Teekay LNG Partners L.P.
NYSE : TGP

Teekay LNG Partners L.P.

June 15, 2015 09:00 ET

Teekay LNG Signs Charter Contracts With BP for Up to Two LNG Carrier Newbuilds

HAMILTON, BERMUDA--(Marketwired - June 15, 2015) - Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE:TGP) today announced that it has entered into a 13-year time-charter contract with BP Shipping Limited (BP) for one Liquefied Natural Gas (LNG) carrier newbuilding, plus an option exercisable by BP by the end of the third quarter of 2015 for one additional LNG carrier under similar terms. The vessels, including the optional vessel if exercised, will primarily provide LNG transportation services for BP's LNG volumes from the Freeport LNG project located on Quintana Island near Freeport, Texas, which consists of three LNG trains with a total capacity of 13.2 metric tonnes per annum, scheduled for start-up in 2018.

In connection with signing the contracts with BP, the Partnership ordered two fuel-efficient 174,000 cubic meter LNG carrier newbuildings to be constructed by Hyundai Samho Heavy Industries Co., Ltd. of South Korea, scheduled for delivery in the first quarter of 2019, plus an option to order one additional vessel. The Partnership intends to initially finance the installment payments for the LNG carrier newbuildings with a portion of its existing liquidity and it expects to secure long-term debt financing for the vessels prior to their scheduled deliveries.

"We are excited to be supporting our second U.S. LNG export project, adding Freeport LNG to our existing charters committed to Cheniere Energy's Sabine Pass, and we look forward to the continued growth in U.S. LNG exports, which are expected to create substantial future demand for LNG transportation services," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "This accretive transaction both builds on our strong relationship with BP and our portfolio of fuel-efficient LNG carrier newbuildings on long-term contracts."

About Teekay LNG Partners L.P.

Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 50 LNG carriers (including one LNG regasification unit and 21 newbuildings), 30 LPG/Multigas carriers (including three in-chartered LPG carriers and eight newbuildings) and eight conventional tankers. The Partnership's interests in these vessels range from 20 to 100 percent. Teekay LNG Partners L.P. is a publicly-traded master limited partnership (MLP) formed by Teekay Corporation (NYSE:TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.

Teekay LNG Partners' common units trade on the New York Stock Exchange under the symbol "TGP".

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the timing of delivery of the Partnership's newbuilding LNG carriers and commencement of their respective time-charters; the financing for the newbuilding LNG carriers; the impact of the transaction on the Partnership's future cash flow accretion; expected fuel savings of these LNG carrier newbuildings; the impact of future U.S. LNG export projects on demand for LNG transportation services; the timing of the start-up of the Freeport LNG project and the expected total production capacity of the project; the number of newbuilding vessels required by BP; the timing and certainty of BP exercising its option for one additional LNG carrier on similar terms; and the timing and certainty of exercising the Partnership's existing option to order one additional LNG carrier newbuilding. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: shipyard construction delays; actual performance of the LNG carrier newbuildings; cash flow and costs relating to the transaction; the potential early termination of the charter contracts; changes in production of LNG, either generally or in particular regions that would impact the expected future growth in the global LNG transportation and regasification markets; changes in trading patterns or timing of the start-up of new LNG liquefaction projects significantly impacting global LNG shipping requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the ability of the Partnership to secure financing for the newbuilding LNG carriers; and other factors discussed in Teekay LNG Partners' filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2014. Teekay LNG expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Contact Information

  • For Teekay LNG Investor Relations enquiries contact:
    Ryan Hamilton
    Tel: + 1 (604) 609-6442
    Web site: www.teekaylng.com