-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 L6lyAur1hkISp5eNr8x4acKP5sNkLcH7vNsw7U2aE+q8/9hSdDIMsiYUt3OPjCrF
 k8eeeUIAfdd+XaVrrlr9zQ==

<SEC-DOCUMENT>0000945234-08-000168.txt : 20080416
<SEC-HEADER>0000945234-08-000168.hdr.sgml : 20080416
<ACCEPTANCE-DATETIME>20080416161700
ACCESSION NUMBER:		0000945234-08-000168
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20080416
DATE AS OF CHANGE:		20080416

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Teekay LNG Partners L.P.
		CENTRAL INDEX KEY:			0001308106
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER TRANSPORTATION [4400]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			1T
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-137697
		FILM NUMBER:		08760016

	BUSINESS ADDRESS:	
		STREET 1:		4TH FLOOR, BELVEDERE BUILDING
		STREET 2:		69 PITTS BAY ROAD
		CITY:			HAMILTON
		STATE:			D0
		ZIP:			HM 08
		BUSINESS PHONE:		(441) 298-2530

	MAIL ADDRESS:	
		STREET 1:		SUITE NO. 1778, PAR-LA-VILLE ROAD
		CITY:			HAMILTON
		STATE:			D0
		ZIP:			HM 11
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>o40020e424b5.htm
<DESCRIPTION>PRELIMINARY PROSPECTUS SUPPLEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Preliminary Prospectus Supplement</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<P>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Filed
    Pursuant to Rule&#160;424(b)(5)<BR>
    Registration No.
    <FONT style="white-space: nowrap">333-137697</FONT></FONT></B>
</DIV>
<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV><P>

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 8pt; font-family: Arial, Helvetica; color: #E8112D">The
information contained in this preliminary prospectus supplement
is not complete and may be changed. This preliminary prospectus
supplement and the attached prospectus are not an offer to sell
nor do they seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 90%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">SUBJECT TO COMPLETION, DATED
    APRIL&#160;16, 2008</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS SUPPLEMENT (To Prospectus dated September&#160;29,
    2006)</B>
</DIV>

<DIV style="margin-top: 21pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">5,000,000 Common
    Units</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Representing Limited Partner
    Interests</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o40020o4002099.gif" alt="(TEEKAY LNG PARTNERS L.P. LOGO)"><FONT style="font-size: 14pt">
    </FONT>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">Teekay LNG Partners
    L.P.</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">$&#160;&#160;&#160;&#160;&#160;
    per common unit</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=484 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are selling 5,000,000 of our common units, representing
    limited partner interests. We have granted the underwriters an
    option to purchase up to 750,000 additional common units to
    cover over-allotments, if any. Teekay Corporation, which
    beneficially owns and controls our general partner, has agreed
    to purchase $50.0&#160;million of unregistered common units from
    us at the public offering price, subject to and at the closing
    of this offering. The units privately placed with Teekay
    Corporation will not be subject to any underwriting discounts or
    commissions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units are listed on the New York Stock Exchange under
    the symbol &#147;TGP.&#148; The last reported sale price of our
    common units on the New York Stock Exchange on April&#160;15,
    2008 was $29.40 per common unit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our common units involves risks. See &#147;Risk
    Factors&#148; beginning on
    <FONT style="white-space: nowrap">page&#160;S-8</FONT>
    of this prospectus supplement and page&#160;7 of the
    accompanying prospectus before you make an investment in our
    common units.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus supplement or the
    accompanying prospectus are truthful or complete. Any
    representation to the contrary is a criminal offense.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="7%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Per Common<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Unit</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discount
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds to us (before expenses) from this offering to the public
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    <B>$</B>
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters expect to deliver the common units on or about
    April&#160;&#160;&#160;, 2008.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=484 length=84 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">Citi</FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">
    Wachovia Securities</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=484 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">UBS
    Investment Bank</FONT></B></TD>
    <TD nowrap align="center">    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">
    Raymond James</FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">
    Deutsche Bank Securities</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 11pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Dahlman Rose&#160;&#038;
    Company</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus supplement is
    April&#160;&#160;&#160;, 2008.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 90%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This document is in two parts. The first part is this prospectus
    supplement, which describes the specific terms of this offering
    of common units. The second part is the accompanying prospectus,
    which gives more general information, some of which may not
    apply to this offering of common units. Generally, when we refer
    to the &#147;prospectus,&#148; we refer to both parts combined.
