Release: Teekay awarded two long-term LNG contracts

(NASSAU, Bahamas, Jul 27, 2005)Teekay Shipping Corporation (Teekay or the Company) announced today that it has been awarded contracts to charter two 155,000 cubic-meter liquefied natural gas (LNG) carriers to the Tangguh LNG project in Indonesia. The contractual relationship for the 20-year fixed-rate charters will be with The Tangguh Production Sharing Contractors, a consortium led by BP Berau, a subsidiary of BP plc. The vessels will be chartered at fixed rates, with inflation adjustments, commencing in late 2008 and early 2009.

In connection with this award, Teekay has exercised shipbuilding options with Hyundai Heavy Industries Co. Ltd. to construct two LNG carriers at preferential prices compared to current market values. Teekay is entering into these transactions with an Indonesian partner who has taken a 30 percent interest in the vessels.

In accordance with existing agreements, Teekay is required to offer its ownership interest in these vessels and related charter contracts to its 78-percent-owned subsidiary Teekay LNG Partners L.P.

About Teekay

Teekay Shipping Corporation transports more than 10 percent of the world's seaborne oil and has recently expanded into the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE:TGP). With a fleet of more than 140 tankers, offices in 14 countries and 5,500 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.

Teekay's common stock is listed on the New York Stock Exchange where it trades under the symbol "TK".

About the Tangguh LNG Project

The Tangguh LNG project is located in Papua, Indonesia and is operated by the majority owner in the project, BP Berau, a subsidiary of BP plc. The Tangguh LNG project will be Indonesia's third LNG center. The LNG vessels are expected to be delivered to the Tangguh project in Papua, Indonesia beginning in the fourth quarter of 2008, and will be used by the project to transport its LNG exports to K-Power and POSCO in Korea and to Sempra Energy on the west coast of Mexico. (end of release)