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Teekay LNG profits in Q1, largely insulated from short-term market

Teekay LNG profits in Q1, largely insulated from short-term market
Teekay LNG Partners has booked a net profit of $66.3m in the first quarter 2015, lifted by $25.9m in foreign exchange gains.

The result improves on Q1 2014's $43m profit and comes despite a slight drop in net voyage revenues to $97m from $100m in the same period last year.

During the period the Magellan Spirit was grounded; the ship was refloated, but its charterer claimed 59-days of off-hire which it believes gives it right to terminate a charter that would otherwise have ended in September 2016. Legal advice has been sought by the company over the dispute as it disagrees with the off-hire length and the basis for terminating the charter.

Teekay LNG ordered one 173,400 cu m newbuilding at Daewoo Shipbuilding and Marine Engineering during the quarter for $225m; the shipbuilding contract has four options attached to it, and has delivery scheduled at the end of 2018.

Peter Evensen, ceo of Teekay GP, the general partner of Teekay LNG Partners, commented: “With approximately $11.2bn of forward fixed-rate revenues with an average duration of 13 years, the partnership is largely insulated from short-term LNG shipping rate fluctuations and remains well-positioned for expected future growth.

“Our LPG business also continues to produce stable results, underpinned by strong realised rates and utilisation in our LPG joint venture with Exmar. During the quarter, the partnership’s LPG joint venture took delivery of the fourth of 12 mid-size LPG carrier newbuildings, which will contribute to fleet renewal and future growth within our LPG carrier fleet.”

In his outlook Evensen noted a project pipeline of $3.4bn and strong long-term fundamentals for LPG transportation.