1. Why LNG? Fuelling Operations Feb 2016 Tom Strang SVP Maritime Affairs Carnival Corp & plc

2. 1 Why LNG? A cruise ship has a long life expectancy 30 + yearsFuture proofing An ever increasing regulatory environment IMO, EUExternal stakeholder pressureNGOs A new platform introduces opportunities Introduce new ideas and concepts Consolidate operational experiences Efficiency, arrangements, fuel, manning,.... Address new rules and regulations Environmental commitment

3. 2 Ever increasing stakeholder engagement

4. 3 What will be the future for environmental regulations? Sulphur What happens in 2020? 0.1%, 0.5% - Are these the final limits? New SECAs? HK, China, Aus & NZ....... NOX New NECAs? Reduced limits in future Tier xx? What can we learn from other sectors? CO2 Today EEDI Tomorrow MRV What next? PM What do we expect? Is SOX the correct proxy? ???? Black Carbon?

5. 4 Fuel options? Is today – historic low fuel prices - the new norm? Use conventional residual fuels –Significant cost advantage vs distillate –Requires exhaust gas cleaning system (EGCS) to reduce SOx CAPEX & Lifecycle costs, (equipment replacement, materials etc) Open or closed loop Waste material disposal – hazardous waste –Requires to install NOx reduction to meet Tier III How to combine selective catalytic reduction (SCR) with EGCS Operation costs and materials handling –Fuel availability post 2020/2025 –Future environmental requirements –Option for existing ships Carnival currently have some 90 EGCS on 38 ships

6. 5 Fuel options? Use low sulphur residual fuels –Cost –Still requires NOx reduction equipment (SCR) –Availability –Stability and fuel mixing issues Use distillate –Cost –Availbility post 2020 Use inherently low sulphur alternative fuels –Methanol Availability – only one early adopter –Compressed Natural Gas (CNG) Power density Availability Future environmental requirements

7. 6 Fuel options? LNG –Environmental advantages Reduce SOx 99-100% Reduce NOx 75% Reduce CO2 25% Reduce PM 85% –Rules now clear with IGF Code –Cost –National support frameworks in place –Availability

8. 7 LNG Availability and Infrastructure Gas available but not always where we need it or in the correct form Ports very active but do we want a concession model? –EU funding available Given the size of our ships and the capacity that we will need, ship to ship bunkering seems to be the only viable option 70 LNG fueled ships in operation today and 80 confirmed newbuilds on order –Excludes LNG carriers 7 new LNG bunker vessels (capacity from 1,500 - 6,500m3) on order for delivery in the next two years LNG bunker infrastructure development –North Europe; Norway, Sweden, developing around the Baltic, and N Sea coast –West Europe; Rotterdam and Zeebrugge already underway –West Med; Gibraltar, Barcelona, Civitavecchia and Savona, plans being developed –Canaries; Tenerife actively pursuing bunker suppliers –Far East; Singapore, Korea, Taiwan and China already moving –North America; NW, Vancouver, N.Florida, Gulf Coast very active –Caribbean; significant interest being shown

9. 8 Business case A year ago most market experts were predicting that by the end of 2015 oil would have stabilised somewhere between $65 and $85 / barrel Today it is about $35 barrel, and LNG in EU is trading at the same price as HFO Consequently a business case looked very different from what it might do today But delivered LNG is still expected to have a discount to MGO Figures supplied by DNV LNG prices do not include delivery

10. 9 A tipping point reached ConventionalLNG Future proofingCost Infrastructure & Availability Regulatory support IGF Code CostEGCS and SCR

11. 10 Carnival – new orders

12. 11 Thank you