SEAL-PA

Business Context and Reporting Period

Company: Teekay LNG Partners L.P. (NYSE: TGP)

Filing Type: Form 6-K (Report of Foreign Private Issuer)

Report Date: July 23, 2009

Reporting Period: First Quarter ended March 31, 2009 (Q1 2009)

Teekay LNG Partners L.P. is a master limited partnership providing LNG, LPG, and crude oil marine transportation services under long-term, fixed-rate time-charter contracts. The filing announces Q1 2009 results and declares a cash distribution for the second quarter of 2009.

Key Financial Metrics

Segment Performance (Cash Flow from Vessel Operations):

• Liquefied Gas Segment: $40.0 million (Q1 2009) vs. $35.1 million (Q1 2008).
• Suezmax Tanker Segment: $9.2 million (Q1 2009) vs. $11.3 million (Q1 2008).

Material Changes vs. Prior Period

• Distributable Cash Flow Increase: Increased 26% year-over-year to $27.6 million, primarily driven by the acquisition of two Kenai LNG carriers and four RasGas 3 LNG carriers in late 2008.
• GAAP Net Income Volatility: GAAP net income swung from a $43.1 million loss in Q1 2008 to a $22.0 million profit in Q1 2009. This variance is largely due to non-cash accounting items, specifically a $20.4 million foreign exchange gain in 2009 compared to a $33.9 million loss in 2008, and unrealized losses on derivative instruments.
• Segment Shifts: The Liquefied Gas segment saw increased cash flow due to new vessel acquisitions and the absence of unscheduled offhires that impacted the prior year. The Suezmax segment declined due to restructuring costs and lower revenue linked to decreased LIBOR rates affecting time-charter contracts.

Guidance, Outlook, and Management Commentary

Management Commentary: CEO Peter Evensen stated that Q1 2009 results were in-line with expectations. He highlighted the stability of distributable cash flows supported by a diversified portfolio of fixed-rate long-term contracts, strong liquidity, and a fully-financed newbuilding program. Management expects committed newbuildings through 2011 to provide incremental cash flow to support future distribution increases.

Distribution: Declared a cash distribution of $0.57 per unit for Q2 2009 (unchanged from Q1), payable August 14, 2009.

Future Projects and Fleet Expansion:

• Tangguh LNG: Agreed to acquire 70% interest in two newbuilding LNG carriers (expected Q3 2009) under 20-year fixed-rate charters.
• Skaugen LPG: First of five vessels delivered in April 2009; four remain under construction for delivery in 2009-2010 under 15-year charters.
• Angola LNG: 33% interest in four newbuilding LNG carriers scheduled for delivery commencing in 2011 under 20-year charters.

Risks and Contingencies: Forward-looking statements are subject to risks including project delays, shipyard production delays, changes in LNG/LPG production, early termination of contracts, and the ability to raise financing. The filing notes that unrealized gains/losses on derivatives and foreign currency revaluations affect GAAP income but do not impact cash flows.

Investor Verification Checklist

• Non-GAAP Reconciliations: Verify the reconciliation of Distributable Cash Flow and Adjusted Net Income to GAAP measures in Appendices A and B to understand the impact of non-cash items (derivatives, FX).
• Liquidity Composition: Confirm the availability of the $44.7 million portion of cash restricted for the Tangguh joint venture versus general corporate liquidity.
• Derivative Exposure: Review the specific terms of interest rate swaps and time-charter derivatives causing the $16.2 million unrealized loss in Q1 2009.
• Acquisition Timelines: Monitor the completion of the Tangguh LNG carrier acquisition (expected Q3 2009) and the delivery schedule for the remaining Skaugen LPG vessels.
• Restructuring Costs: Track the remaining $1.0 million of restructuring costs expected to be incurred in the remainder of 2009.