Boston, MA 04/07/2014 (wallstreetpr) – Teekay LNG Partners L.P. (NYSE:TGP) is a marine transportation services provider. The company’s services cover international scale, and involve transportation of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and crude oil. Thus, the company has two main segments, namely conventional tanker and liquefied gas.
The limited partnership company was formed by Teekay Corporation (NYSE:TK). It was part of the TK’s strategy to increase its footprint in LPG and LNG shipping sectors. Thus, TGP operates under long-term and fixed-rate shipping contracts, serving major energy and utilities companies. The company’s main strength area is its fixed-rate and long-term contract business model. Thanks to this model of business, the company enjoys stable operating business environment, throughout its two segments. The current average contract life of the company’s LNG carriers is about 12 years.
New opportunity in Europe
The LNG industry is poised for long-term growth opportunities, and the geopolitical crisis sparked by Russian through its military intervention in Ukraine could even boost the LNG growth prospects. With the unsettled political tension gripping Europe over Russia’s action in Ukraine, it is likely that Europe will seek or is already seeking alternative LNG suppliers so as to reduce dependency on Russian gas. In this situation, the U.S. seems to be the viable alternative LNG supplier to Europe.
That being the case, Teekay LNG Partners L.P. (NYSE:TGP) which is the second largest world independent owner of LNG carriers, is well-positioned to benefit from a boom of U.S. LNG supplies to Europe. The company boasts a fleet of 77 vessels, 34 of which are LNG carries, 33 vessels are LPG carriers and 10 vessels are conventional tankers. This fleet is relatively young, but even so, the company has ordered additional new vessels which are expected to arrive in 2016 and some arriving in 2017.
To sum up the story
If Europe is going to seek alternative supplies for its gas demand from the U.S., Teekay LNG Partners L.P. (NYSE:TGP) will be there to benefit from the long-term contracts. Unlike competitors, the company’s interest in its fleet is significantly high, coming in the range of 33 to 100 percent. Now looking at the company which is already distributing 6.4 percent in dividend yield, investors can expect to enjoy long-term high income in this stock.