    If information varies between this prospectus supplement and the
    accompanying prospectus, you should rely on the information in
    this prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information contained or
    incorporated by reference in this prospectus or any &#147;free
    writing prospectus&#148; we may authorize to be delivered to
    you. We have not authorized anyone to provide you with different
    information. If anyone provides you with additional, different
    or inconsistent information, you should not rely on it. You
    should not assume that the information contained in this
    prospectus or any &#147;free writing prospectus&#148; we may
    authorize to be delivered to you, as well as the information we
    previously filed with the Securities and Exchange Commission, or
    SEC, that is incorporated by reference herein, is accurate as of
    any date other than its respective date. Our business, financial
    condition, results of operations and prospects may have changed
    since such dates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are offering to sell the common units, and are seeking offers
    to buy the common units, only in jurisdictions where offers and
    sales are permitted. The distribution of this prospectus and the
    offering of the common units in certain jurisdictions may be
    restricted by law. Persons outside the United States who come
    into possession of this prospectus must inform themselves about
    and observe any restrictions relating to the offering of the
    common units and the distribution of this prospectus outside the
    United States. This prospectus does not constitute, and may not
    be used in connection with, an offer or solicitation by anyone
    in any jurisdiction in which such offer or solicitation is not
    authorized or in which the person making such offer or
    solicitation is not qualified to do so or to any person to whom
    it is unlawful to make such offer or solicitation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Prospectus Supplement</B>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>Where You Can Find More Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>Incorporation of Documents by Reference</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>Forward Looking Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>Summary</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-8
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-10
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>Capitalization</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>Price Range of Common Units and Distributions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-12
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>Material Tax Considerations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-13
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>Underwriting</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-19
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>Service of Process and Enforcement of Civil
    Liabilities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-22
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-22
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-22
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-23
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 15pt">
<TD colspan="5">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'><B>Prospectus</B></A>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>About This Prospectus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>Teekay LNG Partners L.P.&#160;</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>Teekay LNG Finance Corp.&#160;</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>Subsidiary Guarantors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>Where You Can Find More Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'>Forward-Looking Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#125'>Ratio of Earnings To Fixed Charges</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#126'>Price Range of Common Units and Distributions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#127'>Description of The Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#128'>Cash Distributions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#129'>Description of Debt Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#130'>Material U.S. Federal Income Tax
    Considerations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#131'><FONT style="white-space: nowrap">Non-United</FONT>
    States Tax Consequences</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#132'>Plan Of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#133'>Service of Process and Enforcement of Civil
    Liabilities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#134'>Legal</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#135'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#136'>Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    80
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-3</FONT>
    regarding the securities covered by this prospectus. This
    prospectus does not contain all of the information found in the
    registration statement. For further information regarding us and
    the securities offered in this prospectus, you may wish to
    review the full registration statement, including its exhibits.
    In addition, we file annual, quarterly and other reports with
    and furnish information to the SEC. You may inspect and copy any
    document we file with or furnish to the SEC at the public
    reference facilities maintained by the SEC at
    100&#160;F&#160;Street, NE, Washington,&#160;D.C.&#160;20549.
    Copies of this material can also be obtained upon written
    request from the Public Reference Section of the SEC at
    100&#160;F&#160;Street, NE, Washington,&#160;D.C. 20549, at
    prescribed rates or from the SEC&#146;s web site on the Internet
    at <U>www.sec.gov</U> free of charge. Please call the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    for further information on public reference rooms. You can also
    obtain information about us at the offices of the New York Stock
    Exchange, Inc., 20&#160;Broad Street, New York, New York 10005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a foreign private issuer, we are exempt under the Securities
    Exchange Act from, among other things, certain rules prescribing
    the furnishing and content of proxy statements, and our
    executive officers, directors and principal unitholders are
    exempt from the reporting and short-swing profit recovery
    provisions contained in Section&#160;16 of the Exchange Act. In
    addition, we are not required under the Exchange Act to file
    periodic reports and financial statements with the SEC as
    frequently or as promptly as U.S.&#160;companies whose
    securities are registered under the Exchange Act, including the
    filing of quarterly reports or current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K.</FONT>
    However, we intend to make available quarterly reports
    containing our unaudited interim financial information for the
    first three fiscal quarters of each fiscal year.
