Teekay Offshore Partners awarded new North Sea shuttle tanker contracts

Teekay Offshore Partners L.P. (Teekay Offshoreor the Partnership) (NYSE:TOO) announced today that it has been awarded new three-year shuttle tanker contracts of affreightment (CoA), plus extension options, with BP plc, Royal Dutch Shell and OMV Group, to transport the oil produced from the new Glen Lyon FPSO which is part of the Quad204 development located west of Shetland in the North Sea. The CoAs are expected to commence in the first half of 2017 with the requirement for approximately two shuttle tankers. The Partnership expects to service these new CoAs with its existing CoA shuttle tanker fleet.

“We are pleased to announce these new strategic shuttle tanker contracts, which further builds on the Partnership’s leading market position in the North Sea,” commented Peter Evensen, Teekay Offshore’s Chief Executive Officer. “These contracts further enhance our CoA contract portfolio and are expected to add future cash flow through higher shuttle tanker fleet utilization without the need for incremental capital expenditures. Looking ahead, the shuttle tanker market in the North Sea is expected to remain tight supported by a combination of more lifting points from new fields coming on-line and limited fleet growth with no uncommitted shuttle tanker newbuildings on order.”