South Korea''s Daewoo to build LNG carriers fTeekay

South Korea-based Daewoo Shipbuilding & Marine Engineering will build two liquefied natural gas (LNG) carriers for Teekay LNG Partners.

Teekay said the carriers will be among the largest to pass through the Panama Canal, therefore enabling the US to make LNG exports through the channel upon completion of the expansion project.

The new carriers will join the fleet of Teekay, which charters LNG, LPG and crude oil marine transportation services to energy and utility companies under long-term contracts; the company's fleet includes 27 LNG carriers, five LPG / multigas carriers and 11 conventional tankers.

Teekay expects to sign long-term lease contracts for the two new carriers before they are delivered in 2016.

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

"With scheduled delivery in 2016, we believe that we are well-positioned to charter these LNG newbuildings on fixed-rate charter contracts prior to their delivery, thereby providing Teekay LNG with visible built-in growth," added Evensen.

The latest contract with Daewoo, which includes an option to order up to three more vessels, outlines payment in installments during construction, while a major part of the purchase price is due upon the delivery of the vessels.

Teekay plans to finance the two carriers through long-term debt financing. The value of the contract has not been disclosed.

The 173,400m©ø LNG carriers are expected to be more fuel-efficient and have lower emission levels than conventional ones, as they will be installed with M-type, electronically-controlled, gas injection (MEGI) twin engines.

Evensen said that the company is confident the new vessels will be beneficial to its customers.