Teekay GP, the general partner of Teekay LNG Partners today said that during the fourth quarter of 2011, the Partnership generated distributable cash flow of $44.1 million, compared to $39.3 million in the same quarter of the previous year.
The increase primarily reflects the incremental distributable cash flow resulting from the November 2010 acquisition of a 50 percent interest in two liquefied natural gas (LNG) carriers; the June and October 2011 acquisitions of two Multigas carriers; the August, September and October 2011 acquisitions of a 33 percent interest in three LNG carriers; and the September 2011 acquisition of one liquefied petroleum gas (LPG) carrier; partially offset by the sale of the Dania Spirit LPG carrier in November 2010.
In October 2011, the Partnership announced that its joint venture with Marubeni Corporation agreed to acquire ownership interests in eight LNG carriers from Denmark-based global conglomerate, A.P. Moller-Maersk A/S (Maersk). Since that time, there have been a number of developments related to the acquisition which is scheduled to be completed by the end of February 2012:
-- The majority owners of the two LNG carriers that were 26 percent owned by Maersk exercised their rights to acquire the remaining interests in the vessels, thereby reducing the number of LNG carriers to be acquired by the joint venture from eight to six and the total purchase price from approximately $1.4 billion to approximately $1.3 billion. -- Teekay LNG and Marubeni Corporation have secured debt financing for approximately 80 percent of the purchase price, with the remaining 20 percent to be funded by each joint venture partner. Teekay LNG's equity portion amounts to $138 million which will be sourced from the $179.5 million in proceeds from the Partnership's November 2011 follow-on equity offering. -- The charter extension option on the Maersk Meridian was exercised by the customer, extending the current contract by an additional 18 years. -- A new, three-year charter contract at a fixed-rate of approximately $130,000 per day was entered into for the Maersk Methane, commencing in April 2012. “ I am pleased to announce that we expect the Teekay LNG-Marubeni Joint Venture to complete its acquisition of the Maersk LNG fleet next week,” commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. “This acquisition is expected to generate approximately $40 million of incremental distributable cash flows to the Partnership in 2012, and builds on the stable, fixed-rate cash flows from the three LPG/Multigas carriers and interests in the four LNG carriers that we have recently added to our fleet .”
Mr. Evensen continued, “ Given the strong fundamentals that are driving up spot LNG shipping rates and the compelling outlook for the supply and demand of LNG, we expect to remain active in our assessment of near-term acquisition opportunities while continuing to bid on new long-term gas projects. After completion of the acquisition of the Maersk LNG fleet, we expect the Partnership will have approximately $400 million of available liquidity and thus, remain well-positioned to take advantage of future growth opportunities .”
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LNG World News Staff, February 23, 2012