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Teekay: The Marine Midstream Company Teekay: The Marine Teekay: The Marine Midstream Company Midstream Company

June 2004 June 2004

NYSE: TK

Teekay Shipping Corporation: The Marine Midstream Company 2

Forward Looking Statements Forward Looking Statements

This document 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 Teekay’s growth prospects and strategy; tanker market fundamentals, including the balance of supply and demand in the tanker market, and spot tanker charter rates; applicable industry regulations and their effect on the size of the world tanker fleet; anticipated annualized cash flow from vessel operations from the Company’s fixed-rate segment; newbuilding delivery dates, and the commencement

• f service under long-term contracts; the valuation of the Company; the impact of the

Tapias acquisition on Teekay’s future cash flow from vessel operations and strategic

• position. 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: changes in production of or demand for oil, petroleum products, and LNG either generally or in particular regions; greater or less than anticipated levels of tanker newbuilding orders or greater or less than anticipated rates of tanker scrapping; changes in trading patterns significantly impacting overall tanker tonnage requirements; the rate of growth of the long-term fixed-rate contract segment of our business; potential inability of Teekay to integrate Tapias successfully; the potential for early termination of long-term contracts and inability of the Company to renew or replace long-term contracts; shipyard production delays; changes in the typical seasonal variations in tanker charter rates; changes in the offshore production of oil; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the year ended December 31, 2003.

Teekay Shipping Corporation: The Marine Midstream Company 3

Index Index

• 1. Introduction
• 2. Valuation and Financial Strategy
• 3. Spot Segment
• 4. Fixed-rate Segment
• 5. Marine Midstream Company
• 6. Appendix

Teekay Shipping Corporation: The Marine Midstream Company 4

This is Teekay This is Teekay

The world’s largest tanker company, measured by market capitalization and fleet size Transporter of more than 10% of the world’s seaborne crude

• il

Leading industry consolidator with a track record of accretive acquisitions Large, growing fixed-rate contract portfolio Recently entered high growth LNG shipping sector

Teekay Shipping Corporation: The Marine Midstream Company 5

Key Points About Teekay Key Points About Teekay

Teekay is in an excellent position to continue its profitable growth

We have created a unique platform

Built a position as the only true Marine Midstream Company serving our customers in the oil and gas industry

Our growth has been highly profitable

Disciplined and well timed growth

We are positioned to capitalize on our platform

Industry dynamics play into the strength of our franchise and we are ready for the future

Teekay Shipping Corporation: The Marine Midstream Company 6

Valuation of Teekay’s Segments Valuation of Teekay’s Segments

Fixed-rate segment valued using cash flow multiple similar to other yield-

• riented vehicles (i.e. MLPs)

Similarities:

Long-term stable cash flows Higher leverage acceptable as

cash flow more secure

Engaged in energy

transportation Multiple:

MLPs presently trading at avg.

EV / EBITDA multiple of 12x

examples: Kinder Morgan=13x Sunoco=9.5x Buckeye = 12.3x

Spot segment valued using multiple of book value Conservatively using avg.

• f peer group, however:

Gives no premium to value

• f in-chartered fleet

Gives no premium for

position as world’s largest

• wner and operator of

medium-sized tankers

Gives no premium for

customer relationships

Gives no premium for spot

earnings in excess of peers

Gives no premium for ‘in

the money’ portion of newbuildings => $170 m LNG segment valued using cash flow multiple of comparable companies

Growth premium implied in

multiple given rate of growth expected in industry

Higher multiple justified: Less risky nature of

cash flow i.e. ‘bond like’

Long-term nature of

contracts

Investment grade

charterers

Higher growth

potential

Teekay Shipping Corporation: The Marine Midstream Company 7

Teekay Minimum Valuation Metric Teekay Minimum Valuation Metric

In millions (except per share data) Balance Sheet and outstanding share data as at March 31, 2004 (adj. for Tapias and PEPS conversion) Fixed-rate segment CFVO * 315 LNG fixed-rate CFVO 80 Book value of spot fleet + JVs 1,294 Multiple ** x 10 Multiple **** x 12 Multiple *** x 1.6 Total fixed-rate segment enterprise value 3,150 Total LNG segment enterprise value 960 Total spot-rate adjusted book value 2,070 less: pro rata share of net debt (1,410) less: pro rata share of net debt (519) less: pro rata share of net debt (834) Equity value of fixed-rate segment 1,740 Equity value of LNG segment 441 Equity value of spot segment 1,237 Fully diluted number of shares 86.6 Fully diluted number of shares 86.6 Fully diluted number of shares 86.6