</DIV>
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INCORPORATION
    OF DOCUMENTS BY REFERENCE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The SEC allows us to &#147;incorporate by reference&#148;
    information that we file with the SEC. This means that we can
    disclose important information to you without actually including
    the specific information in this prospectus by referring you to
    other documents filed separately with the SEC. The information
    incorporated by reference is an important part of this
    prospectus. Information that we later provide to the SEC, and
    which is deemed to be &#147;filed&#148; with the SEC,
    automatically will update information previously filed with the
    SEC, and may replace information in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We incorporate by reference into this prospectus the documents
    listed below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the fiscal year ended December&#160;31, 2007;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our current Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    filed on April&#160;16, 2008 that we identified as being
    incorporated by reference into the registration statement of
    which this prospectus is a part;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all subsequent Reports on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    filed prior to the termination of this offering that we identify
    in such Reports as being incorporated by reference into the
    registration statement of which this prospectus is a
    part;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the description of our common units contained in our
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;8-A/A</FONT>
    filed on September&#160;29, 2006, including any subsequent
    amendments or reports filed for the purpose of updating such
    description.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These reports contain important information about us, our
    financial condition and our results of operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may obtain any of the documents incorporated by reference in
    this prospectus from the SEC through its public reference
    facilities or its website at the addresses provided above. You
    also may request a copy of any document incorporated by
    reference in this prospectus (excluding any exhibits to those
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    documents, unless the exhibit is specifically incorporated by
    reference in this document), at no cost by visiting our internet
    website at <U>www.teekaylng.com</U>, or by writing or calling us
    at the following address:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <FONT style="font-family: 'Times New Roman', Times">Teekay LNG
    Partners L.P.
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    4<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
    Floor, Belvedere Building
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    69 Pitts Bay Road
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Hamilton, HM 08, Bermuda
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attn: Corporate Secretary
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">(441)&#160;298-2530</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information incorporated by
    reference or provided in this prospectus or any prospectus
    supplement. We have not authorized anyone else to provide you
    with any information. You should not assume that the information
    incorporated by reference or provided in this prospectus or any
    prospectus supplement is accurate as of any date other than the
    date on the front of each document. The information contained in
    our website is not part of this prospectus
</DIV>
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FORWARD-LOOKING
    STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All statements, other than statements of historical fact,
    included in or incorporated by reference into this prospectus
    are forward-looking statements. In addition, we and our
    representatives may from time to time make other oral or written
    statements that are also forward-looking statements. Such
    statements include, in particular, statements about our plans,
    strategies, business prospects, changes and trends in our
    business, and the markets in which we operate. In some cases,
    you can identify the forward-looking statements by the use of
    words such as &#147;may,&#148; &#147;will,&#148;
    &#147;could,&#148; &#147;should,&#148; &#147;would,&#148;
    &#147;expect,&#148; &#147;plan,&#148; &#147;anticipate,&#148;
    &#147;intend,&#148; &#147;forecast,&#148; &#147;believe,&#148;
    &#147;estimate,&#148; &#147;predict,&#148; &#147;propose,&#148;
    &#147;potential,&#148; &#147;continue&#148; or the negative of
    these terms or other comparable terminology. Forward-looking
    statements include statements with respect to, among other
    things, those set forth in the section titled &#147;Material Tax
    Considerations&#148; in this prospectus supplement, including
    with respect to ratio of taxable income to distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These and other forward-looking statements are subject to risks,
    uncertainties and assumptions, including those risks discussed
    in &#147;Risk Factors&#148; set forth in the prospectus and
    those risks discussed in other reports we file with the SEC and
    that are incorporated in this prospectus by reference, including
    our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the fiscal year ended December&#160;31, 2007. The risks,
    uncertainties and assumptions involve known and unknown risks
    and are inherently subject to significant uncertainties and
    contingencies, many of which are beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Forward-looking statements are made based upon management&#146;s
    current plans, expectations, estimates, assumptions and beliefs
    concerning future events affecting us and, therefore, involve a
    number of risks and uncertainties, including those risks
    discussed in &#147;Risk Factors&#148; and otherwise incorporated
    into this prospectus. We caution that forward-looking statements
    are not guarantees and that actual results could differ
    materially from those expressed or implied in the
    forward-looking statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We undertake no obligation to update any forward-looking
    statement to reflect events or circumstances after the date on
    which such statement is made or to reflect the occurrence of
    unanticipated events. New factors emerge from time to time, and
    it is not possible for us to predict all of these factors.
