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Teekay LNG signs contract with BP

LNG Industry,

Teekay LNG Partners L.P. (Teekay LNG) has recently announced that it has agreed a 13 year time-charter contract with BP Shipping Limited (BP) for one LNG carrier newbuilding, as well as an option exercisable by BP by the end of the 3Q15 for one additional LNG carrier under similar terms. The vessels, including the optional vessel if exercised, will primarily provide LNG transportation services for BP's LNG volumes from the Freeport LNG project located on Quintana Island near Freeport, Texas, which consists of three LNG trains with a total capacity of 13.2 tpa, scheduled for start-up in 2018.

In connection with signing this contract with BP, Teekay LNG ordered two fuel-efficient 174 000 m3 LNG carrier newbuildings to be constructed by Hyundai Samho Heavy Industries Co., Ltd. of South Korea. This is scheduled for delivery in the 1Q19, plus an option to order one additional vessel. Initially, Teekay LNG intends to finance the installment payments for the LNG carrier newbuildings with a portion of its existing liquidity and it expects to secure long-term debt financing for the vessels prior to their scheduled deliveries.

Comment from Teekay LNG Partners L.P.

"We are excited to be supporting our second US LNG export project, adding Freeport LNG to our existing charters committed to Cheniere Energy's Sabine Pass, and we look forward to the continued growth in U.S. LNG exports, which are expected to create substantial future demand for LNG transportation services," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "This accretive transaction both builds on our strong relationship with BP and our portfolio of fuel-efficient LNG carrier newbuildings on long-term contracts."

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