Teekay LNG Partners Secures Interest in 4 LNG Newbuildings

Teekay LNG Partners L.P. (NYSE:TGP) has acquired ownership interests in four 174,000 cubic meter Tri-Fuel Diesel Electric liquefied natural gas (LNG) carrier newbuildings from BG Group (LSE:BG). The vesels will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China and are scheduled to deliver between September 2017 and January 2019. Each newbuilding will operate under a 20-year time-charter contract, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG.

As quoted in the 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 CEO, Peter Evensen, said:

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. 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.

Click here to read the Teekay LNG Partners L.P. (NYSE:TGP) press release