    Further, we cannot assess the effect of each such factor on our
    business or the extent to which any factor, or combination of
    factors, may cause actual results to be materially different
    from those contained in any forward-looking statement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following summary highlights selected information
    contained elsewhere in this prospectus and the documents
    incorporated by reference herein and does not contain all the
    information you will need in making your investment decision.
    You should carefully read this entire prospectus supplement, the
    accompanying prospectus and the documents incorporated by
    reference herein. Unless otherwise specifically stated, the
    information presented in this prospectus supplement assumes that
    the underwriters have not exercised their over-allotment
    option.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Unless otherwise indicated, references in this prospectus to
    &#147;Teekay LNG Partners,&#148; &#147;we,&#148; &#147;us&#148;
    and &#147;our&#148; and similar terms refer to Teekay LNG
    Partners L.P.
    <FONT style="white-space: nowrap">and/or</FONT> one
    or more of its subsidiaries, except that those terms, when used
    in this prospectus in connection with the common units described
    herein, shall mean specifically Teekay LNG Partners L.P.
    References in this prospectus to &#147;Teekay Corporation&#148;
    refer to Teekay Corporation
    <FONT style="white-space: nowrap">and/or</FONT> any
    one or more of its subsidiaries.</I>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are an international provider of marine transportation
    services for liquefied natural gas (or <I>LNG</I>), liquefied
    petroleum gas (or <I>LPG</I>) and crude oil. We were formed on
    November&#160;3, 2004 by Teekay Corporation, the world&#146;s
    largest owner and operator of medium-sized crude oil tankers, to
    expand its operations in the LNG shipping sector. Our primary
    growth strategy focuses on expanding our fleet of LNG carriers
    under long-term, fixed-rate charters. In December 2006, we
    announced that we would be acquiring, upon their deliveries in
    2008 and 2009, three LPG newbuilding carriers. LPG is a
    by-product of natural gas separation and crude oil refining. We
    believe LPG transportation services are a natural extension of
    our core LNG transportation business. We view our Suezmax tanker
    fleet primarily as a source of stable cash flow as we expand our
    LNG and LPG operations. Our fleet, excluding newbuildings,
    currently consists of nine LNG carriers (including two carriers
    acquired April&#160;1, 2008), eight Suezmax class crude oil
    tankers and one LPG carrier, all of which are double-hulled. We
    seek to leverage the expertise, relationships and reputation of
    Teekay Corporation and its affiliates to pursue growth
    opportunities in the LNG and LPG shipping sector. As of
    December&#160;31, 2007, Teekay Corporation, which beneficially
    owns and controls our general partner, beneficially owned a
    63.7% interest in us, including a 2% general partner interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operations are conducted through, and our operating assets
    are owned by, our subsidiaries. We own our interests in our
    subsidiaries through our 100% ownership interest in our
    operating company, Teekay LNG Operating L.L.C., a Marshall
    Islands limited liability company. Our general partner, Teekay
    GP L.L.C., a Marshall Islands limited liability company, has an
    economic interest in us and manages our operations and
    activities. Our general partner does not receive any management
    fee or other compensation in connection with its management of
    our business, but it is entitled to be reimbursed for all direct
    and indirect expenses incurred on our behalf.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are incorporated under the laws of the Republic of The
    Marshall Islands as Teekay LNG Partners L.P. and maintain our
    principal executive headquarters at
    4<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>&#160;Floor,
    Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda.