* Commencing Q4-2004 annualized ** Based on inherent MLP multiples

Market Value - TORM shares 140 *** Based on avg. of peers V.O.C. Equipment 81

**** Based on avg. multiple of LNG co.'s

Equity value of other items 221 Fully diluted number of shares 86.6 5.10 $

Combined Teekay Equity Value per Share 42.03 $

Other asset equity value / share 2.55 $ OTHER COMPANY ASSETS FIXED-RATE SEGMENT SPOT SEGMENT LNG SEGMENT Fixed-rate segment equity value / share 20.09 $ Spot segment equity value / share 14.29 $ LNG segment equity value / share

Teekay Shipping Corporation: The Marine Midstream Company 8

Share Value Matrix Share Value Matrix

35.50

1.1x 1.2x 1.3x 1.4x 1.5x 1.6x 1.7x 1.8x 1.9x 9 30.91 32.40 33.90 35.39 36.89 38.38 39.87 41.37 42.86 10 34.55 36.04 37.53 39.03 40.52 42.03 43.51 45.01 46.50 11 38.18 39.68 41.17 42.67 44.16 45.65 47.15 48.64 50.14 Stock Price Matrix * Fixed Rate Segment CFVO Multiple Multiple of Spot Book Value

Value Gap of ~18% or $6.53 per share

* Assumes LNG multiple held constant at 12x CFVO

Teekay Shipping Corporation: The Marine Midstream Company 9

P/E Multiple Comparisons P/E Multiple Comparisons

2004 Sector Price to Earnings at May 2004

x 5x 10x 15x 20x 25x 30x 35x

Offshore Drilling Offshore Transportation Services Large Diversified Onshore Drilling Production and Well Services Average Oil Service Equipment Manufacturers Offshore Construction Geophysical Services Maritime Group Teekay

During early 1998, a period of record earnings for the sector, the average P/E was 12x

Source: Jefferies Consolidated Oil Service Monthly – May 2004

Teekay Shipping Corporation: The Marine Midstream Company 10

P/Cflow Multiple Comparisons P/Cflow Multiple Comparisons

Source: Jefferies Consolidated Oil Service Monthly – May 2004

2004 Sector Price to Cashflow at May 2004

x 2x 4x 6x 8x 10x 12x 14x 16x 18x

Large Diversified Offshore Drilling Oil Service Equipment Manufacturers Offshore Transportation Services Average Onshore Drilling Production and Well Services Geophysical Services Offshore Construction Maritime Group Teekay

Teekay Shipping Corporation: The Marine Midstream Company 11

Complementary Businesses Create Complementary Businesses Create Cash Floor with No Ceiling Cash Floor with No Ceiling

100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Low-cycle ($13,000/day) Mid-cycle ($19,000/day) High-cycle ($27,500/day) Super-cycle ($40,000/day)

($) millions

Fixed-rate CFVO Spot-based CFVO

* Proforma 2004 CFVO annualized. CFVO = Cash Flow from Vessel Operations (income from vessel operations + depreciation expense)

Proforma 2004 EPS $0.27 $2.26 $5.09

*

$9.24

Floor

Teekay Shipping Corporation: The Marine Midstream Company 12

Financial Strategy for Cash Generated Financial Strategy for Cash Generated

• 1. Delever the Balance Sheet
• Net debt to capitalization

expected to rise to approx. 48% with inclusion of Tapias debt

• Over $500 million in newbuild

commitments for 2004 and 2005, $190 million still unfinanced

• 2. Fund profitable growth
• Maintain sufficient liquidity to take

advantage of growth

• pportunities
• Acquisitions and organic growth
• Historically, good stewards of

capital

• 3. Return Cash to Shareholders
• Stock buy-backs
• Dividend increases
• Recently increased dividend 16% to

