Teekay LNG Partners Orders Two LNG Newbuildings; Intends to Charter
on Long-Term Contracts
HAMILTON, BERMUDA -- (Marketwire) -- 12/13/12 -- Teekay LNG Partners
L.P. (Teekay LNG or the Partnership) (NYSE:TGP) today announced that
it has entered into an agreement with Daewoo Shipbuilding & Marine
Engineering CO., LTD., (DSME) of South Korea for the construction of
two 173,400 cubic meter Liquefied Natural Gas (LNG) carrier
newbuildings, with options to order up to three additional vessels.
The Partnership intends to secure long-term contract employment for
both vessels prior to their delivery in the first half of 2016. The
newbuildings will be constructed with M-type, Electronically
Controlled, Gas Injection (MEGI) twin engines, which are expected to
be significantly more fuel-efficient and have lower emission levels
than other engines currently being utilized in LNG shipping.
The contract with DSME includes a favorable installment payment
schedule, with the majority of the purchase price due upon delivery.
The Partnership intends to finance the installment payments during
construction with a portion of its existing liquidity, which was
approximately $420 million as of September 30, 2012 (after deducting
the equity required to complete the recently announced Exmar LPG
joint venture acquisition), and expects to secure long-term debt
financing for the two vessels prior to their scheduled delivery.
"The delivery of these vessels is timed to coincide with the next
wave of increased demand for LNG carriers which is expected when a
large number of new LNG export projects come on-stream commencing
from late-2015. They are also among the largest LNG carriers that
will be able to transit the Panama Canal after its expansion project
is complete, which makes them ideal for U.S. LNG exports. The recent
U.S. Department of Energy study supported the export of LNG from the
U.S.," commented Peter Evensen, Chief Executive Officer of Teekay GP
LLC. "In addition, we are confident these newbuildings will be
especially attractive to our customers given their fuel-efficient
engines as well as being built to a high specification at DSME." Mr.
Evensen continued, "With scheduled delivery in 2016, we believe that
we are well-positioned to charter these LNG newbuildings on
fixed-rate charter contracts prior to their delivery, thereby
providing Teekay LNG with visible built-in growth."
About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is a publicly-traded master limited
partnership 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 L.P. provides LNG, LPG and crude oil
marine transportation services primarily under long-term, fixed-rate
charter contracts with major energy and utility companies through its
fleet of 27 LNG carriers (including one LNG regasification unit),
five LPG/Multigas carriers and 11 conventional tankers. Teekay LNG
Partners' interests in these vessels ranges from 33 to 100 percent.
In addition, Teekay LNG Partners has agreed in principal to acquire a
50 percent interest in a new joint venture with EXMAR NV, which will
own and in-charter LPG carriers and expects this transaction to close
by late-2012 or early-2013; and has entered into an agreement for the
construction of two LNG carrier newbuildings from DSME of South
Korea, which are expected to be delivered in 2016. 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".
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 the Partnership's two LNG carrier
newbuildings; timing and certainty of entering into long-term charter
contracts and long-term financing for the two LNG newbuildings; the
higher fuel-efficiency and lower emissions levels associated with the
MEGI engines; the effect of the newbuildings on the Partnership's
fleet size and cash flows; the potential for the Partnership to
exercise its options to order up to three additional newbuildings
from DSME; and the anticipated increase in demand for LNG shipping
commencing from late-2015 due to new LNG export projects as well as
potentially more exports of LNG from the United States. 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: less than anticipated revenues or higher than
anticipated costs or capital requirements related to the newbuildings
in which the Partnership has agreed to construct; shipyard
construction delays; increased cost to construct the two LNG
carriers; failure of the MEGI engine to provide the expected
efficiency and emission specifications; failure by the Partnership to
secure charter contracts and/or financing prior to the delivery for
the two LNG carrier newbuildings, and for any additional vessels that
the Partnership may order through exercise of its newbuilding
options; 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, 2011. 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.
Teekay LNG Partners L.P.
Investor Relations Enquiries
+ 1 (604) 609-4740
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