Teekay LNG newbuilds get U.S. gas export charters

JUNE 7, 2013 — When Teekay LNG Partners L.P. (NYSE:TGP) inked an agreement with Daewoo Shipbuilding & Marine Engineering (DSME) in December for the construction of two 173,400 cu.m LNG newbuildings (see earlier story) it said then that they would be “ideal for U.S. LNG exports.”

Today Teekay LNG reported that it has entered into two, five-year time-charter contracts to provide Cheniere Marketing, LLC with Liquefied Natural Gas (LNG) transportation, serving its  Sabine Pass LNG export facility.

The fixed-rate time-charter contracts will be serviced by the two DSME newbuilds, which are set for delivery from the shipyard in the first half of 2016. They will each by powered by two MAN B&W 5G70ME-GI dual-fuel, two-stroke, gas-injection engines, which are designed to be significantly more fuel-efficient and have lower emission levels than other engines currently being used in LNG shipping.

“We are excited to be supporting Cheniere, which will be exporting volumes from the Sabine Pass LNG export facility, the first LNG export facility project in the contiguous United States to receive approval for LNG exports,” commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. “This is a pioneering transaction which combines one of the first U.S. LNG export facilities with the first ME-GI-propelled LNG carriers to be chartered.”

Mr. Evensen continued, “With this transaction, the partnership is once again able to provide investors with visible distributable cash flow growth that we expect to build on due to the strong fundamentals of the LNG transportation markets we see developing commencing from 2016. The partnership is also bidding on several other LNG and floating regasification projects.”