$0.50 per share (stock-split adjusted)

Teekay Shipping Corporation: The Marine Midstream Company 13

Financial Strength and Flexibility Financial Strength and Flexibility

3/31/2004

Pro Forma for Tapias acquisition ($ millions)

at Mar. 31, 2004 ($ millions)

Cash 304 Total Revolving Credit Facilities Debt 2,350 Undrawn Revolving Net Debt 2,046 Credit Facilities Shareholders Equity 1,921 Cash 304 Total Capitalization 3,967 Total cash and undrawn lines 786 Secured Unsecured Net Debt / CFVO 1.4 3.1 2.3 2.3 Moody's Ba1 Ba2 Net Debt to Cap. 34% 37% 40% 48% S&P BB+ BB-

Liquidity Credit Ratings

872 482 2001 2002 2003

Strong Balance Sheet

Q1 2004 *

**

* Adjusted for Tapias acquisition **Last Twelve Months

Teekay Shipping Corporation: The Marine Midstream Company 14

Disciplined Growth Strategy Disciplined Growth Strategy

Spot

Medium-Term Long-Term

Conventional Conventional Liquefied Natural Tankers Tankers Gas Carriers Shuttle Tankers Offshore Installations Target Leverage 0-40% up to 75% up to 90% Range counter- cyclical

Fixed-Rate

Typical Shipping Assets Critical Investment Criteria mid-cycle IRR > WACC and accretive to earnings IRR > WACC accretive to earnings ROE 15% to 25%

15

Actively Managing the Cycle Actively Managing the Cycle

$10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000

1998 1999 2000 2001 2002 2003 2004 Realized Aframax TCE

Acquired Navion L/T Contracts Acquired UNS L/T Contracts Raised Flexible Financing Reduced Debt Ordered Newbuildings Acquired Bona Ordered Newbuildings Acquired Navion – Spot Exposure ConocoPhillips L/T Contracts Reduced Debt Ordered Newbuildings Acquired Tapias L/T Contracts Adding Spot Exposure Adding Fixed- rate business Strengthening Balance Sheet Non-recourse Financing Increased Charter-in Activity

Teekay Shipping Corporation: The Marine Midstream Company 16

Teekay’s Spot Tanker Teekay’s Spot Tanker Fleet Doubled in 5 Years Fleet Doubled in 5 Years

1998

16% CAGR

98 Spot-rate Vessels 46 Spot-rate Vessels

TODAY

Including N/Bs and in-chartered vessels

Teekay Shipping Corporation: The Marine Midstream Company 17

Spot Segment: Results to Date Spot Segment: Results to Date

Transformed from a regional operator to the only real global mid-size tanker operator Built a strategic contract portfolio in the conventional market with strong customer relationships Leading consolidator in a fragmented industry Increasingly chartering-in ships to cover growing contract requirements Used the cycle to our benefit – through a series

• f accretive acquisitions we have broadened our

service offerings and increased our profitability by increasing our operating leverage

Teekay Shipping Corporation: The Marine Midstream Company 18

Significant Operating Leverage Significant Operating Leverage

$- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $10,000 $14,000 $18,000 $22,000 $26,000 $30,000 $34,000 $38,000 Aframax Rates ($ per day) Earnings Per Share

FY 1998 2004

Growing

• perating

leverage

2004: Spot Rate increase $1,000 TCE/day above $13,000 / day

EPS Increase ~ $0.325 - $0.35

Declining net income break-even

Teekay Shipping Corporation: The Marine Midstream Company 19

Teekay’s Aframax Fleet Teekay’s Aframax Fleet Outperforms Its Peers Outperforms Its Peers

Aframax

$10,000 $14,000 $18,000 $22,000 $26,000 $30,000 $34,000 $38,000 $42,000 $46,000 $50,000 3q03 4q03 1q04 TCE (usd per day) TK Worldwide Clarksons Genmar Worldwide TK DH Atlantic OSG DH Atlantic

