Teekay LNG Partners Cash Flow Climbs in Q4

Teekay LNG Partners reported cash flow of $63.4 million for the fourth quarter of 2013, compared to $53.6 million in the same quarter of the previous year.

The increase in distributable cash flow was primarily due to the Partnership’s acquisition of a 50 percent interest in Exmar LPG BVBA, a liquefied petroleum gas (LPG) carrier joint venture with Exmar N.V. (Exmar), in February 2013 and its acquisition and charter-back of two liquefied natural gas (LNG) carriers from Awilco LNG in September and November 2013. The increase was partially offset by reduced cash flow following the sale of the Tenerife Spirit conventional tanker in December 2013.

On January 15, 2014, the Partnership declared a cash distribution of $0.6918 per unit for the quarter ended December 31, 2013, an increase of $0.0168 per unit, or 2.5 percent, from the previous quarter. The cash distribution was paid on February 14, 2014 to all unitholders of record on January 31, 2014.

“Teekay LNG continued on its course of steady growth in 2013 with the accretive acquisition-charterback transactions with Awilco LNG, which enabled us to increase the Partnership’s fourth quarter distribution by 2.5 percent to $0.6918 per unit,” commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. “Looking ahead, in addition to the two MEGI LNG carrier newbuildings chartered to Cheniere starting in 2016, we expect the Partnership’s three currently unchartered MEGI LNG carrier newbuildings delivering in 2017 will be well-positioned to take advantage of the anticipated strong LNG shipping fundamentals relating to the expected start-up of several new LNG liquefaction projects beginning in 2016,” Mr. Evensen continued. “In addition to securing employment for these three unchartered newbuildings, the Partnership is also engaged in LNG shipping and floating regasification project tender opportunities with expected start-up dates in the same timeframe.”

Evensen added, “With 100 percent of Teekay LNG’s on-the-water LNG carrier fleet operating under fixed-rate contracts with an average remaining duration of 12 years, the Partnership is largely insulated from the recent declines in spot LNG shipping rates. Over the next three years, only two of Teekay LNG’s LNG carriers, both of which are 52-percent owned, are scheduled to roll-off their existing contracts, limiting the Partnership’s exposure to any short-term rate volatility through 2016.”