UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

Commission file number 1- 32479

TEEKAY LNG PARTNERS L.P.

(Exact name of Registrant as specified in its charter)

4th floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ     Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Yes o     No þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Yes o     No þ

 

 

		TEEKAY LNG PARTNERS L.P. 4th Floor, Belvedere Building, 69 Pitts Bay Road Hamilton, HM 08, Bermuda

EARNINGS RELEASE

TEEKAY LNG PARTNERS
REPORTS THIRD QUARTER RESULTS

Highlights

•

Generated distributable cash flow of $36.7 million in the third quarter of 2010, up from $29.2 million in the third quarter of 2009.

•

Declared cash distribution of $0.60 per unit for the third quarter of 2010.

•

Agreed to acquire 50 percent interest in two LNG carriers on long-term fixed-rate charters; transaction expected to be completed by mid-November 2010.

•

Agreed to sell one LPG carrier for $21.5 million which will result in a $4.3 million gain; transaction expected to be completed by mid-November 2010.

Hamilton, Bermuda, November 4, 2010 — Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP) today reported its results for the quarter ended September 30, 2010. During the third quarter of 2010, the Partnership generated distributable cash flow⁽¹⁾ of $36.7 million, compared to $29.2 million in the same quarter of the previous year. The increase primarily reflects the acquisition of two LNG carriers and one LPG carrier during the second half of 2009, as well as the acquisition of the two Suezmax oil tankers and one Handymax product tanker in March 2010, all of which are operating under long-term, fixed-rate charter contracts.

On October 25, 2010, the Partnership declared a cash distribution of $0.60 per unit for the quarter ended September 30, 2010. The cash distribution is payable on November 12, 2010 to all unitholders of record on November 5, 2010.

“The increase in the Partnership’s third quarter distributable cash flow compared to the same period one year ago highlights the steady growth in Teekay LNG’s portfolio of long-term fixed-rate contracts and reflects the addition of several vessels acquired from our sponsor, Teekay Corporation,” commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. “The Partnership’s acquisition of a 50 percent interest in two LNG carriers from Exmar will provide an additional $10 million of annual distributable cash flow and represents an attractive entry point into the complimentary floating LNG regasification business. Importantly, the Exmar transaction also demonstrates the Partnership’s ability to grow through direct third party acquisitions. In addition, with the delivery of gas projects currently being warehoused by Teekay Corporation in 2011 and 2012, including two Skaugen Multigas newbuildings and a one-third interest in four Angola LNG newbuildings, we expect further opportunities to grow the Partnership’s distributable cash flow going forward.”

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Teekay LNG’s Fleet

The following table summarizes the Partnership’s fleet as of November 3, 2010:

		Number of Vessels
		Delivered				Committed
		Vessels				Vessels				Total
LNG Carrier Fleet(1)			15				2	(2)			17
LPG/Multigas Carrier Fleet			3	(3)			3	(4)			6
Conventional Tanker Fleet			11				—				11
Total			29				5				34

Exmar Acquisition

The Partnership has agreed to acquire from Exmar NV (Exmar) a 50 percent interest in the 2002-built Excalibur, a conventional LNG carrier, and the 2005-built Excelsior, a specialized gas carrier which can both transport and regasify LNG onboard. Both vessels are on long-term, fixed-rate charter contracts to Excelerate Energy LP, a leading provider of LNG offshore solutions, for firm periods until 2022 and 2025, respectively. The purchase price of the 50 percent interest is $70 million net of assumed debt. The Partnership will finance the acquisition by issuing approximately 1.1 million of its common units to Exmar and borrowings under one of its existing revolving credit facilities. The transaction is expected to be completed by mid-November 2010.

Dania Sprit Sale

The Partnership has agreed to sell the 2000-built LPG carrier Dania Spirit for proceeds of $21.5 million, which will result in a gain of approximately $4.3 million. The transaction is expected to be completed by mid-November 2010.

