HAMILTON, BERMUDA — (Marketwired) — 08/05/13 — Teekay LNG Partners L.P. (Teekay LNG or
the Partnership) (NYSE: TGP) today announced that it has agreed to acquire a
155,900 cubic meter (cbm) liquefied natural gas (LNG) carrier newbuilding
from Awilco LNG ASA (Awilco) (ALNG: NO), a Norwegian-based owner and
operator of LNG carriers. The vessel, which is currently under construction
by Daewoo Shipbuilding & Marine Engineering Co., Ltd., (DSME) of South
Korea, is expected to deliver in the third quarter of 2013, and subsequent
to delivery from DSME to Awilco, Teekay LNG will purchase the vessel and
bareboat charter the vessel back to Awilco at a fixed rate for a firm
period of five years, plus a one-year extension option. Teekay LNG will
purchase the vessel for a price of $205 million less a $50 million upfront
prepayment of charter hire by Awilco which is in addition to the daily
bareboat charter rate. Awilco has fixed-price purchase obligations at the
end of both the firm charter period and option period.
As part of the transaction, Awilco has an option to sell to and bareboat
charter back from Teekay LNG a second 155,900 cbm LNG carrier newbuilding
currently under construction by DSME, under similar terms. The second LNG
carrier newbuilding is expected to deliver in the fourth quarter of 2013.
The Partnership intends to finance the transaction with a portion of its
existing liquidity and expects to secure long-term debt financing prior to
delivery.
“We are pleased to announce this mutually beneficial acquisition-
leaseback arrangement with Awilco which will provide Teekay LNG with
immediate accretive cash flow,” commented Peter Evensen, Chief
Executive Officer of Teekay GP LLC. “Together with our four LNG
carrier newbuildings delivering in 2016 and the ten LPG newbuildings in our
joint venture with Exmar, delivering between 2014 and 2017, this
transaction with Awilco provides a near-term compliment to the
Partnership–s strong portfolio of long-term visible growth projects.”
The transaction, which is expected to close during the third quarter of
2013, has been approved by Board of Directors of both Teekay LNG and
Awilco, and remains subject to customary closing conditions, including
satisfactory documentation.
About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is the world–s third largest independent owner and
operator of LNG vessels, providing LNG, liquefied petroleum gas (LPG) and
crude oil marine transportation services primarily under long-term, fixed-
rate charter contracts with major energy and utility companies through its
interests in 31 LNG carriers (including one LNG regasification unit and
four newbuildings), 31 LPG/Multigas carriers (including five chartered-in
LPG carriers and ten newbuildings) and 11 conventional tankers. The
Partnership–s interests in these vessels ranges from 33 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 and certainty of
completion of acquisition of a newbuilding LNG carrier from Awilco,
including the completion of customary closing conditions; the timing and
certainty of Teekay LNG acquiring a second LNG carrier newbuilding under
similar terms to the first vessel; the timing and certainty of Teekay LNG
securing long-term financing for the acquired vessel, or vessels; and the
timing and effect of the transaction with Awilco, as well as other
committed LNG and LPG newbuildings, will have on the Partnership–s cash
flows. 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; failure by the
Partnership to secure long-term financing; the potential early termination
of the bareboat charter contracts with Awilco; failure to secure long-term
charters for the acquired vessels; failure to satisfy closing conditions of
the transaction; 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, and spot LNG shipping
rates; changes in trading patterns or timing of the start-up of new LNG
liquefaction projects significantly impacting overall LNG shipping
requirements; changes in applicable industry laws and regulations and the
timing of implementation of new laws and regulations; 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,
2012. The Partnership 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.
Contacts:
For Teekay LNG
Kent Alekson
Investor Relations enquiries
1 (604) 609-6442