    Our telephone number at such address is
    <FONT style="white-space: nowrap">(441)&#160;298-2530.</FONT>
    Our website address is <U>www.teekaylng.com.</U>&#160;The
    information contained on our website is not part of this
    prospectus supplement.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Business
    Strategies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our primary business objective is to increase distributable cash
    flow per unit by executing the following strategies:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Acquire new LNG and LPG carriers built to project
    specifications after long-term, fixed-rate time charters have
    been awarded for the LNG and LPG projects</I>.&#160;&#160;Our
    LNG and LPG carriers were built or will be built to customer
    specifications included in the related long-term, fixed-rate
    time charters for the vessels. We intend to continue our
    practice of acquiring LNG and LPG carriers as needed
</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    for approved projects only after the long-term, fixed-rate time
    charters for the projects have been awarded, rather than
    ordering vessels on a speculative basis. We believe this
    approach is preferable to speculative newbuilding because it:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="3%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminates the risk of incremental or duplicative expenditures
    to alter our LNG and LPG carriers to meet customer
    specifications;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    facilitates the financing of new LNG and LPG carriers based on
    their anticipated future revenues;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ensures that new vessels will be employed upon acquisition,
    which should generate more stable cash flow.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Expand our LNG and LPG operations globally.</I>&#160;&#160;We
    seek to capitalize on opportunities emerging from the global
    expansion of the LNG and LPG sector by selectively targeting:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="10%"></TD>
    <TD width="3%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    long-term, fixed-rate time charters wherever there is
    significant growth in LNG and LPG trade;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    joint ventures and partnerships with companies that may provide
    increased access to opportunities in attractive LNG and LPG
    importing and exporting geographic regions;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    strategic vessel and business acquisitions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Provide superior customer service by maintaining high
    reliability, safety, environmental and quality
    standards.&#160;&#160;</I>LNG and LPG project operators seek LNG
    and LPG transportation partners that have a reputation for high
    reliability, safety, environmental and quality standards. We
    seek to leverage our own and Teekay Corporation&#146;s
    operational expertise to create a sustainable competitive
    advantage with consistent delivery of superior customer service.
</TD>
</TR>


<TR style="line-height: 9pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Manage our Suezmax tanker fleet to provide stable cash
    flows.</I>&#160;&#160;The remaining terms for our existing
    long-term Suezmax tanker charters are 8 to 18&#160;years. We
    believe the fixed-rate time charters for our oil tanker fleet
    provide us stable cash flows during their terms and a source of
    funding for expanding our LNG and LPG operations. Depending on
    prevailing market conditions during and at the end of each
    existing charter, we may seek to extend the charter, enter into
    a new charter, operate the vessel on the spot market or sell the
    vessel, in an effort to maximize returns on our Suezmax fleet
    while managing residual risk.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 27pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Developments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Kenai LNG
    Carrier Project</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2007, Teekay Corporation acquired two 1993-built LNG
    carriers from a joint venture between Marathon Oil Corporation
    and ConocoPhillips for a total cost of $230.0&#160;million and
    chartered back the vessels to the sellers until April 2009 (with
    options exercisable by the charterers to extend up to an
    additional seven years). The specialized ice-strengthened
    vessels were purpose-built to carry LNG from Alaska&#146;s Kenai
    LNG plant to Japan. Teekay Corporation offered these vessels to
    us in accordance with the omnibus agreement entered into in
    connection with our initial public offering of common units. On
    April&#160;1, 2008, we acquired these vessels from Teekay
    Corporation for a total cost of $230.0&#160;million and
    immediately chartered the vessels back to Teekay Corporation for
    a period of ten years (plus options exercisable by Teekay
    Corporation to extend up to an additional fifteen years) at a
    fixed rate.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We financed the acquisition of the Kenai LNG carriers with
    borrowings under our existing revolving credit facilities. We
    are seeking to arrange more permanent debt financing of the
    carriers under a $172.5&#160;million senior secured reducing
    credit facility. We expect the facility to be secured by a first
    mortgage lien on the carriers, a pledge of the interests of our
    subsidiaries owning the vessels and other collateral related to
    their operation. The facility would have a
    <FONT style="white-space: nowrap">10-year</FONT>
    term, with an interest rate of LIBOR
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    plus an applicable margin and semi-annual principal payments of
    $6.1&#160;million. Similar to our other credit facilities, the
    senior secured reducing credit facility would require us to
    maintain a minimum level of tangible net worth, a minimum
    aggregate liquidity and a maximum level of leverage, among other
    covenants. We have not negotiated or executed definitive
    documents governing a facility relating to the Kenai LNG
    carriers, and we cannot assure you that we will obtain financing
    on the terms described above, or satisfactory to us, or at all.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RasGas 3,
    Tangguh and Skaugen Projects Expected to Commence in
    2008</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During 2008, we expect to commence the three projects described
    below. The delivery of the first newbuilding is scheduled for
    late April 2008 for the RasGas 3 LNG project, November 2008 for
    the Tangguh LNG project, and late 2008 for the Skaugen LPG
    project, although we cannot guarantee that the carriers will be
    delivered on schedule.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>RasGas 3 LNG Project:</I>&#160;&#160;On November&#160;1,
    2006, we agreed to acquire from Teekay Corporation its 40%
    interest in four LNG carriers and related
    <FONT style="white-space: nowrap">25-year,</FONT>
    fixed-rate time charters (with options to extend up to an
    additional 10&#160;years) to service expansion of an LNG project
    in Qatar. The purchase will occur upon the delivery of the first
    newbuilding, which is scheduled for late April 2008. The
    estimated purchase price (net of assumed debt) for Teekay
    Corporation&#146;s 40% interest in the RasGas 3 LNG project is
    $104.7&#160;million. The customer will be Ras Laffan Liquefied
    Natural Gas Co. Limited (3), a joint venture company between
    Qatar Petroleum and a subsidiary of ExxonMobil Corporation.