Future Projects

Below is a summary of LNG and LPG/Multigas newbuildings that the Partnership has agreed to, or has the right to, acquire:

Skaugen LPG/Multigas

The Partnership has agreed to acquire one LPG carrier from a subsidiary of IM Skaugen ASA (Skaugen) and two Multigas carriers from Teekay Corporation (Teekay). The three LPG/Multigas carriers are currently under construction and will be purchased upon their scheduled deliveries from the shipyard in 2011. Upon delivery, the vessels will commence service under 15-year fixed-rate charters to Skaugen.

Angola LNG

A consortium in which Teekay has a one-third interest, has agreed to charter four newbuilding LNG carriers for a period of 20 years to the Angola LNG Project, which is being developed by subsidiaries of Chevron, Sonangol, BP, Total and ENI. The vessels will be chartered at fixed rates, with inflation adjustments, following their deliveries which are scheduled to commence in 2011. In accordance with an agreement between Teekay and Teekay LNG, Teekay is obligated to offer the Partnership its interest in these vessels and related charter contracts no later than 180 days before delivery of these newbuilding LNG carriers. The vessels are currently under construction and are expected to deliver in 2011 and 2012.

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Financial Summary

The Partnership reported adjusted net income attributable to the partners⁽¹⁾ (as detailed in Appendix A to this release) of $23.9 million for the quarter ended September 30, 2010, compared to $17.6 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items which had the net effect of decreasing net income by $63.9 million and $45.0 million for the three months ended September 30, 2010 and 2009, respectively, as detailed in Appendix A. Including these items, the Partnership reported net loss attributable to the partners, on a GAAP basis, of $40.0 million and $27.4 million for the three months ended September 30, 2010 and 2009, respectively.

For accounting purposes, the Partnership is required to recognize the changes in the fair value of its derivative instruments on the statements of (loss) income. This method of accounting does not affect the Partnership’s cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized gains or losses on the statements of (loss) income.

The Partnership’s financial statements for the prior periods include historical results of vessels acquired by the Partnership from Teekay, referred to herein as the Dropdown Predecessor, for the period when these vessels were owned and operated by Teekay.

Operating Results

The following table highlights certain financial information for Teekay LNG’s segments: the Liquefied Gas Segment and the Conventional Tanker Segment (please refer to the “Teekay LNG’s Fleet” section of this release above and Appendix C for further details).

		Three Months Ended												Three Months Ended
		September 30, 2010												September 30, 2009
		(unaudited)												(unaudited)
		Liquefied				Conventional								Liquefied				Conventional
		Gas				Tanker								Gas				Tanker
(in thousands of U.S. dollars)		Segment				Segment				Total				Segment				Segment(i)				Total
Net voyage revenues(ii)			66,613				24,818				91,431				63,285				24,349				87,634
Vessel operating expenses			11,422				9,541				20,963				12,760				7,630				20,390
Depreciation and amortization			15,149				6,977				22,126				13,989				6,571				20,560
Cash flow from vessel operations(iii)			53,677				12,946				66,623				44,735				9,193				53,928

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Liquefied Gas Segment

Cash flow from vessel operations from the Partnership’s Liquefied Gas segment increased to $53.7 million in the third quarter of 2010 from $44.7 million in the same quarter of the prior year. This increase is primarily due the acquisition of the Tangguh LNG carriers in August 2009, the delivery of the second Skaugen LPG carrier in November 2009, a decrease in vessel operating expenses and fewer off-hire days in the third quarter of 2010 relating to scheduled drydockings.

Conventional Tanker Segment

Cash flow from vessel operations from the Partnership’s Conventional Tanker segment was $12.9 million for the third quarter of 2010 compared to $9.2 million in the same quarter of the prior year. The increase is primarily due to the acquisition of two Suezmax tankers and one Handymax tanker from Teekay in the first quarter of 2010. This increase was partially offset by an increase in the number of scheduled drydocking days in the third quarter of 2010.

Liquidity

As of September 30, 2010, the Partnership had total liquidity of $487.2 million, comprised of $73.1 million in cash and cash equivalents and $414.1 million in undrawn credit facilities.

