Teekay LNG secures new charter deal as profit drops

Teekay LNG, one of the world’s largest operators of liquefied natural gas tankers, said Thursday its joint venture with Marubeni signed an 18-month charter contract with a Japanese utility.

The charter starts in the fourth quarter of 2018, and the agreement allows the Japanese utility to extend the contract for one year.

This charter contract will be serviced by one of the MALT LNG joint venture’s existing vessels currently trading in the short-term market.

In addition, the joint venture has also completed the refinancing of four LNG carriers with a new $335 million debt facility.

Awilco LNG charter negotiations

Teekay LNG started charter extension and deferral negotiations with Awilco LNG regarding two modern LNG vessels chartered to Awilco LNG, which include purchase obligations for Awilco LNG to acquire the vessels in November 2017 and September 2018.

The negotiations are expected to conclude in the second quarter of 2017.

Net profit drops

Revealing the company’s financial results, Teekay LNG said its adjusted net income in the first quarter of this year was at $21 million. This compares to $34million in the same quarter the year before.

The partnership’s income, as well as cash flow from vessel operations which reached US$43.2 million during the first quarter, increased in comparison to the corresponding quarter in 2016, primarily due to the deliveries of the Creole Spirit and Oak Spirit MEGI LNG carrier newbuildings, which commenced their five-year charter contracts with Cheniere Energy in late-February 2016 and early-August 2016, respectively.

The cash flow was also positively affected by the one-month contribution of the Torben Spirit MEGI LNG carrier newbuilding, which commenced its 10-month plus one-year option charter contract with a major energy company in early-March 2017.