    Teekay Corporation has contracted to construct four
    double-hulled LNG carriers of 217,000 cubic meters each at a
    total delivered cost of approximately $1.0&#160;billion,
    excluding capitalized interest, of which we will be responsible
    for 40%. The charters will commence upon vessel deliveries,
    which are scheduled for the first half of 2008, commencing in
    April 2008. The remaining 60% interest in the joint venture
    relating to this project will be held by Qatar Gas Transport
    Company Ltd. (Nakilat). We will have operational responsibility
    for the vessels in this project, although our partner may assume
    operational responsibility beginning 10&#160;years following
    delivery of the vessels.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Tangguh LNG Project.</I>&#160;&#160;On November&#160;1, 2006,
    we agreed to acquire from Teekay Corporation its 70% interest in
    two LNG carriers and the related
    <FONT style="white-space: nowrap">20-year,</FONT>
    fixed-rate time charters to service the Tangguh LNG project in
    Indonesia. The purchase will occur upon the delivery of the
    first newbuilding, which is scheduled for November 2008. The
    estimated purchase price (net of assumed debt) for Teekay
    Corporation&#146;s 70% interest in the Tangguh LNG project is
    $80.3&#160;million. The customer will be The Tangguh Production
    Sharing Contractors, a consortium led by BP Berau Ltd., a
    subsidiary of BP plc. Teekay Corporation has contracted to
    construct two double-hulled LNG carriers of 155,000 cubic meters
    each at a total delivered cost of approximately
    $376.9&#160;million, excluding capitalized interest, of which we
    will be responsible for 70%. The charters will commence upon
    vessel deliveries, which are scheduled for November 2008 and
    January 2009. We will have operational responsibility for the
    vessels in this project. The remaining 30% interest in the joint
    venture relating to this project is held by BLT LNG Tangguh
    Corporation, a subsidiary of PT Berlian Laju Tanker Tbk.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Skaugen LPG Project:</I>&#160;&#160;In December 2006, we
    agreed to acquire three LPG carriers from I.M. Skaugen ASA (or
    <I>Skaugen</I>) for approximately $29.3&#160;million per vessel.
    The vessels are currently under construction and are expected to
    deliver between late 2008 and the third quarter of 2009. The
    first vessel is scheduled to deliver in late 2008. Upon
    delivery, the vessels will be chartered at fixed rates for
    15&#160;years to Skaugen, which engages in the marine
    transportation of petrochemical gases and LPG, and the
    lightering of crude oil.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the Kenai LNG carrier and RasGas 3 projects, we
    expect to have additional cash available to distribute to
    unitholders. We have not decided the amount or timing of any
    increase in the distribution. Any increase in the cash
    distribution to unitholders must be approved by the board of
    directors
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of our general partner based on the actual amount of cash
    available for distribution at the time, which is subject to
    factors beyond our&#160;control.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Angola
    Project</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In December 2007, a consortium in which Teekay Corporation has a
    33% ownership interest agreed to charter four newbuilding
    approximately 160,000-cubic meter LNG carriers for a period of
    20&#160;years to the Angola LNG Project. The Angola LNG Project
    is being developed by subsidiaries of Chevron Corporation,
    Sociedade Nacional de Combustiveis de Angola EP, BP Plc, Total
    S.A., and Eni SpA. The vessels, if constructed, will be
    chartered at fixed rates, with inflation adjustments, commencing
    in 2011. Mitsui&#160;&#038; Co., Ltd. and NYK Bulkship (Europe)
    have 34% and 33% ownership interests in the consortium,
    respectively. In accordance with the omnibus agreement, Teekay
    Corporation is required to offer to us its 33% ownership
    interest in these vessels and related charter contracts not
    later than 180&#160;days before delivery of the newbuilding LNG
    carriers.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="31%"></TD>
    <TD width="1%"></TD>
    <TD width="68%"></TD>
</TR>

<TR>
    <TD valign="top">
    Issuer</TD>
    <TD></TD>
    <TD valign="bottom">
    Teekay LNG Partners L.P.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Common units offered by us</TD>
    <TD></TD>
    <TD valign="bottom">
    5,000,000 common units.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    5,750,000 common units if the underwriters exercise their option