Worldwide Atlantic

With ROIC >50% for Q1 2004, Teekay’s spot fleet outperformed all peers

Teekay Shipping Corporation: The Marine Midstream Company 20

Strong Tanker Market Strong Tanker Market -

• Q1 2004

Q1 2004

Surge in Chinese oil demand – up 1.0 mb/d vs. 1q03 Increased oil supplies from long haul sources - global oil production up 0.4 mb/d (0.3 mb/d from OPEC) over 4q03 FSU output up 0.1 mb/d over 4q03 but 0.9 mb/d over 1q03 = above average increase in Aframax demand Iraqi exports routed out of Arabian Gulf = increased tanker tonne mile demand Short Term Factors:

Delays in the Bosphorus Middle East volatility Low oil stocks

Increase in tanker demand outweighed fleet additions

Teekay Shipping Corporation: The Marine Midstream Company 21

Tanker Spot Rates Tanker Spot Rates

20,000 40,000 60,000 80,000 100,000 1q99 1q00 1q01 1q02 1q03 1q04

Source: CRS

US$ per Day Aframax Suezmax VLCC

Teekay Shipping Corporation: The Marine Midstream Company 22

OPEC Declares War On Seasonality OPEC Declares War On Seasonality

• Demand decline in 2q04 not as steep as in 2q03
• High oil prices - May WTI > $40/barrel. Oil price easing

in early June as key Middle East producers increase production

• Volatility in the Persian Gulf
• Iraq
• Strong demand
• Speculators
• OPEC raises quotas by 2.0 mb/d effective June 01,

2004 with a further 0.5 mb/d increase scheduled for August 1, 2004

• Saudi Arabia and UAE announce approximately 1.1

mb/d of extra oil supplies in June regardless of quota restrictions in order to quell rising oil prices

• OPEC scheduled to meet again on July 21, 2004
• Expected increase in production in 3Q to meet strong oil

demand

Teekay Shipping Corporation: The Marine Midstream Company 23

OPEC Quotas vs. Production OPEC Quotas vs. Production

20.0 22.0 24.0 26.0 28.0 1q99 2q99 3q99 4q99 1q00 2q00 3q00 4q00 1q01 2q01 3q01 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04

Source : IEA

million Bbls/day Quota OPEC-10 prod.

Teekay Shipping Corporation: The Marine Midstream Company 24

OPEC Crude Output OPEC Crude Output

• vs. Aframax TCE
• vs. Aframax TCE

23.0 24.0 25.0 26.0 27.0 28.0 29.0 1q99 2q99 3q99 4q99 1q00 2q00 3q00 4q00 1q01 2q01 3q01 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04E

Source : IEA/CRS

Million Bbls/Day 10,000 20,000 30,000 40,000 50,000 60,000 US$/Day OPEC crude prod. Aframax Average

Teekay Shipping Corporation: The Marine Midstream Company 25

Tanker Demand for 2004 Tanker Demand for 2004

• OIL DEMAND
• Global oil demand growth forecast to grow by 2.9% in

2004; the highest in 23 years. This translates into over 5% growth in Tanker Demand

• Oil demand growth led by strong economic growth in

Asia (China) and US

• Increased ME Gulf production and Asian demand for

sweet West African Crude imports provides further support to tanker tonne mile demand

• UPSIDE POTENTIAL
• Higher than estimated oil demand in China / India
• Disruption in short-haul producer (Venezuela)
• Seasonal factors – e.g. Bosphorus congestion

Teekay Shipping Corporation: The Marine Midstream Company 26

World Oil Demand vs. Supply World Oil Demand vs. Supply

70.0 72.0 74.0 76.0 78.0 80.0 82.0 84.0 1q99 2q99 3q99 4q99 1q00 2q00 3q00 4q00 1q01 2q01 3q01 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04E 3q04E 4q04E

Source : IEA

Million Bbls / Day World oil demand World oil supply IEA forecasts Global Oil Demand of 82.6 mb/d - highest ever

Teekay Shipping Corporation: The Marine Midstream Company 27

Global Oil Demand Global Oil Demand – – Growing Stronger Every Year Growing Stronger Every Year

73.0 75.0 77.0 79.0 81.0 83.0 1st quarter 2nd quarter 3rd quarter 4th quarter

Source : IEA

Million Bbls/Day

2004E 2003 2002 2001 2000 1999

Teekay Shipping Corporation: The Marine Midstream Company 28

China Oil Demand China Oil Demand

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 1Q1995 4Q1995 3Q1996 2Q1997 1Q1998 4Q1998 3Q1999 2Q2000 1Q2001 4Q2001 3Q2002 2Q2003 1Q2004 4Q2004

Source : IEA

Million Bbls/Day

• Dom. Prod.

