DSME bags TGP double

Teekay LNG Partners has chalked up a potential five-ship order at Daewoo Shipbuilding & Marine Engineering.

It has booked two firm vessels at the South Korean yard with options for three more – in what will be the first LNG carrier newbuildings to use the pioneering MEGI gas engine.

The two firm 173,400-cbm ships will hit the water in the first half of 2016, with long-term contracts expected to be secured ahead of that time.

Peter Evensen, CEO of Teekay, said: "The delivery of these vessels is timed to coincide with the next wave of increased demand for LNG carriers which is expected when a large number of new LNG export projects come on-stream commencing from late-2015.

“They are also among the largest LNG carriers that will be able to transit the Panama Canal after its expansion project is complete, which makes them ideal for US LNG exports."

He added: "We are confident these newbuildings will be especially attractive to our customers given their fuel-efficient engines as well as being built to a high specification at DSME."

Teekay LNG says the ships have a favourable payment scheme, with the majority of the cash due to be handed over on delivery.

The partnership, which has $420m in liquidity right now, expects loans to be secured ahead of their arrival.

DSME is already well stocked with LNG newbuildings with orders in the bag from John Angelicoussis, George Economou and Anders Wilhelmsen’s Awilco.

Prior to Teekay’s move 86 LNG newbuildings had been penned since 2011, one third of which are presently unemployed, Reuters’ data shows.

Ten of the 25 LNG carriers set to arrive next year are unemployed and a further 22 vessels without contracts are slated to enter the market in 2014, the news wire reported this week.

Teekay’s swoop should come as no surprise with Evensen suggesting last month an LNG carrier ordering window was now open.

“Steel prices have come off. Supplier equipment doesn't have the tightness in the supply chain, and frankly, shipyards are more eager,” he said during a conference call.

“We want it when the equity gas is coming in 2015, 2016, 2017."

Evensen, speaking after Teekay Corp reported a stronger than expected set of third quarter numbers, said new FSRU vessels could be on the cards.

He revealed Teekay was in the running for several projects, but had yet to win out in one of those races.

Teekay LNG Partners saw its profit 28% jump in third quarter on the back of recent vessel acquisitions