Naturally fractured carbonate reservoirs with huge reserves are becoming more important to the global oil supply. It is of fundamental and practical importance to model naturally fractured reservoirs more accurately. So far, linear fracture relative permeability has been widely used for reservoir simulations. Extensive studies, however, have shown that fracture relative permeability varies with fracture characterizations. In this work, the Lattice Boltzmann Method (LBM) was applied to generate oil-water relative permeability of natural fractures under different fracture characterizations. In addition, the SAGD performance in naturally fractured carbonate reservoirs implemented with new relative permeability was evaluated. Results indicate that relative permeability in fractures presents a nonlinear relationship with saturation, rather than the commonly used X-shape curves. Comparing SAGD performance shows that it is necessary and more practical to utilize nonlinear relative permeability curves in natural fractures, especially for reservoirs with thin thickness, a medium level of matrix porosity and an initial oil saturation.