Teekay awarded LNG contracts

Teekay Shipping Corporation has been awarded contracts to charter two 155,000 cubic-metre LNG carriers to the Tangguh LNG project in Indonesia. The contractual relationship for the 20-year fixed-rate charters will be with the Tangguh Production Sharing Contractors, a consortium led by BP Berau, a subsidiary of BP plc. The vessels will be chartered at fixed rates, with inflation adjustments, commencing in late 2008 and early 2009.

In connection with this award, Teekay has exercised shipbuilding options with Hyundai Heavy Industries to construct two LNG carriers at preferential prices compared to current market values. Teekay is entering into these transactions with an Indonesian partner who has taken a 30% interest in the vessels. In accordance with existing agreements, Teekay is required to offer its ownership interest in these vessels and related charter contracts to its 78%-owned subsidiary Teekay LNG Partners L.P..