Teekay, BP ink LNG charter deal

Teekay LNG Partners has entered into a 13-year time-charter contract with BP Shipping for one liquefied natural gas carrier newbuilding.

The deal includes an option exercisable by BP by the end of the third quarter of 2015 for one additional LNG carrier under similar terms, Teekay said in a statement on Monday.

The vessels, including the optional vessel if exercised, will primarily provide transportation services for BP’s LNG volumes from the Freeport LNG project located on Quintana Island near Freeport, Texas, which consists of three trains with a total capacity of 13.2 metric tonnes per annum, scheduled for start-up in 2018.

In connection with signing the contracts with BP, Teekay LNG ordered two fuel-efficient 174,000 cubic meter LNG carrier newbuildings to be constructed by Hyundai Samho Heavy Industries of South Korea, scheduled for delivery in the first quarter of 2019, plus an option to order one additional vessel.

The Partnership intends to initially finance the installment payments for the LNG carrier newbuildings with a portion of its existing liquidity and it expects to secure long-term debt financing for the vessels prior to their scheduled deliveries, the statement added.

Image: Teekay