Teekay LNG Partners acquires ownership interests in four LNG newbuildings
Teekay LNG Partners L.P. today announced that it has acquired from BG Group (BG) ownership interests in four 174,000 cubic meter Tri-Fuel Diesel Electric (TFDE) liquefied natural gas (LNG) carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China. The vessels, which are scheduled to deliver between September 2017 and January 2019, will each operate under 20-year time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG, the company said in its press release.
Through this transaction, the Partnership has acquired a 30 percent ownership interest in the first two LNG carrier newbuildings with the balance of ownership held by CETS (an affiliate of China National Offshore Oil Corporation (CNOOC)) and China LNG Shipping (Holdings) Limited (CLNG), and a 20 percent ownership interest in the second two LNG carrier newbuildings with the balance of ownership held by CETS, CLNG and BW Group.
Teekay Corporation will provide construction supervision services for the newbuildings and technical management of the vessels upon their respective deliveries.
The Partnership will finance its pro rata equity interest in future shipyard installment payments using a portion of its available liquidity with the balance of the total cost of the vessels financed with a new approximately $800 million long-term debt facility secured by the vessels.
"We are pleased to announce this accretive acquisition, which adds liquefied gas to the Teekay Group's strategic relationship with BG Group while also establishing new relationships with China-based partners," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "The long-term time-charter contracts for the four newbuildings, which complement and expand Teekay LNG's existing fixed-rate contact portfolio, will provide further stability for the Partnership's cash flows. These vessels also further strengthen Teekay LNG's existing pipeline of growth projects scheduled to deliver between 2014 and 2018, which includes 10 LPG carrier newbuildings, through our Exmar LPG joint venture, and five MEGI LNG carrier newbuildings."
About Teekay LNG Partners L.P.
Teekay LNG Partners is the world's second largest independent owner and operator of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 38 LNG carriers (including one LNG regasification unit and nine newbuildings), 31 LPG/Multigas carriers (including five chartered-in LPG carriers and 10 newbuildings) and nine 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 as part of its strategy to expand its operations in the LNG and LPG shipping sectors.
