Teekay LNG Partners Acquires Ownership Interests in Four LNG Newbuildings

HAMILTON, BERMUDA--(Marketwired - Jul 7, 2014) - Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (TGP) today announced that it has acquired from BG Group (BG) ownership interests in four 174,000 cubic meter Tri-Fuel Diesel Electric (TFDE) liquefied natural gas (LNG) carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China. The vessels, which are scheduled to deliver between September 2017 and January 2019, will each operate under 20-year time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG.

Through this transaction, the Partnership has acquired a 30 percent ownership interest in the first two LNG carrier newbuildings with the balance of ownership held by CETS (an affiliate of China National Offshore Oil Corporation (CNOOC)) and China LNG Shipping (Holdings) Limited (CLNG), and a 20 percent ownership interest in the second two LNG carrier newbuildings with the balance of ownership held by CETS, CLNG and BW Group.

Teekay Corporation will provide construction supervision services for the newbuildings and technical management of the vessels upon their respective deliveries.

The Partnership will finance its pro rata equity interest in future shipyard installment payments using a portion of its available liquidity with the balance of the total cost of the vessels financed with a new approximately $800 million long-term debt facility secured by the vessels.

"We are pleased to announce this accretive acquisition, which adds liquefied gas to the Teekay Group's strategic relationship with BG Group while also establishing new relationships with China-based partners," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "The long-term time-charter contracts for the four newbuildings, which complement and expand Teekay LNG's existing fixed-rate contact portfolio, will provide further stability for the Partnership's cash flows. These vessels also further strengthen Teekay LNG's existing pipeline of growth projects scheduled to deliver between 2014 and 2018, which includes 10 LPG carrier newbuildings, through our Exmar LPG joint venture, and five MEGI LNG carrier newbuildings."

About Teekay LNG Partners L.P.

Teekay LNG Partners is the world's second largest independent owner and operator of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 38 LNG carriers (including one LNG regasification unit and nine newbuildings), 31 LPG/Multigas carriers (including five chartered-in LPG carriers and 10 newbuildings) and nine conventional tankers. The Partnership's interests in these vessels range from 20 to 100 percent. Teekay LNG Partners L.P. is a publicly-traded master limited partnership (MLP) formed by Teekay Corporation (TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.

Teekay LNG Partners' common units trade on the New York Stock Exchange under the symbol "TGP".

FORWARD LOOKING STATEMENTS

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: the impact of the acquisition on the Partnership's future cash flows; the Partnership's method of financing its pro rata portion of shipyard installment payments; and the timing and certainty of the deliveries of the four LNG newbuildings and the Partnership's existing LNG and LPG newbuildings. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: shipyard construction delays; the potential early termination of the charter contracts with BG; changes in production of LNG, either generally or in particular regions that would impact the expected future growth in the global LNG transportation and regasification markets; changes in trading patterns or timing of the start-up of new LNG liquefaction projects significantly impacting global LNG shipping requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; and other factors discussed in Teekay LNG Partners' filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2013. The Partnership expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.