Teekay Offshore to Wrap Up USD 1.26bn Knarr FPSO Buy

Teekay Offshore to Wrap Up USD 1.26bn Knarr FPSO Buy

Teekay Offshore Partners L.P. will complete the acquisition of the Petrojarl Knarr floating production, storage and offloading (Knarr FPSO) unit from Teekay Corporation for its fully built-up cost of approximately USD 1.26 billion on July 1, 2015.

The FPSO has now completed all the required operational testing and has commenced its full charter rate under the long-term contract on the Knarr oil and gas field in the North Sea where BG Norge Limited (BG) is the operator.

The Knarr FPSO acquisition will be fully financed through the assumption of an existing USD 745 million long-term debt facility and USD 550 million of equity financing.

The equity financings will also fund a portion of the initial installments of the three shuttle tanker newbuildings being constructed for the east coast of Canada 15-year shuttle tanker contracts awarded to Teekay Offshore in early-June 2015.

Teekay Offshore also announced that its first Unit for Maintenance and Safety – the Arendal Spirit – has recently completed the required operational testing and commenced its three-year charter contract with Petrobras in Brazil.

“We are pleased to be completing the Partnership’s largest acquisition to-date, which will bring our total FPSO fleet to eight units, and to have successfully commenced the charter contract for the Partnership’s first UMS,” said Peter Evensen, Chief Executive Officer of Teekay Offshore GP LLC.

“The Knarr FPSO will further strengthen our leading position in the harsh weather FPSO segment in the North Sea and highlights our strategic partnership with BG, who now represents one of the Partnership’s largest customers. Based on the stable fee-based cash flow to be contributed by the Knarr FPSO and the Arendal Spirit UMS, management has recommended to the Partnership’s Board of Directors a distribution increase of four percent commencing in the third quarter, payable in November 2015.”

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