Imports

Teekay Shipping Corporation: The Marine Midstream Company 29

Chinese Net Oil Imports Chinese Net Oil Imports

• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004ytd

Source : Chinese Customs

Million Bbls/Day Crude Prod

Teekay Shipping Corporation: The Marine Midstream Company 30

India Oil Demand India Oil Demand

0.0 0.5 1.0 1.5 2.0 2.5 3.0 1Q1995 4Q1995 3Q1996 2Q1997 1Q1998 4Q1998 3Q1999 2Q2000 1Q2001 4Q2001 3Q2002 2Q2003 1Q2004 4Q2004

Source : IEA

Million Bbls/Day

• Dom. Prod.

Imports

Teekay Shipping Corporation: The Marine Midstream Company 31

Tanker Supply Tanker Supply

• 30
• 20
• 10

10 20 30 40 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Clarkson

Million Dwt

Deliveries Deletions On Order Net Change

Deliveries of 59 mdwt Mandatory Scrapping

• f 34

mdwt

4.5 mdwt mandatory scrapping 17.5 mdwt voluntary scrapping

Teekay Shipping Corporation: The Marine Midstream Company 32

World Tanker Supply / Demand Balance World Tanker Supply / Demand Balance to Remain Tight Through 2006 to Remain Tight Through 2006

2004/2005 2006 (mdwt) (mdwt) Newbuilding deliveries 59 19 less: mandatory scrapping * 34 1 Net fleet growth 25 18 Tanker demand growth ** 29 12 Change in supply / demand * excludes any voluntary scrapping

6

balance

• 4

3.5% 4.6% Tanker Demand Growth (p.a.) 2% 2.6% Oil Demand Growth (p.a.) 2006 2004/2005 ** Based on:

Teekay Shipping Corporation: The Marine Midstream Company 33

Tanker Tanker Utilisation Utilisation vs. vs. Aframax TCE Aframax TCE

80 82 84 86 88 90 92 94 96 98 100 1q94 3q94 1q95 3q95 1q96 3q96 1q97 3q97 1q98 3q98 1q99 3q99 1q00 3q00 1q01 3q01 1q02 3q02 1q03 3q03 1q04

Source: Platou / CRS

Percentage 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 US$ per day Utilisation Aframax TCE

90% utilization is considered full use of the tanker fleet

Teekay Shipping Corporation: The Marine Midstream Company 34

Aframax Values Aframax Values

0.0 10.0 20.0 30.0 40.0 50.0 60.0 May-76 May-78 May-80 May-82 May-84 May-86 May-88 May-90 May-92 May-94 May-96 May-98 May-00 May-02 May-04 US$ Million 5-Year Old NB

Teekay Shipping Corporation: The Marine Midstream Company 35

Tanker Market Conclusion Tanker Market Conclusion

Continued strong tanker market fundamentals Oil Demand / Supply

At 2.9% in 2004, global oil demand growth forecast highest in 23

years

Oil demand growth led by strong economic growth in Asia (China)

and US

Increased oil production from Middle East OPEC members provides

a boost to tanker tonne-mile demand

Tanker Supply

Tanker fleet growth restricted as IMO mandatory phase-out deadline

draws closer

Other Factors

ISPS (IMO Ship/Port Security) readiness could lead to discrimination Changes to economic growth forecasts (China, US, India) Geo-political events – Iraq / Venezuela / terrorism Another ‘Prestige’ event

