Teekay LNG Partners L.P. through a new 50/50 joint venture with China LNG Shipping (Holdings) Limited (China LNG), announced that it has finalized shipbuilding contracts for six internationally-flagged icebreaker liquefied natural gas (LNG) carriers for the Yamal LNG Project, which is located on the Yamal Peninsula in Northern Russia.

Under the agreements, the joint venture between Teekay LNG and China LNG will build six 172,000 cubic meter ARC7 LNG carrier newbuildings to be constructed by Daewoo Shipbuilding & Marine Engineering Co., Ltd., of South Korea, for a total fully built-up cost of approximately $2.1 billion. The vessels will be constructed with maximum 2.1 meter icebreaking capabilities in both the forward and reverse direction.

Yamal LNG, a joint venture between Russia-based Novatek (60 percent), France-based Total (20 percent) and China-based China National Petroleum Corporation (CNPC) (20 percent), will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018.

"We are pleased to finalize this previously announced accretive transaction, which solidifies Teekay LNG's role in Yamal LNG, a strategic international energy project sponsored by Novatek, Total and CNPC, and further expands our partnership with China LNG," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "These six newbuildings will both increase and extend the average duration of Teekay LNG's existing fixed-rate contact portfolio, providing further long-term stability for the Partnership's cash flows. These vessels also add to Teekay LNG's existing pipeline of growth projects scheduled to deliver between now and 2020, which includes our five MEGI LNG carrier newbuildings, 10 LPG carrier newbuildings ordered through our Exmar LPG joint venture, and our ownership interest in four LNG carrier newbuildings that will be chartered to BG Group."

The signing by the owner of the remaining newbuilding carriers required for the Yamal LNG Project will take place in Russia.