Teekay LNG Partners funds newbuilding pair

MLP nets loan for two ships as it reveals a retreat in fourth quarter earnings.

Teekay LNG Partners finalised funding for a pair of newbuildings as it reported a slip in fourth quarter profitability today.

The MLP says a 10-year loan running to $360m has been signed for its two MEGI LNG newbuildings.

Both of the ships, the first of which has begun sea trials, have long term contracts with Cheniere Energy in place.

The loan was disclosed as Teekay LNG reported adjusted fourth quarter profit of $39.5m, down from $45.6m a year ago.

The owner, which is converting one of its newbuildings into an FSU to serve a project in Bahrain, continues to enjoy stable cash flows, chief executive Peter Evensen says.

Evensen says the Bahrain project has helped take forward fee based revenue to $12.1bn.

“Looking ahead to 2016, we remain focused on executing on the Partnership’s portfolio of profitable growth projects, ensuring they remain on time and on budget and securing long-term financing for these projects,” he said.

Two ships, the 165,500-cbm Marib Spirit and Arwa Spirit (both built 2008), in which Teekay has a 52% interest, remain on a pay freeze following the shutdown of the project they were serving in Yemen.

Teekay says it expects deferred payments to be made once the vessels begin trading again.