AUGUST 5, 2013 — Teekay LNG Partners L.P. (NYSE:TGP) has agreed to acquire a 155,900 cu.m liquefied natural gas (LNG) carrier newbuild from Norwegian-based Awilco LNG ASA.

The vessel is currently under construction at Daewoo Shipbuilding & Marine Engineering Co., Ltd., (DSME), South Korea, and is expected to deliver in the third quarter of 2013.

On delivery from DSME to Awilco, Teekay LNG will purchase the vessel and bareboat charter the vessel back to Awilco at a fixed rate for a firm period of five years, plus a one-year extension option.

Teekay LNG will purchase the vessel for a price of $205 million less a $50 million upfront prepayment of charter hire by Awilco which is in addition to the daily bareboat charter rate. Awilco has fixed-price purchase obligations at the end of both the firm charter period and option period.

As part of the transaction, Awilco has an option to sell to and bareboat charter back from Teekay LNG a second 155,900 cu.m LNG newbuilding under construction by DSME, under similar terms. The second LNG carrier newbuilding is expected to deliver in the fourth quarter of 2013.

The partnership intends to finance the transaction with a portion of its existing liquidity and expects to secure long-term debt financing prior to delivery.

"We are pleased to announce this mutually beneficial acquisition-leaseback arrangement with Awilco which will provide Teekay LNG with immediate accretive cash flow," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "Together with our four LNG carrier newbuildings delivering in 2016 and the ten LPG newbuildings in our joint venture with Exmar, delivering between 2014 and 2017, this transaction with Awilco provides a near-term compliment to the Partnership's strong portfolio of long-term visible growth projects."