Seeking Alpha

Teekay LNG Partners L.P. (TGP)

  • Thu, Apr. 9, 2:59 PM
    • Royal Dutch Shell's (RDS.A, RDS.B) planned acquisition of BG Group (OTCPK:BRGXF, OTCQX:BRGYY) would create a giant operator of liquefied natural gas ships, offering owners that charter the ships more opportunities for lucrative, long-term contracts in an otherwise depressed shipping industry.
    • Energy producers such as Shell and BG lease rather than own most of the ships moving their products, and the leases go to a handful of trusted owners, generating ~$75K/day for a ship that carries 160K cm of LNG; the break-even point for such a ship is $50K at most.
    • A main beneficiary is GasLog (GLOG, GLOP), which has chartered its vessels to Shell, BG and other energy producers for nearly 15 years; GLOG, whose shares gained 4% yesterday on news of the merger, charters 15 LNG carriers to BG and two to Shell from a total fleet of 27 carriers.
    • The deal is "a strong signal from Shell that they see their future in LNG... [it] shows their desire to grow the business and puts us in a good place to grow with them," says GLOG CEO Paul Wogan.
    • Teekay LNG Partners (NYSE:TGP) is another LNG vessel operator expected to benefit from LNG demand.
Visit Seeking Alpha's
TGP vs. ETF Alternatives
Company Description
Teekay LNG Partners LP providesmarine transportation services for LNG, LPG and crude oil. The Company's business segments areliquefied gas and conventional tanker.