Teekay LNG Could Postpone Delivery of New LNG Carrier

Owner and operator of liquefied natural gas carriers Teekay LNG Partners is considering to postpone the delivery of its unchartered newbuilding MEGI LNG carrier, Torben Spirit, by up to ten months.

Namely, under the agreement reached with South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME) in July, the company has an option to push the delivery of the 173,000 cbm newbuilding from February 2017 to October 2017.

As it is currently pursuing employment opportunities for the vessel, the company said it will decide in late-2016 on whether to defer the delivery.

Furthermore, Teekay LNG’s second MEGI LNG carrier newbuilding, Oak Spirit, started its five-year fee-based contract with Houston-based energy company Cheniere Energy on August 1, 2016.

The vessel is expected to earn annual cash flow from vessel operations and distributable cash flow of USD 25 million and USD 15 million, respectively.

Additionally, Teekay LNG’s Exmar LPG joint venture took delivery of its seventh of 12 medium-sized gas carrier newbuildings, which commences its five-year charter contract with Statoil in late-August.

The announcements were made as part of the company’s second quarter financial results. Teekay LNG’s net income for the period stood at USD 43.1 million, against a net income of USD 58.1 million recorded in the same quarter a year earlier.

“The Partnership generated strong cash flows in the second quarter of 2016, which were augmented by a favorable settlement we received relating to an LNG carrier charter contract dispute in our 52 percent-owned MALT joint venture, as well as a full quarter of earnings from our recently delivered Creole Spirit MEGI LNG carrier which commenced its five-year charter contract with Cheniere Energy in late-February 2016,” Peter Evensen, Chief Executive Officer of Teekay GP LLC, said.

During the quarter, the company secured lender credit approvals on over USD 900 million of new debt financings, including three MEGI LNG carrier newbuildings, the first two Yamal LNG Arc7 newbuildings and the majority of the remaining LPG carrier newbuildings, Teekay LNG said.

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