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DSME to build icebreaking LNG carriers for Yamal project

10th July 2014

Teekay LNG Partners L.P, through a new 50/50 joint venture with China LNG Shipping, has finalised shipbuilding contracts for six internationally-flagged icebreaker liquefied natural gas (LNG) carriers for the Yamal LNG Project, which is located on the Yamal Peninsula in Northern Russia

Teekay LNG and China LNG contracts DSME to build icebreaking LNG carriers for Yamal project
Yamal LNG, a joint venture between Russia-based Novatek (60 per cent), France-based Total (20 per cent) and China-based China National Petroleum Corporation (CNPC) (20 per cent), will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum

Under the agreements, the joint venture between Teekay LNG and China LNG will build six 172,000 cubic metre ARC7 LNG carrier newbuilds to be constructed by Daewoo Shipbuilding & Marine Engineering (DSME) of South Korea, for a total fully built-up cost of approximately USD 2.1 billion.

The vessels will be constructed with maximum 2.1 metre icebreaking capabilities in both the forward and reverse direction.

Yamal LNG, a joint venture between Russia-based Novatek (60 per cent), France-based Total (20 per cent) and China-based China National Petroleum Corporation (CNPC) (20 per cent), will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018.

"We are pleased to finalise this previously announced accretive transaction, which solidifies Teekay LNG's role in Yamal LNG, a strategic international energy project sponsored by Novatek, Total and CNPC, and further expands our partnership with China LNG," said Peter Evensen, chief executive officer of Teekay GP LLC. "These six newbuildings will both increase and extend the average duration of Teekay LNG's existing fixed-rate contact portfolio, providing further long-term stability for the Partnership's cash flows.

“These vessels also add to Teekay LNG's existing pipeline of growth projects scheduled to deliver between now and 2020, which includes our five MEGI LNG carrier newbuildings, 10 LPG carrier newbuildings ordered through our Exmar LPG joint venture, and our ownership interest in four LNG carrier newbuildings that will be chartered to BG Group."

The signing by the owner of the remaining newbuilding carriers required for the Yamal LNG Project will take place in Russia.

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