    to purchase an additional 750,000 common units to cover
    over-allotments.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Concurrent private placement to Teekay Corporation</TD>
    <TD></TD>
    <TD valign="bottom">
    Teekay Corporation has agreed to purchase $50.0&#160;million of
    unregistered common units from us at the public offering price,
    subject to and at the closing of this offering. Based on the
    last reported sale price of our common units on April&#160;15,
    2008, which was $29.40 per common unit, the number of
    unregistered common units to be purchased by Teekay Corporation
    would be&#160;1,700,680.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Units outstanding after this offering and the private placement</TD>
    <TD></TD>
    <TD valign="bottom">
    29,241,227&#160;common units and 14,734,572&#160;subordinated
    units. 29,991,227&#160;common units and
    14,734,572&#160;subordinated units, if the underwriters exercise
    their over-allotment option in full, assuming in either case a
    public offering price of $29.40 per common&#160;unit.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="bottom">
    We will use the net proceeds from the public offering of common
    units, the private placement to Teekay Corporation, and the
    related capital contribution of our general partner to repay
    amounts outstanding on one of our revolving credit facilities.
    We will use the net proceeds from any exercise by the
    underwriters of their over-allotment option to repay additional
    amounts outstanding under one of our revolving credit facilities.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Estimated ratio of taxable income to distributions</TD>
    <TD></TD>
    <TD valign="bottom">
    We estimate that if you hold the common units you purchase in
    this offering through December&#160;31, 2011, you will be
    allocated, on a cumulative basis, an amount of U.S. federal
    taxable income for that period that will be 20% or less of the
    cash distributed to you with respect to that period. For a
    discussion of the basis for this estimate and of factors that
    may affect our ability to achieve this estimate, please read
    &#147;Material Tax Considerations&#160;&#151; Ratio of Taxable
    Income to Distributions.&#148;</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before investing in our common units, you should carefully
    consider all of the information included or incorporated by
    reference into this prospectus. Although many of our business
    risks are comparable to those of a corporation engaged in a
    similar business, limited partner interests are inherently
    different from the capital stock of a corporation. When
    evaluating an investment in our common units, you should
    carefully consider those risks discussed under the caption
    &#147;Risk Factors&#148; beginning on page&#160;7 of the
    accompanying prospectus, as well as the discussion of risk
    factors beginning on page&#160;9 of our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the fiscal year ended December&#160;31, 2007, which are
    incorporated by reference into this prospectus. If any of these
    risks were to occur, our business, financial condition or
    operating results could be materially adversely affected. In
    that case, our ability to pay distributions on our common units
    may be reduced, the trading price of our common units could
    decline, and you could lose all or part of your investment. In
    addition we are subject to the following risks and uncertainties.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Exposure
    to currency exchange rate fluctuations will result in
    fluctuations in our cash flows and operating
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are paid in Euros under some of our charters, and a majority
    of our vessel operating expenses and general and administrative
    expenses currently are denominated in Euros, which is primarily
    a function of the nationality of our crew and administrative
    staff. We also make payments under two Euro-denominated term
    loans. If the amount of our Euro-denominated obligations exceeds
    our Euro-denominated revenues, we must convert other currencies,
    primarily the U.S. Dollar, into Euros. An increase in the
    strength of the Euro relative to the U.S. Dollar would require
    us to convert more U.S. Dollars to Euros to satisfy those
    obligations, which would cause us to have less cash available to
    make required payments on our debt securities and for
    distribution on our common units. In addition, if we do not have
    sufficient U.S.&#160;Dollars, we may be required to convert
    Euros into U.S. Dollars for payments under any U.S.
