Teekay Corp's gas shipping spin-off has fixed its entire LNG fleet on take-or-pay charters for the remainder of this year and secured 94% charter coverage for 2021, the company said in a first-quarter results statement.
Teekay LNG said it fixed its 165,500-cbm Marib Spirit (built 2008) which this month was chartered to a trading company for six months from mid-June.
The New York-listed shipowner also said its MALT joint venture secured new charters for the 165,500-cbm Arwa Spirit and Methane Spirit (both built 2008) for eight months and 12 months, respectively. The new charters start this month and in July.
Teekay Gas Group president and chief executive Mark Kremin said: “I’m pleased that we took proactive steps this quarter to strengthen our commercial position with three new fixed-term LNG charters and to increase our financial flexibility with the refinancing of our unsecured revolver at the same size and pricing, despite the volatility in our markets.”
Teekay LNG Partners reported a net loss attributable to the partners of $33m for the first quarter, against an income of $21.6m in the comparable period of 2019.
The company said increased earnings from new tonnage joining the fleet, some chartered vessels and the start of terminal use payments from its interests in the Bahrain LNG joint venture were partially offset by a reduction in income following the sale of four vessels and lower earnings on the redeployed Marib Spirit.
Quarterly earnings were also hit by $45m write-downs on six multigas carriers, unrealised credit loss provisions and losses on non-designated derivative instruments, the company said.
Earlier this month, Teekay Corp extended its shareholding in Teekay LNG to 42%.
The two companies agreed to scrap all incentive distribution rights in exchange for awarding the parent nearly 10.8m newly-issued Teekay LNG common shares in a move which sparked comment from analysts.
Kremin said: “While the unprecedented recent global events are clearly a major area of focus for us, our long-term contract cover has ensured they have had a minimal impact on Teekay LNG’s operations and cash flows so far in 2020, and we expect this to continue.”
The gas group chief executive praised the company’s “dedicated seafarers and on-shore colleagues” in their response to the Covid-19 pandemic.
He said the company is “well-positioned” to meet its upcoming debt maturities with the need to access the capital markets until later next year.
“Given the long-term stability of our business model, we are today reaffirming our fiscal 2020 financial guidance which projects an increase in adjusted net income of approximately 48% over 2019,” he added.
Teekay LNG’s owned and chartered fleet comprises 47 LNG carriers, 23 midsize LPG carriers and seven multi-gas carriers. The company also owns a 30% stake in Bahrain’s LNG terminal where one of its vessels acts as the seasonal floating storage unit.
