Port Canaveral‘s deal with Carnival Cruise Line will be a moneymaker for the port and for the Space Coast tourism industry.
Carnival announced this past week that it will bring its largest ship to Port Canaveral in 2020. Construction on that still-unnamed ship will begin in November at a shipyard in Finland.
The ship will have a maximum capacity of 6,500.
It will be based at Port Canaveral’s new Cruise Terminal 3 that will be built on the south side of the port, west of Jetty Park.
Here are seven things to know about the deal.
What is Carnival is doing to help the port financially?
Miami-based Carnival has agreed to contribute $50 million toward construction of the cruise terminal.
Cruise Terminal 3 will be Port Canaveral’s largest construction project ever, with an estimated cost of $150 million, including the terminal, parking garage, berth improvements and roadways. The terminal is scheduled to open in mid-2020.
Port Canaveral Chief Executive Officer John Murray said Carnival will pay the $50 million to Port Canaveral through a special fee, called a “capital cost recovery charge.” The port will charge Carnival for every passenger getting on or off a ship at Port Canaveral until the $50 million total is reached.
Murray said the fee is likely to be about $2.74 per passenger boarding or leaving a Carnival ship at the port. The port will assess Carnival the fee, but it is not likely to actually show up on passenger ticket charges.
What else is in the deal with Carnival?
The deal between Port Canaveral and Carnival has a term of 25 years, with four additional five-year options for extension. So it could last for up to 45 years. The contract would begin on Sept. 1, assuming that Canaveral Port Authority commissioners approve the deal at their meeting on Wednesday.
“This is a very long contract, further symbolizing Carnival’s commitment to Port Canaveral,” Murray said.
The deal will replace an existing six-year agreement between Port Canaveral and Carnival that had been scheduled to expire on March 31, 2019.
As part of the deal, Carnival will guarantee that it will provide Port Canaveral a minimum of $14.5 million a year for its “passenger use charge,” up from the current $7 million a year.
Those fees bundle the charges the port charges cruise lines for dockage, line-handling, harbormaster services and water, among other things.
The port currently charges Carnival $11.54 per passenger, and that charge would increase $12.54 per passenger under the new contract.
The passenger use charge and the guarantee both will increase by 2.5 percent a year in each of the first five years of the contract, then would increase by 3 percent a year in each of the next 20 years of the contract.
What are some details about the ship?
The 180,000-ton ship will have a capacity of 5,286 passengers, based on double-occupancy of its cabins, and a maximum capacity of 6,500. It is likely to have an onboard crew of about 2,000.
Construction of the ship is scheduled to begin in November, with the official steel-cutting ceremony at the Meyer-Werft shipyard in Turku, Finland.
The ship will be the first of what Carnival is informally calling its “XL-class” ships, meaning extra-large. The ship class eventually likely will have a name that matches this ship’s name.
It will be the first North American-based cruise ship to be powered by liquefied natural gas.
How will the ship be fueled with liquefied natural gas?
Murray said, at least initially, a fuel barge will come to Port Canaveral from a facility in Georgia to fuel the ship with LNG.
Disney Cruise Line also will be adding three LNG-powered ships to its four-ship fleet in 2021, 2022 and 2023. At least one of those ships is likely to be based at Port Canaveral, which is the closest port to Walt Disney World.
So, eventually, Murray said, a more permanent LNG fueling facility might be developed at Port Canaveral by a private company.
Some members of the community have expressed concern about having LNG fueling done at Port Canaveral.
In response, Murray issued the following statement to FLORIDA TODAY: “The new Carnival ship will be fueled through an LNG bunker barge. Ship-to-ship ‘bunkering’ is a widely used, globally accepted fuel transfer process regulated by the U.S. Coast Guard.”
Murray said port officials “have been working in collaboration with Canaveral Fire Rescue, the Coast Guard, our cruise partners, and federal and state regulatory agencies to ensure LNG fuel suppliers and receivers properly develop procedures that comply with all federal, state and local regulations, and build capabilities as needed to safeguard the port and promote this industry initiative.”
How big a presence does Carnival currently have at Port Canaveral?
Carnival currently has three year-round ships based in Port Canaveral carrying upwards of 650,000 passengers a year. They are the Carnival Liberty, with a double-occupancy capacity of 2,974; the Magic, with a double-occupancy capacity of 3,690; and the Sunshine, with a double-occupancy capacity of 3,002.
In late-September, Carnival Cruise Line will reposition the newer Carnival Breeze to home-port at Port Canaveral, replacing the Magic. The Breeze has a double-occupancy capacity of 3,690.
When the new terminal will be built, what will happen to the cruise terminals Carnival use, Cruise Terminals 5 and 6?
Murray said, with multiple ships based at Port Canaveral, Carnival will continue to use Cruise Terminal 6.
Cruise Terminal 5 will be used by other cruise lines, either ones with ships now based at Port Canaveral or ones that Port Canaveral is trying to attract to Port Canaveral.
Disney, Norwegian and Royal Caribbean all currently have ships based at Port Canaveral.
Will the new Carnival ship mean that Port Canaveral becomes the world’s No. 1 port?
Port Canaveral currently is the world’s second-busiest cruse port, behind the Port of Miami, based on passenger counts.
Murray said, while the new ship will increase Port Canaveral’s passenger totals, the Port of Miami also is expanding with newer and bigger ships.
Murray said he’s fine “with being No. 2.”
Berman is government editor at FLORIDA TODAY.