Teekay LNG Partners Acquires Two LNG Carriers
March 19 2008 - 5:36PM
Marketwired
HAMILTON, BERMUDA (NYSE: TGP), today announced that Teekay LNG
has agreed to acquire two 1993-built, 88,000 cubic meter
specialized LNG vessels, the Arctic Spirit and the Polar Spirit,
from Teekay Corporation (Teekay) for a total cost of $230 million.
Teekay LNG expects to acquire these vessels on April 1, 2008, and
immediately charter the vessels back to Teekay for a period of ten
years (plus options exercisable by Teekay to extend up to an
additional fifteen years). These charters are expected to generate
approximately $27 million per annum in operating cash flow to the
Partnership. Teekay LNG intends to finance the acquisition
initially with its existing cash balances and undrawn revolving
credit facilities.
In December 2007, Teekay purchased the two vessels from a joint
venture between ConocoPhillips and Marathon Oil Corporation for
$230 million and chartered back the vessels to the sellers until
April 2009 (with options exercisable by the charterers to extend up
to an additional seven years). Teekay was obligated to offer these
vessels to Teekay LNG in accordance with the Omnibus agreement
between the parties.
"We are pleased that Teekay LNG has been able to make this
accretive acquisition," commented Peter Evensen, Teekay GP LLC's
Chief Executive Officer. "Given the uncertain length of the
charters to the ConocoPhillips and Marathon Oil joint venture
company, we believe that the long-term charters to Teekay are a
better alternative for Teekay LNG since they will provide long-term
stable cash flows for the Partnership. These two vessels, together
with our nine scheduled newbuilding deliveries, should allow us to
meaningfully increase Teekay LNG's cash distributions in both 2008
and 2009. Teekay LNG's current annualized distribution of $2.12 per
unit already represents an attractive yield of over 7.7% based on
our March 18, 2008 closing price of $27.45."
About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is a publicly-traded master limited
partnership formed by Teekay Corporation (NYSE: TK) as part of its
strategy to expand its operations in the LNG and LPG shipping
sectors. Teekay LNG Partners L.P. provides LNG, LPG and crude oil
marine transportation services under long-term, fixed-rate time
charter contracts with major energy and utility companies through
its fleet of thirteen LNG carriers, four LPG carriers and eight
Suezmax class crude oil tankers. Six of the thirteen LNG carriers
are newbuildings scheduled for delivery between the second quarter
of 2008 and early 2009. Three of the four LPG carriers are
newbuildings scheduled for delivery between mid-2008 and
mid-2009.
Teekay LNG Partners' common units trade on the New York Stock
Exchange under the symbol "TGP".
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended)
which reflect management's current views with respect to certain
future events and performance, including statements regarding: the
Partnership's future growth prospects; the expected delivery dates
of the vessels to Teekay LNG; the annual operating cash flow
expected from the vessels and their respective charter contracts;
and the expectation of increasing Teekay LNG's cash distributions
meaningfully in 2008 and 2009. The following factors are among
those that could cause actual results to differ materially from the
forward-looking statements, which involve risks and uncertainties,
and that should be considered in evaluating any such statement:
early termination or breach of one or more of the charter
contracts; delays in deliveries of the Arctic Spirit, Polar Spirit
or the nine other scheduled newbuildings; the Partnership's ability
to raise financing to purchase additional vessels; and other
factors discussed in Teekay LNG's filings from time to time with
the SEC, including its Report on Form 20-F for the fiscal year
ended December 31, 2006. The Partnership expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Partnership's expectations with respect
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Contacts: Teekay LNG Partners L.P. Dave Drummond Investor
Relations Enquiries (604) 609-6442 Teekay LNG Partners L.P. Alana
Duffy Media Enquiries (604) 844-6605 Website: www.teekaylng.com
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