Teekay Books Newbuilds After Signing Long-Term Contract to Ship U.S. LNG

Teekay LNG Parters, the LNG delivery unit of Bermuda-based Teekay Corporation, has positioned an order for 2 fuel-efficient LNG carriers after reserving as much as two time-charter contracts with BP Shipping Limited to be used of the vessels.

The order was positioned at Hyundai Samho Heavy Industries Co., Ltd. of South Korea and requires the development of two 174,000 cubic meter LNG carriers with the choice for a 3rd ship.

Teekay LNG positioned the order after it entered right into a 13-year time-charter contract with BP Shipping Limited for one LNG newbuilding, plus BP has the choice for one further LNG provider beneath comparable phrases. The possibility exercisable by the tip of the third quarter of 2015.

The vessels, together with the non-compulsory third vessel, will primarily be used to move BP’s LNG volumes from the Freeport LNG export facility situated on Quintana Island close to Freeport, Texas. Freeport LNG acquired last approval to assemble and function the export facility in November 2014 after a four-year allowing course of. The facility will encompass three LNG trains with a complete capability of 13.2 metric tonnes every year and it’s anticipated to start business operations in 2018.

Teekay says the brand new vessels shall be fuel-efficient and initially financed by installment funds from a portion of its present liquidity. The firm says it expects to safe long-term debt financing for the vessels previous to the scheduled deliveries.

The two vessels are scheduled for supply within the first quarter of 2019.

“We are excited to be supporting our second U.S. 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.”