Marine Log

June 12, 2006

Teekay plans shuttle and FSO spin off

The board of Teekay Shipping Corporation (NYSE:TK) has approved a plan to create a new publicly-traded master limited partnership called Teekay Offshore Partners L.P.

It will focus on providing marine solutions to the growing offshore energy sector.

It is anticipated that the partnership will initially acquire an interest in Teekay's existing shuttle tanker and floating storage & offtake (FSO) businesses, and certain other assets.

In addition, it is expected that the partnership will participate in Teekay's future investments in the floating production storage & offloading (FPSO) business.

Following the initial public offering, Teekay will own the partnership's general partner and a majority of the partnership's units.

"We have been evaluating strategic initiatives for our offshore services business particularly at a time when offshore oil exploration and production is expected to grow significantly," said Bjorn Moller, Teekay's President and CEO. "The creation of Teekay Offshore Partners is part of Teekay's strategy to accelerate its growth in the offshore energy sector and create additional value for Teekay's shareholders."

Teekay expects to file with the U.S. Securities and Exchange Commission a registration statement for the initial public offering of the common units of Teekay Offshore Partners L.P. during the second half of 2006. The securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective.