Teekay's LNG Carrier Newbuilds Gain 5-Year Charter Contracts

Image via Teekay Facebook

Teekay LNG Partners L.P. (NYSE:TGP) has announced that it has entered into two, five-year time-charter contracts with Cheniere Marketing, LLC to provide them with Liquefied Natural Gas transportation services.

The fixed-rate time-charter contracts will be serviced by the two 173,400 cubic meter LNG carrier newbuildings ordered by Teekay LNG in December 2012. The ships are currently under construction by Daewoo Shipbuilding & Marine Engineering of South Korea and are scheduled to be delivered in the first half of 2016.

These new ships are designed to be the maximum size to fit through the new Panama Canal, thus be ideally suited to service LNG export needs from Cheniere’s LNG export facility at Sabine Pass.

Powering the two vessels will be MAN B&W 5G70ME-GI Engine M-type, Electronically Controlled, Gas Injection (MEGI) twin 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 MEGI-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.”