Teekay Corporation and Teekay Offshore Partners L.P. (Teekay Offshore) say they have agreed to enter into a strategic partnership with Brookfield Business Partners L.P. , together with its institutional partners (collectively Brookfield). This transaction is part of a comprehensive solution for Teekay Offshore, which includes two LNG-fuelled shuttle tanker newbuildings ordered by Teekay Offshore.
“Teekay Offshore has established itself as a global leader in the provision of marine services to the offshore oil production industry,” said Cyrus Madon, CEO of Brookfield Business Partners. “Our investment represents an opportunity to acquire a high quality, highly contracted business with presence in attractive markets, and we look forward to supporting Teekay Offshore with its continued growth.”
As part of the arrangements, Teekay Offshore will transfer its shuttle tanker business into a new, wholly-owned, non-recourse subsidiary, Teekay Shuttle Tankers LLC (ShuttleCo).
In addition to the formation of ShuttleCo, Teekay Offshore has entered into conditional shipbuilding contracts with Samsung Heavy Industries Co., Ltd. to construct two Suezmax-size, DP2 shuttle tanker newbuildings, with options to order up to two additional vessels. These newbuilding vessels will be constructed based on the Partnership’s New Shuttle Spirit design which incorporates proven technologies to increase fuel efficiency and reduce emissions, including Liquefied natural gas (LNG) propulsion technology.
Upon delivery in 2019 and 2020, these new vessels will provide shuttle tanker services in the North Sea under the Partnership’s existing Master Agreement with Statoil ASA (Statoil), which will free up required vessel capacity to service Teekay Offshore’s contract of affreightment (CoA) portfolio in the North Sea.
The strategic partnership with Brookfield, and related transactions, has been approved by the Board of Directors of Teekay, TOO GP, and Brookfield. Closing of the transactions, which remains subject to customary conditions, including, among others, regulatory approvals, is expected to occur in the third quarter of 2017.
About Teekay Offshore
Teekay Offshore Partners L.P. is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the oil industry, primarily focusing on oil production-related activities of its customers and operating in offshore oil regions of the North Sea, Brazil and the East Coast of Canada.