Teekay LNG Partners, one of the world’s largest owners of LNG carriers, dropped into red during the first quarter of 2018.
The company reported a net loss of $6.9 million compared to a net income of $29 million during the corresponding quarter in 2017, attributing the loss to a tax identification provision and write-down of conventional oil tankers.
The adjusted net income edged up slightly $21 million in the first quarter of 2017, to $22 million in 2018.
It was positively impacted by the deliveries of seven liquefied natural gas (LNG) and three liquefied petroleum gas (LPG) carrier newbuildings between February 2017 and February 2018 and the commencement of short-term charter contracts for certain of the vessels in the partnership’s 52 percent-owned joint venture with Marubeni Corporation.
Quarterly voyage revenues also increased during the period under review, reaching $115 million 14 percent up on $101 million reported in the quarter ending March 31, 2017.
Commenting on the results, Mark Kremin, president and CEO of Teekay Gas Group noted that the company has only taken delivery of seven vessels out of its total LNG newbuilding program of 18 and a large portion of the incremental $310 million of annual cash flow from vessel operations have not yet been reflected.
“The partnership successfully re-chartered the Arctic Spirit and Polar Spirit LNG carriers for four years and one year, respectively, upon their redeliveries from Teekay Corporation in May and March of this year,” Kremin said noting the vessels will service the Chinese LNG import market.
Polar Spirit was chartered to an Asian-based energy company for a period of approximately three months and then subsequently secured forward employment beginning in July 2018 for nine months with a Petronas unit.
In addition, the partnership secured a four-year charter contract for the Arctic Spirit, also with a Petronas unit, which commenced immediately upon redelivery from Teekay Corporation in May 2018.
In May 2018, the partnership agreed to a six-month charter extension of the Torben Spirit MEGI LNG carrier to a major energy company out to December 2018.
Among the new deliveries, the company said that in February and May, it took delivery of two M-Type, electronically controlled, gas injection (MEGI) LNG carrier newbuildings, the Magdala and Myrina, both of which immediately commenced their respective charter contracts with Shell ranging between six and eight years in duration, plus extension options.