Teekay achieves Oslo Børs green bond listing

Source: press releases, 6 December 2019

The Teekay “E-Shuttle” tankers operate on both liquefied natural gas (LNG) as the primary fuel, and a mixture of LNG and recovered volatile organic compounds (VOCs) as secondary fuel (illustration: DNV GL/Wärtsilä/Teekay)
The Teekay “E-Shuttle” tankers operate on both liquefied natural gas (LNG) as the primary fuel, and a mixture of LNG and recovered volatile organic compounds (VOCs) as secondary fuel (illustration: DNV GL/Wärtsilä/Teekay)

At the beginning of 2015, Norway’s Oslo Børs was the first stock exchange to create a separate listing for green bonds in order to raise green investment awareness. Proceeds from green bond listing on the exchange are to be exclusively used to finance environmental projects.

Since 2015, Oslo Børs has also been a partner exchange in the UN Sustainable Stock Exchanges initiative (SSE), which encourages transparency and corporate responsibility in capital markets to support sustainable investment over the long term.

As loans to finance environmentally friendly projects, green bonds are subject to independent review and verification for each project prior to listing. These reviews can be performed by research organisations such as CICERO, certification companies such as DNV GL and audit firms such as KPMG. Moreover, the findings of these reviews are available to the public.

Oslo Børs reports that the green finance trend has shown strong growth, and currently, 33 green bonds are listed – with a combined value of NOK 33.6 billion – from a total of 22 issuers.

Green bonds – loans financing environmental projects (illustration: Oslo Børs)
Green bonds – loans financing environmental projects (illustration: Oslo Børs)

New listing
Oslo Børs has now announced that marine energy transportation, storage and production company Teekay has become the first from the shipping industry to list green bonds.

Teekay Shuttle Tankers’ new bond issue will partially fund four “E-Shuttle” newbuilds currently under construction. The four vessels will join Teekay Offshore’s Contract of Affreightment (CoA) fleet in the North Sea once delivered.

First announced in mid-year 2018, Teekay’s E-shuttle concept includes new technologies developed by Wärtsilä that are estimated, when compared to conventional tankers, to reduce emissions by up to 42% and fuel consumption by up to 22%.

Green power
The technology enables the vessels to operate both on liquefied natural gas (LNG) as the primary fuel, and a mixture of LNG and recovered volatile organic compounds (VOCs) as the secondary fuel.

According to last year’s announcement from Teekay, “VOCs are produced in a gaseous state from evaporation occurring in the oil cargo tanks. This new mixture enables our new shuttle tankers to travel from the oil fields on their own waste gas rather than releasing it into the atmosphere. This will reduce both emissions and bunkering requirements considerably. In fact, by reusing those VOCs as a fuel, the annual emissions can be reduced by 42%.”

Combined with an electric propulsion system, total mechanical power installed is reduced by 14%, which further increases fuel performance. Moreover, the hybrid system leads to lower maintenance time and cost.

In the initial announcement, Ingvild Sæther, President and CEO of Teekay Offshore Group Ltd., said, “This is another important milestone for Teekay Offshore’s shuttle tanker franchise since it further strengthens our position as the leading provider of shuttle tanker services in the North Sea. Our customers require a reliable, long-term solution for securing offtake services from over 15 oil fields in the North Sea and, therefore, these state-of-the-art newbuilds demonstrate our ongoing commitment to our customers. What makes me particularly proud is that these newbuilds will set new standards for both fuel consumption and CO2 emissions.”

Read more about how Wärtsilä’s technologies are applied in E Shuttle.

Visit the Oslo Børs website for additional details about the Teekay bond issue.