HAMILTON, BERMUDA--(Marketwired - Dec. 16, 2015) - Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE:TGP), has approved a plan to reduce its quarterly cash distributions to $0.14 per common unit, down from $0.70 per common unit in the third quarter of 2015, commencing with the fourth quarter of 2015 distribution payable in February 2016. The Partnership expects to use a significant portion of its internally generated cash flow to fund equity capital requirements on its future profitable growth projects and reduce debt levels, eliminating the need to access the equity capital markets for the foreseeable future.

"Despite significant weakness in the global energy and capital markets, Teekay LNG's businesses remain strong," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "The Partnership's cash flows remain stable and growing, supported by a large and well-diversified portfolio of fee-based contracts with high quality counterparties," Mr. Evensen continued. "However, as a growing MLP, Teekay LNG does require capital and there is currently a dislocation in the capital markets relative to the stability of our businesses such that the Partnership's cost of equity has increased to the point where it is currently not an economically attractive source of capital. Based on the upcoming capital requirements for our committed growth projects, coupled with the uncertainty regarding how long it will take for the energy and capital markets to normalize, management and the Partnership's Board of Directors believe that it is in the best interest of the Partnership's unitholders to conserve our internally generated cash flows to fund future growth projects and reduce our debt levels."

Mr. Evensen added "This decision by management and the Partnership's Board of Directors was not taken lightly. Numerous options were considered, including selling existing assets and future growth projects, and evaluating potential alternative sources of capital, which could have resulted in permanent dilution to existing unitholders. Rather than take this course, we determined that temporarily reducing our cash distributions is the most reliable way to fund our future profitable growth projects with the lowest cost of capital. We believe this prudent approach will strengthen the Partnership's financial position, preserve our long-term growth potential, and will result in higher distributable cash flow per unit."

Teekay Corporation and the Partnership plan to host a joint conference call on Thursday, December 17, 2015 at 8:45 a.m. (ET) to discuss this announcement. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:

  • By dialing 1-800-524-8950 or 1-416-260-0113, if outside North America, and quoting conference ID code 4020024.
  • By accessing the webcast, which will be available on Teekay LNG's website www.teekaylng.com (the archive will remain on the website for a period of 30 days).

About Teekay LNG

Teekay LNG Partners is one of the world's largest independent owners and operators of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 50 LNG carriers (including one LNG regasification unit and 21 newbuildings), 30 LPG/Multigas carriers (including three in-chartered LPG carriers and seven newbuildings) and eight 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 (NYSE: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 Partnership's fourth quarter 2015 cash distribution to be paid in February 2016; the strength of the Partnership's businesses; the stability and growth of the Partnership's future cash flows and distributable cash flow per unit; use of internally generated cash flow to fund equity capital requirements and reduce debt levels, including eliminating the need to issue new equity capital for the foreseeable future; the impact of cash distribution reductions on the Partnership's financial position, long-term growth potential and cost of capital; and the potential for future cash distribution increases. 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: potential shipyard construction delays, newbuilding specification changes or cost overruns; changes in production of LNG or LPG, either generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification projects significantly affecting overall vessel tonnage requirements; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing vessels in the Teekay LNG fleet; the inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels; the Partnership's ability to raise adequate financing and generate internally generated cash flow to purchase additional assets and complete organic growth projects; 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, 2014 and on Form 6-K for the quarter ended September 30, 2015. The Partnership expressly disclaims any obligation or undertaking 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.

Contact Information:

For Investor Relations enquiries contact:
Ryan Hamilton
Tel: +1 (604) 609-6442
Website: www.teekaylng.com