Teekay Shipping Corporation: The Marine Midstream Company 36

Exponential Fleet Growth Over 5 Years Exponential Fleet Growth Over 5 Years

1998 TODAY

Spot-rate Vessels Fixed-rate Vessels 165 Vessels Vessels

Including N/Bs and in-chartered vessels

30% CAGR

46 Spot-rate Vessels

Teekay Shipping Corporation: The Marine Midstream Company 37

LNG Economics LNG Economics

Based on the present newbuilding price of $170 - $175 million

$53,500 - $57,500 / day Bareboat Rate $11,500 - $12,500 / day less: OPEX $65,000 - $70,000 / day TCE

Assumed contract length = 20 years

NPV of above scenario using IRR NPV of above scenario using W.A.C.C. minus

Fixed-rate Debt financing > 80%

Cash-on-cash return >10% ROE >20% ~ $30 million EVA

Teekay Shipping Corporation: The Marine Midstream Company 38

Tapias: Low Tapias: Low-

• Risk

Risk Long Term Contracts Long Term Contracts

Contracts include cost escalations, “locking in” our cash flows Loss of hire insurance in place on contracts Interest Rates: hedged to match duration of charter terms or;

“flow through” to the charter party

Long repayment profile of principal matches revenue stream Non-recourse debt Limited/Punitive termination rights High credit quality customers

Teekay Shipping Corporation: The Marine Midstream Company 39

The World Leader in The World Leader in Offshore Loading Offshore Loading

• Acquired UNS for $780 million in cash - strategic beachhead
• Acquired Navion for $800 million in cash – vertical integration with the

leading offshore loading logistics provider

• Invested a further $260 million in growth markets outside North Sea

Approximately half of Teekay’s capital is now invested in “floating pipelines” Significant Growth Potential in Offshore Oil:

• Rapid growth in deepwater exploration
• Upside in core North Sea market
• Upside in core Brazil market
• Potential for further growth in:

Gulf of Mexico East coast of Canada

Teekay Shipping Corporation: The Marine Midstream Company 40

Shuttle Market has Attractive Shuttle Market has Attractive Characteristics Characteristics

The North Sea

Refineries Refineries

Oil& Gas fields Shuttle tanker traffic

Marginal fields & deepwater exploration Refineries

Sophisticated technology with barriers to entry Economies of scale required for efficient scheduling Significant long-term stable cash flow High profitability

Teekay Shipping Corporation: The Marine Midstream Company 41

50 100 150 200 250 300 350 400 450 2002 2003 2004 2005

$ millions

Tapias Navion Organic Growth Base

Quantum Leap in Quantum Leap in Fixed Fixed-

• rate Segment Cash Flow

rate Segment Cash Flow

CAGR = 58%

* * Long-term fixed-rate cash flow from vessel operations

Teekay Shipping Corporation: The Marine Midstream Company 42

Teekay Fixed Teekay Fixed-

• rate Segment

rate Segment Returns Analysis Returns Analysis

Teekay’s fixed-rate contract fleet is projected to have a cash-on-cash return

• f over 13%

Capital ROIC Invested Fixed-rate Segment 8%

Q1 2004

$1.84 billion

4.0% 7.0% 10.0% 13.0% 16.0% 1 2 3 4 5 6 7 8 9 10

ROIC IRR W.A.C.C.

Example of one of Teekay’s long-term fixed-rate contracts

Fixed-rate Segment ROIC Increasing

Year

Teekay Shipping Corporation: The Marine Midstream Company 43

Building the Platform Building the Platform

CUSTOMER LOGISTICS FIXED ASSETS (HARDWARE) OPERATIONS (SOFTWARE)

TEEKAY'S GROWTH PLATFORM

Technical and Commercial Management

Aframax Indo-Pacific

Australian Technical Management

Product Carriers FSO Bona Aframax Atlantic

Technical and Commercial Management BHP ConocoPhillips L/T Contracts

FSO FSO

Navion Shuttle Logistics VOC Kollakis Ship Management Training Company

Navion Product Ardmore Offshore FSO

CEPSA L/T Suezmax Contracts IUM Ship Management Company Spanish Technical and Commercial Management

Specialized Aframax Newbuildings Tapias LNG UNS Shuttle Tankers Navion Suezmax and VLCC in-charters