About Teekay LNG Partners L.P.

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 17 LNG carriers, six LPG/Multigas carriers and 11 conventional tankers. Two of the 17 LNG carriers are expected to be acquired in mid-November 2010 and three of the six LPG/Multigas carriers are newbuildings scheduled for delivery in 2011.

Teekay LNG Partners’ common units trade on the New York Stock Exchange under the symbol “TGP”.

For Investor Relations enquiries contact:
Kent Alekson
Tel: +1 (604) 609-6442

Web site: www.teekaylng.com

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TEEKAY LNG PARTNERS L.P.

SUMMARY CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(in thousands of U.S. dollars, except unit data)

		Three Months Ended												Nine Month Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
		2010				2010				2009(1)				2010(1)				2009(1)
		(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)
VOYAGE REVENUES			92,154				91,846				88,389				276,492				247,231
OPERATING EXPENSES
Voyage expenses			723				493				755				1,357				1,495
Vessel operating expenses			20,963				22,041				20,390				64,032				57,604
Depreciation and amortization			22,126				22,407				20,560				66,689				60,392
General and administrative			5,252				5,037				5,637				15,681				13,347
Restructuring charge(2)			—				126				393				175				3,053
			49,064				50,104				47,735				147,934				135,891
Income from vessel operations			43,090				41,742				40,654				128,558				111,340
OTHER ITEMS
Interest expense			(12,708	)			(11,320	)			(13,872	)			(36,802	)			(47,200	)
Interest income			2,083				1,429				3,376				5,385				10,858
Realized and unrealized loss on derivative instruments(3)			(33,423	)			(45,549	)			(33,882	)			(105,784	)			(41,476	)
Foreign exchange (loss) gain(4)			(39,839	)			36,635				(17,576	)			20,017				(19,527	)
Equity (loss) income(5)			(870	)			(2,930	)			(781	)			(2,483	)			20,353
Other income (expense) — net			26				(116	)			61				380				239
Net (loss) income			(41,641	)			19,891				(22,020	)			9,271				34,587
Net (loss) income attributable to:
Non-controlling interest			(1,665	)			(2,875	)			2,785				(4,239	)			25,398
Dropdown Predecessor			—				—				2,638				2,258				3,117
Partners			(39,976	)			22,766				(27,443	)			11,252				6,072
Limited partners’ units outstanding:
Weighted-average number of common units outstanding - Basic and diluted			53,755,351				52,339,849				41,021,963				50,388,092				37,855,872
Weighted-average number of subordinated units outstanding - Basic and diluted			—				—				7,367,286				2,428,776				9,229,347
Weighted-average number of total units outstanding - Basic and diluted			53,755,351				52,339,849				48,389,249				52,816,868				47,085,219
Total number of units outstanding			54,053,351				52,339,849				48,389,249				54,053,351				48,389,249

		Three Months Ended												Nine Month Ended
		September 30,				June 30,				September 30,				September 30,				September 30,
		2010				2010				2009				2010				2009
Realized losses relating to:
Interest rate swaps			(10,306	)			(10,581	)			(10,491	)			(32,101	)			(25,128	)
			(10,306	)			(10,581	)			(10,491	)			(32,101	)			(25,128	)
Unrealized (losses) gains relating to:
Interest rate swaps			(23,917	)			(32,868	)			(24,491	)			(72,183	)			(23,103	)
Toledo Spirit time-charter derivative contract			800				(2,100	)			1,100				(1,500	)			6,755
			(23,117	)			(34,968	)			(23,391	)			(73,683	)			(16,348	)
Total realized and unrealized losses on derivative instruments			(33,423	)			(45,549	)			(33,882	)			(105,784	)			(41,476	)

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TEEKAY LNG PARTNERS L.P.

