Teekay upgrading several LNG carriers to improve performance

Teekay LNG will invest about $60 million to install reliquefaction systems on several vessels in order to improve performance.

These systems liquefy boil-off gas (BOG) and return it to LNG cargo tanks.

The Bermuda-based shipping firm currently has 47 LNG carriers in its fleet and will install this equipment on some of the vessels during this and the next year.

Teekay Gas chief executive Mark Kremin told analysts on Thursday during the firm’s first-quarter conference call that the upgrade program had just started.

“While we’re doing scheduled dry dockings, we are upgrading some of our ships,” he said.

“The first one is the Murex, which is in dry-docking right now. We are improving the reliquefaction (system) on some of our vessels, and this will occur, both this year and next year on the scheduled dry-docking dates,” he said.

The 2017-built 178,000-cbm LNG carrier Murex is on a long-term charter to Shell. The vessels’ AIS data shows it was on Friday located at Sembcorp Marine’s yard in Singapore.

Teekay Gas finance chief Scott Gayton said during the call the firm expects “roughly $60 million” for the capex upgrades on these vessels.

“And importantly, from the shipyard, we actually did receive a warranty payment of around $45 million. So it’s about a $15 million net to us, and we recognize and receive that $45 million like a year, year and a half ago, and just gone through those capex upgrades now,” he said.

Following the completion of the upgrade, Teekay expects these ships to be some of the “most efficient” in the fleet, Gayton said.

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