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Teekay confirms second LNG carrier purchase

LNG Industry,


Teekay LNG Partners L.P. (NYSE:TGP) announced on Wednesday that it has agreed to obtain a second 155 900 cubic metre liquedied natural gas (LNG) tanker newbuilding from Norway-based operator Awilco LNG ASA (ALNG:NO). The carrier, which is presently under construction by Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) of South Korea, is due to begin delivering in the final quarter of 2013.

Subsequent to delivery from DSME to Awilco, Teekay LNG will purchase the vessel and bareboat charter it back to Awilco at a fixed-rate for a firm period of four years, plus a one-year extension option. As with the first vessel, Teekay LNG will purchase the second 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 for both vessels at the end of both the firm charter period and option period.

The Awilco vessels, the first of which was delivered on September 16, 2013, are each expected to generate annual Distributable Cash Flow of approximately $7.5 million.The Partnership intends to initially finance the second vessel with a portion of its existing liquidity and expects to secure long-term debt financing prior to delivery.

Peter Evensen, Chief Executive Officer of Teekay GP LLC., said: “further to our August 2013 announcement on the first Awilco LNG carrier newbuilding, the acquisition-leaseback of a second vessel from Awilco will provide Teekay LNG with additional near-term accretive cash flows. These vessels will complement the Partnership's strong portfolio of longer-term visible growth projects, including, the four LNG carrier newbuildings delivering in 2016 and the ten LPG newbuildings in our joint venture with Exmar, delivering between 2014 and 2017."

The acquisition of the second Awilco vessel has been approved by Board of Directors of both Teekay LNG and Awilco, and remains subject to customary closing conditions, including satisfactory documentation.


Adapted from press release by Ted Monroe

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/27092013/teekay_lng_partners_announces_second_lng_vessel_purchase/


 

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