May 4, 2009
HAMILTON, BERMUDA–(Marketwire – May 4, 2009) – Dear fellow unitholder, I am pleased to inform you that the board of Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (the Partnership) (NYSE:TGP), has declared a cash distribution of $0.57 per unit for the quarter ended March 31, 2009, which is unchanged from the previous quarter. The cash distribution is payable on May 15, 2009 to all unitholders of record on May 8, 2009. Teekay LNG Partners remains well-positioned in the current economic environment: – Our distribution is supported by long-term (10 to 25 years remaining) fixed-rate contracts – Our financial profile supports a stable distribution – Our recent $70 million follow-on equity offering has increased our already strong liquidity position to over $550 million and will be used to take delivery of our 2009 capital expenditure program The Partnership’s cash flows are generated from long-term fixed-rate contracts with creditworthy counterparties. Our contracts have operating cost escalators and they are not exposed to commodity price fluctuations, which leads to our stable distribution. Since our IPO in May 2005, we have paid a distribution in every quarter and grown our distribution by an average of 8 percent per year. Based on the May 1, 2009 closing price of $17.75 per unit, our first quarter distribution of $0.57 per unit represents an annualized yield of 13 percent. We are committed to prudently managing our balance sheet to ensure we have the flexibility to take advantage of future growth opportunities. The Partnership has a favorable debt profile with no covenant concerns and no refinancing requirements until December 2011. We are excited about our scheduled growth over the next few years, which will further add to our distributable cash flow. We took delivery of the first of five newbuilding LPG carriers in April 2009 and anticipate delivery of the second vessel in the fourth quarter of 2009. Also in the second quarter of 2009, we expect to complete the previously announced purchase of a 70 percent interest in the two Tangguh LNG carriers. In addition to these confirmed vessels, the Partnership has the right to acquire a 33 percent interest in the Angola LNG project, which includes four newbuild LNG carriers, from Teekay Corporation prior to the delivery of these vessels in 2011 and 2012. The Partnership’s liquidity, which currently stands at over $550 million, includes approximately $70 million of net proceeds from the follow-on public equity offering completed in March 2009. In addition, a loan facility has been arranged for the debt portion of two Tangguh LNG carriers and we expect to receive a commitment to finance all five LPG newbuildings. With these facilities in place, we will require only $120 million to complete our entire newbuild program which can be sourced from our available liquidity and/or cash flow. We thank you for your continued interest in Teekay LNG Partners and look forward to updating you again on our progress in the near future. Sincerely, Peter Evensen, Chief Executive Officer, Teekay GP LLC About Teekay LNG Partners Teekay LNG Partners L.P. is a publicly-traded master limited partnership 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 L.P. provides LNG, LPG and crude oil marine transportation services under long-term, fixed-rate time charter contracts with major energy and utility companies through its fleet of fifteen LNG carriers, six LPG carriers and eight Suezmax class crude oil tankers. Two of the fifteen LNG carriers are newbuildings scheduled for delivery to the Partnership in the first half of 2009. Four of the six LPG carriers are newbuildings scheduled for delivery in 2009 and 2010. 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 future growth prospects; Teekay Corporation offering its interest in the Angola LNG Project vessels to the Partnership; the certainty and timing of the Partnership’s purchase of the Tangguh LNG carriers from Teekay Corporation and the amount of cash flow the acquisition will generate for the Partnership; the timing of LNG and LPG newbuilding deliveries; the amount and timing of the refinancing of the Partnership’s existing debt facilities; and the likelihood of securing a commitment from lenders to finance five LPG newbuildings. 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: the unit price of equity offerings to finance acquisitions; the outcome of a ruling that the Partnership requested of the IRS with respect to an LPG carrier holding structure that the Partnership also intends to use to acquire and hold the carriers servicing the Tangguh LNG project; changes in production of LNG or LPG, either generally or in particular regions; required approvals by the conflicts committee of the board of directors of the Partnership’s general partner to acquire any LNG projects offered to the Partnership by Teekay Corporation; less than anticipated revenues or higher than anticipated costs or capital requirements; changes in trading patterns 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 and inability of the Partnership to renew or replace long-term contracts; LNG and LPG project delays, shipyard production delays; the Partnership’s ability to raise financing to purchase additional vessels or to pursue LNG or LPG projects; the securing of lenders’ internal approvals for the provision of financing on the Partnership’s five LPG newbuildings; changes to the amount or proportion of revenues, expenses, or debt service costs denominated in foreign currencies; and other factors discussed in Teekay LNG Partners’ filings from time to time with the SEC, including its Report on Form 20-F/A for the fiscal year ended December 31, 2007. The Partnership expressly disclaims any obligation 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.