SUMMARY CONSOLIDATED BALANCE SHEETS ⁽¹⁾

(in thousands of U.S. dollars)

		As at September 30,				As at June 30,				As at December 31,
		2010				2010				2009(2)
		(unaudited)				(unaudited)				(unaudited)
ASSETS
Cash and cash equivalents			73,085				70,999				108,350
Restricted cash — current			35,231				30,304				32,427
Other current assets			27,210				23,527				19,136
Advances to affiliates and to joint venture			5,702				6,026				22,361
Restricted cash — long-term			574,107				564,115				579,093
Vessels and equipment			1,976,290				1,989,093				2,020,174
Advances on newbuilding contracts			60,277				59,268				57,430
Net investments in direct financing leases			417,246				418,775				421,441
Derivative assets			120,462				90,958				32,131
Investment in joint venture			88,930				89,888				91,674
Other assets			24,231				23,987				25,888
Intangible assets			125,828				128,110				132,675
Goodwill			35,631				35,631				35,631
Total Assets			3,564,230				3,530,681				3,578,411
LIABILITIES AND EQUITY
Accounts payable, accrued liabilities and unearned revenue			61,131				60,079				62,124
Current portion of long-term debt and capital leases			122,040				115,233				118,414
Advances from affiliates and joint venture partners			106,037				106,410				105,559
Long-term debt and capital leases			2,051,130				2,051,706				2,140,941
Derivative liabilities			296,021				243,401				134,007
Other long-term liabilities			99,629				100,156				100,328
Equity
Dropdown Predecessor equity(2)			—				—				43,013
Non-controlling interest(3)			9,568				11,233				13,807
Partners’ equity			818,674				842,463				860,218
Total Liabilities and Total Equity			3,564,230				3,530,681				3,578,411

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TEEKAY LNG PARTNERS L.P.

(in thousands of U.S. dollars)

		Nine Months Ended September 30,
		2010(1)				2009(1)
		(unaudited)				(unaudited)
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
Net operating cash flow			127,939				140,501
FINANCING ACTIVITIES
Distribution to Teekay Corporation for the acquisition of the Alexander Spirit, Hamilton Spirit and Bermuda Spirit			(33,997	)			—
Proceeds from issuance of long-term debt			39,231				162,826
Scheduled repayments of long-term debt			(56,415	)			(61,541	)
Prepayments of long term debt			(42,000	)			(95,900	)
Scheduled repayments of capital lease obligations and other long-term liabilities			(7,288	)			(7,092	)
Proceeds from equity offerings, net of offering costs			50,921				68,532
Advances (to) from affiliates			(2,549	)			14,360
Repayment of joint venture partners’ advances			(1,250	)			—
Equity contribution from Teekay Corporation to Dropdown Predecessor			466				720
Decrease in restricted cash			449				1,390
Cash distributions paid			(100,053	)			(85,196	)
Excess of purchase price over the contributed basis of Teekay Tangguh Borrower LLC			—				(31,830	)
Other			(131	)			—
Net financing cash flow			(152,616	)			(33,731	)
INVESTING ACTIVITIES
Expenditures for vessels and equipment			(7,883	)			(96,000	)
Receipts from direct financing leases			4,195				2,945
Purchase of Teekay Tangguh Borrower LLC			—				(37,259	)
Advances to joint venture partner and to joint venture			(6,900	)			(2,610	)
Net investing cash flow			(10,588	)			(132,924	)
Decrease in cash and cash equivalents			(35,265	)			(26,154	)
Cash and cash equivalents, beginning of the period			108,350				117,641
Cash and cash equivalents, end of the period			73,085				91,487

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TEEKAY LNG PARTNERS L.P.
APPENDIX A — SPECIFIC ITEMS AFFECTING NET LOSS
(in thousands of U.S. dollars, except per share data)

Set forth below is a reconciliation of the Partnership’s unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net loss attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership’s financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership’s financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.

