Teekay to Create Teekay Offshore Partners for Offshore Energy Work

Teekay Shipping announced that its Board of Directors has approved a plan to create a new publicly-traded master limited partnership called Teekay Offshore Partners L.P. that will focus on providing marine solutions to the growing offshore energy sector.

Teekay expects that the partnership will be comprised of assets that generate stable, long-term cash flows. 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 Chief Executive Officer. "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.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Teekay

Teekay Shipping Corporation transports more than 10 percent of the world's seaborne oil and has expanded into the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. With a fleet of 140 tankers, offices in 17 countries and 5,100 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world's leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay's reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.