Teekay LNG Partners reports Q2 2014 results
Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. , today reported the Partnership's results for the quarter ended June 30, 2014, the company said in its press release. During the second quarter of 2014, the Partnership generated distributable cash flow(1) of $61.5 million, compared to $55.4 million in the same quarter of the previous year. The increase in distributable cash flow was primarily due the Partnership's acquisition and charter-back of two liquefied natural gas (LNG) carriers from Awilco LNG ASA (Awilco) in September and November 2013, respectively, and higher earnings from the Partnership's LPG carriers within Exmar LPG BVBA (Exmar LPG Joint Venture), which were partially offset by reduced cash flow as a result of the sale of two 2000-built conventional tankers, Tenerife Spirit and Algeciras Spirit, in December 2013 and February 2014, respectively.
On July 9, 2014, the Partnership declared a cash distribution of $0.6918 per unit for the quarter ended June 30, 2014. The cash distribution is payable on August 8, 2014 to all unitholders of record on July 25, 2014.
"In June and July, we finalized two notable transactions that we have been working on for some time that will provide future distributable cash flow growth for the Partnership and which highlight our new strategic relationships with China-based partners," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "Through our new 50/50 joint venture with China LNG Shipping, we agreed to provide six icebreaker LNG carrier newbuildings for the Yamal LNG project which are scheduled to deliver in 2018 through 2020 and operate under fixed-rate contracts until 2045. And the Partnership acquired ownership interests, together with two China-based energy and shipping companies and one international shipping company, in four LNG carrier newbuildings to be built in China. These LNG carriers are scheduled to deliver in 2017 through 2019 at which time they will commence 20-year fixed-rate charter contracts with BG Group. Together, these two transactions provide additional diversification of the Partnership's fixed-rate contract portfolio and increase its total forward fixed-rate revenues to approximately $11 billion, while also extending the remaining weighted-average contract duration for our LNG carrier fleet to approximately 14 years. Looking ahead, the addition of these new vessels will further complement the Partnership's existing pipeline of growth projects, which includes 10 LPG carrier newbuildings, through our Exmar LPG joint venture, and five MEGI LNG carrier newbuildings, all scheduled for delivery between 2014 and 2018."
Mr. Evensen added, "We continue to see strong long-term fundamentals for marine-based liquefied gas transportation, which is already creating new opportunities for LNG and LPG shipping. In the United States alone, the expected start-up of several LNG liquefaction projects from 2016 onwards is expected to create demand for over 80 additional LNG carriers. With a solid operating track record, a steadily expanding fleet of modern fuel-efficient vessels, and a strong financial foundation, we believe Teekay LNG is well-positioned for future growth."