		Three Months Ended				Three Months Ended
		September 30, 2010				September 30, 2009
		(unaudited)				(unaudited)
Net loss — GAAP basis			(41,641	)			(22,020	)
Less:
Net loss (income) attributable to non-controlling interest			1,665				(2,785	)
Net (income) attributable to Dropdown Predecessor			—				(2,638	)
Net loss attributable to the partners			(39,976	)			(27,443	)
Add (subtract) specific items affecting net income:
Foreign exchange loss(1)			39,839				17,559
Unrealized losses from derivative instruments(2)			23,117				23,391
Unrealized losses from derivative instruments from equity accounted investees(2)			4,319				3,988
Restructuring charge(3)			—				393
Additional crew training charges received relating to prior periods			364				—
Non-controlling interests’ share of items above			(3,716	)			(311	)
Total adjustments			63,923				45,020
Adjusted net income attributable to the partners			23,947				17,577

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TEEKAY LNG PARTNERS L.P.
APPENDIX B — RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)

Description of Non-GAAP Financial Measure — Distributable Cash Flow (DCF)

Distributable cash flow represents net (loss) income adjusted for depreciation and amortization expense, non-cash items, estimated maintenance capital expenditures, gains and losses on vessel sales, unrealized gains and losses from derivatives, income from variable interest entity, income taxes, foreign exchange related items and net income attributable to the Dropdown Predecessor before depreciation. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, the Partnership’s capital assets. Distributable cash flow is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership’s ability to make quarterly cash distributions. Distributable cash flow is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net (loss) income or any other indicator of the Partnership’s performance required by accounting principles generally accepted in the United States. The table below reconciles distributable cash flow to net loss.

		Three Months Ended
		September 30, 2010
		(unaudited)
Net loss			(41,641	)
Add:
Depreciation and amortization			22,126
Partnership’s share of RasGas 3 DCF before estimated maintenance capital expenditures			4,763
Unrealized loss from derivatives and other non-cash items			24,808
Equity loss from RasGas 3 joint venture			870
Income tax expense			110
Unrealized foreign exchange loss			39,839
Less:
Estimated maintenance capital expenditures			(10,624	)
Distributable Cash Flow before Non-controlling interest			40,251
Non-controlling interests’ share of DCF before estimated maintenance capital expenditures			(3,570	)
Distributable Cash Flow			36,681

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TEEKAY LNG PARTNERS L.P.
APPENDIX C — SUPPLEMENTAL SEGMENT INFORMATION
(in thousands of U.S. dollars)

		Three Months Ended September 30, 2010
		(unaudited)
		Liquefied Gas				Conventional Tanker
		Segment				Segment				Total
Net voyage revenues(1)			66,613				24,818				91,431
Vessel operating expenses			11,422				9,541				20,963
Depreciation and amortization			15,149				6,977				22,126
General and administrative			2,921				2,331				5,252
Income from vessel operations			37,121				5,969				43,090

		Three Months Ended September 30, 2009
		(unaudited)
		Liquefied Gas				Conventional Tanker
		Segment				Segment(2)				Total
Net voyage revenues(1)			63,285				24,349				87,634
Vessel operating expenses			12,760				7,630				20,390
Depreciation and amortization			13,989				6,571				20,560
General and administrative			3,118				2,519				5,637
Restructuring charge			175				218				393
Income from vessel operations			33,243				7,411				40,654

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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 opportunities; the expected completion date for the Partnership’s acquisition of the 50 percent interest in the vessels Excalibur and Excelsior, and the amount of incremental distributable cash flow to the Partnership based on their respective fixed-rate time-charter contracts; the expected timing of the Partnership’s sale of the Dania Spirit and its resulting gain on the sale; the expected timing and certainty of Teekay Corporation offering its interest in the Angola LNG Project vessels to the Partnership; the timing of LNG and LPG/Multigas newbuilding deliveries and incremental cash flows relating to such newbuildings; the Partnership’s financial position, including available liquidity; and further opportunities to grow the Partnership’s distributable cash flow going forward. 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; 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 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/Multigas project delays or shipyard production delays which would change the expected timing and cost of newbuild vessel deliveries; the Partnership’s ability to raise financing to purchase additional vessels or to pursue LNG or LPG/Multigas projects; 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 for the fiscal year ended December 31, 2009. 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.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.