunker barge will be highly efficient and maneuverable and feature an innovative transfer system enabling it to load LNG from big or small terminals and bunker a variety of customers.
Carnival Corporation has agreements in place to build seven LNG-powered cruise ships across four of its 10 global cruise brands. Is this plan [LNG] Carnival’s end game on environmental compliance for the 2020 deadline and beyond?
The use of LNG meets and exceeds all current and proposed emissions regulations through 2025, and is an important mainstay of our commitment to sustainable cruise operations going forward. For existing ships and where LNG is not available, we have a program to meet the new emissions rules using EGCS which clean the exhaust from our engines or to use cleaner fuels where this is not possible. Because of the new regulations recently adopted by the International Maritime Organization, there is a greater push in the industry today to build ships that can utilize cleaner burning fuel, such as LNG-powered ships. The European Union is investing heavily in infrastructure that allows for the use of cleaner fuels, and so in the industry today there is a greater incentive than before to develop LNG-powered ships. There is an increasing regulatory demand for clean emissions, which requires cleaner fuels, and LNG is very much in that bracket. That, together with the new safety regulations for ships using gases as fuels, and the developing infrastructure for LNG, was a tipping point, and we decided it was the right time to begin the transition to LNG by building the world’s first LNG-powered cruise ships. Also, because we are currently designing a new series of vessels, it is a good time to make a choice to transition to LNG-powered ships – in effect providing a degree of future proofing.
Christine Duffy, Carnival Cruise Line President, recently said, “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.” LNG is just one part of that journey. Tell us about other initiatives.
The effort is one of many that our company has in place to meet our focus on sustainability and the environment. We have been firmly committed since our inception 44 years ago to operating responsibly, as our company’s very existence is tied to protecting the oceans, seas
Cruise shipping could well be the driver for LNG infrastructure that global shipping has been hoping for. Would you agree?
Yes. We are proud to be
Carnival Corporation has begun construction on the world’s first fully LNG-powered cruise ship. What will be the maximum endurance (range/time at sea) for such a vessel?
For a week’s itinerary that might use 1,000 MT of
Will these vessels be able to burn low
They can use MGO as well. On our LNG-fuelled ships, the LNG will be used to power dual fuel, medium speed, four-stroke engines to run the ship in port and at sea. We have chosen dual-fuel engines to ensure compliance with safe return to port requirements and so that in all cases we have a backup supply of traditional fuel. These ships will be the first cruise ships that use LNG as fuel during all aspects of
What is the premium (cost differential) on building such LNG-powered vessels? In the OSV markets, the engines alone come at a 20% up cost. Operators there hope to recoup those costs by taking advantage of lower cost LNG. What’s Carnival’s business plan in that regard?
The outfit for the full LNG system is a small part of the total cost of a large cruise ship. We expect LNG to be competitive with other compliant fuels and there to be other advantages in areas such as maintenance, cleanliness, noise, etc. There was
For other early adopters of LNG, the price of the LNG was not a variable in their decision to go green. But, going green must also result in making ‘green’ in order for it to work. Was cost a variable in your decision to go LNG?
One of the reasons for going to LNG was that the availability of LNG as a marine fuel was improving and
What brand of engines will you use to power these LNG vessels? Why did you choose that OEM? What advantages did they bring?
We chose Caterpillar MaK together with the building yard. They offered the most competitive package and we have experience with their engines on the AIDAprima and AIDAperla.
Together, the corporation’s cruise lines operate 103 ships with 231,000 lower berths visiting over 700 ports around the world, with 17 new ships scheduled to be delivered between 2018 and 2022. How many of the 17 new ships will feature LNG or LNG ready engine arrangements?
By 2022, Carnival Corporation will take delivery of seven new cruise ships that will be powered by LNG in port and at sea for our Carnival Cruise Line, P&O Cruises UK, AIDA Cruises, Costa Cruises brands. We consider this “future proofing” our new ships, building today for the challenges of tomorrow – be they regulatory or economic in nature. This also offers us a significant hedge against fluctuation in fuel costs over time, one of the biggest variables in the overall economic model.
Are there any plans to send any of the new LNG ships to Port Canaveral? What
We have not announced specific deployment plans for our North America LNG ships yet, but 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 our ships to refuel with LNG at ports along the southern U.S. East Coast.
Port Canaveral bills itself as the world’s number two cruise port, and Carnival brands call there frequently. What’s the best part about partnering with that port, how has it gone for you thus far and would you contemplate increasing port calls there in the near future?
Carnival Cruise Line has been sailing from Port Canaveral since 1990 — the longest of any cruise line. Carnival Cruise Line’s three homeported ships will sail approximately 600,000 guests from Port Canaveral this year. In 2017/2018, the range of Carnival choices includes 18
(As published in the January/February 2018 edition of Maritime Logistics Professional)