Skaugen Lightering JV Caltex

Teekay Shipping Corporation: The Marine Midstream Company 44

Building the Platform Building the Platform

TEEKAY'S GROWTH PLATFORM

CUSTOMER LOGISTICS FIXED ASSETS (HARDWARE) OPERATIONS (SOFTWARE)

Navion Shuttle Logistics VOC BHP Kollakis Ship Management Caltex CEPSA L/T Suezmax Contracts ConocoPhillips L/T Contracts IUM Ship Management Company Australian Technical Management Technical and Commercial Management Training Company

UNS Shuttle Tankers Navion Suezmax and VLCC in-charters Bona Aframax Atlantic Specialized Aframax Newbuildings Aframax Indo-Pacific Navion Product Product Carriers Ardmore Offshore Tapias LNG FSO

Technical and Commercial Management

FSO FSO FSO

Skaugen Lightering JV Spanish Technical and Commercial Management

….plus organic growth in each segment throughout this period

Teekay Shipping Corporation: The Marine Midstream Company 45

Building the Platform Building the Platform

The Teekay Marine Midstream Platform

CUSTOMER LOGISTICS FIXED ASSETS (HARDWARE) OPERATIONS (SOFTWARE)

TEEKAY'S GROWTH PLATFORM

Teekay Shipping Corporation: The Marine Midstream Company 46

Investment Investment Highlights Highlights

• An integrated supplier of Midstream oil services,

not just a ship owner

• Recent acquisition provides attractive entry into

high growth LNG shipping sector

• Financial strength to pursue continued profitable

growth

• Positioned to benefit from strong tanker market
• Profitable throughout the cycle; large base of

long-term fixed-rate business coupled with significant spot market upside

Teekay Shipping Corporation: The Marine Midstream Company 47

Appendix Appendix -

• Fleet List

Fleet List

Owned Vessels Chartered-in Vessels Newbuildings

• n Order

Total Spot Tanker Fleet: VLCC's 1 2

• 3

Suezmaxes 4 5 1 10 Aframaxes 43 15 12 70 Large Product Tankers

• 5
• 5

Small Product Tankers

• 10
• 10

Total Spot Tanker Fleet 48 37 13 98 Long-term Fixed-Rate Contract Fleet: Shuttle Tankers 29 13 1 43 Conventional Tankers 11

• 4

15 Floating Storage & Offtake ("FSO") Vessels 3

• 3

LNG Carriers 2

• 2

4 LPG / Methanol Carriers 1 1

• 2

Total Long-Term Fixed-Rate Contract Fleet 46 14 7 67 Total 94 51 20 165 Number of Vessels

Fleet list as of May 31, 2004

Teekay Shipping Corporation: The Marine Midstream Company 48

Appendix Appendix – – Reconciliation of Reconciliation of Cash Flow from Vessel Operations Cash Flow from Vessel Operations

• Cash flow from vessel operations represents income from vessel operations before

depreciation and amortization expense. Cash flow from operations is included because such data is used by certain investors to measure a company's financial performance. Cash flow from operations is not required by accounting principles generally accepted in the United States and should not be considered as an alternative to net income or any

• ther indicator of the Company's performance required by accounting principles

generally accepted in the United States.

• The following table reconciles the Company's Income from vessel operations with Cash

flow from operations for the periods presented on slide 41 and slide 11.

Year Ended Year Ended Reconciliation of Cash flow from vessel

• Dec. 31, 2002
• Dec. 31, 2003
• perations from fixed-rate long-term contracts ($000s)

Actual Incom e from vessel operations 56,863 105,007 Depreciation and Am ortization 43,889 84,863 Cash flow from vessel operations 100,752 189,870 Year Ended Year Ended

• Dec. 31, 2004
• Dec. 31, 2005

Projection Incom e from vessel operations 201,000 245,000 Depreciation and Am ortization 135,000 155,000 Cash flow from vessel operations 336,000 400,000 Low Cycle Mid-Cycle High-Cycle Super-Cycle $13,000/day $19,000/day $27,500/day $40,000/day Projection Income from vessel operations 174,000 344,000 588,500 951,000 Depreciation and Amortization 240,000 240,000 240,000 240,000 Cash flow from vessel operations 414,000 584,000 828,500 1,191,000