    Dollar-denominated debt securities or for distributions to
    unitholders. An increase in the strength of the U.S. Dollar
    relative to the Euro could cause us to have less cash available
    for these payments and distributions in this circumstance. We
    have not entered into currency swaps or forward contracts or
    similar derivatives to mitigate this risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we report our operating results in U.S. Dollars, changes
    in the value of the U.S. Dollar relative to the Euro also result
    in fluctuations in our reported revenues and earnings. In
    addition, under U.S.&#160;accounting guidelines, all foreign
    currency-denominated monetary assets and liabilities such as
    cash and cash equivalents, accounts receivable, restricted cash,
    accounts payable, long-term debt and capital lease obligations
    are revalued and reported based on the prevailing exchange rate
    at the end of the period. This revaluation historically has
    caused us to report significant non-monetary foreign currency
    exchange gains or losses each period. The primary source for
    these gains and losses is our Euro-denominated term loans. In
    2006 and 2007, we reported foreign currency exchange losses of
    $39.5&#160;million and $41.2&#160;million. We expect to continue
    to have substantial unrealized non-cash foreign currency
    exchange losses due to the continuing appreciation of the Euro
    against the U.S.&#160;dollar.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Some
    of our subsidiaries will be classified as corporations for U.S.
    federal income tax purposes, which could result in additional
    tax.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our subsidiaries Arctic Spirit LLC and Polar Spirit LLC, owning
    the two Kenai LNG carriers, will be classified as corporations
    for U.S.&#160;federal income tax purposes. As such, if these
    subsidiaries fail to qualify for an exemption from U.S.&#160;tax
    on the U.S.&#160;source portion of our income attributable to
    transportation that begins or ends (but not both) in the United
    States, the subsidiaries may be subject to U.S.&#160;tax on such
    income. The imposition of this tax would result in decreased
    cash available for distribution to common unitholders. Please
    read &#147;Material Tax Considerations&#160;&#151; Taxation of
    the Partnership.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, these subsidiaries could be treated as passive
    foreign investment companies (or <I>PFIC</I>s)&#160;for
    U.S.&#160;federal income tax purposes. U.S.&#160;shareholders of
    a PFIC are subject to a disadvantageous U.S.&#160;federal income
    tax regime with respect to the income derived by the PFIC, the
    distributions they receive from the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    PFIC, and the gain, if any, they derive from the sale or other
    disposition of their interests in the PFIC. For a discussion of
    the consequences of possible PFIC classification on our
    unitholders, please read &#147;Material Tax
    Considerations&#160;&#151; Consequences of Possible PFIC
    Classification.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    IRS may challenge the manner in which we value our assets in
    determining the amount of income, gain, loss and deduction
    allocable to the unitholders, which could adversely affect the
    value of the common units.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder&#146;s taxable income or loss with respect to a
    common unit each year will depend upon a number of factors,
    including the nature and fair market value of our assets at the
    time the holder acquired the common unit, whether we issue
    additional units or whether we engage in certain other
    transactions, and the manner in which our items of income, gain,
    loss and deduction are allocated among our partners. For this
    purpose, we determine the value of our assets and the relative
    amounts of our items of income, gain, loss and deduction
    allocable to our unitholders and our general partner as holder
    of the incentive distribution rights by reference to the value
    of our interests, including the incentive distribution rights.
    The IRS may challenge any valuation determinations that we make,
    particularly as to the incentive distribution rights, for which
    there is no public market. Moreover, the IRS could challenge
    certain other aspects of the manner in which we determine the
    relative allocations made to our unitholders and to the general
    partner as holder of our incentive distribution rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A successful IRS challenge to our valuation or allocation
    methods could increase the amount of net taxable income and gain
    realized by a unitholder with respect to a common unit. Any such
    IRS challenge, whether or not successful, could adversely affect
    the value of our common units.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to receive net proceeds of approximately
    $141.1&#160;million from the sale of common units we are
    offering after deducting the underwriting discounts and
    estimated expenses payable by us. We base this amount on an
    assumed public offering public offering price of $29.40 per
    common unit, the last reported sales price of our common units
    on the New York Stock Exchange on April&#160;15, 2008. We expect
    to receive net proceeds of approximately $162.3&#160;million if
    the underwriters&#146; option to acquire additional common units
    is exercised in full. In addition, we will receive net proceeds
    of $50.0&#160;million from the sale of common units to Teekay
    Corporation and approximately $4.0&#160;million of proceeds from
    the capital contribution by Teekay GP L.L.C., our general
    partner, to maintain its 2% general partner interest in us,
    assuming the underwriters do not exercise their over-allotment
    option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will use the net proceeds from our sale of common units
    covered by this prospectus, the concurrent sale to Teekay
    Corporation, and the capital contribution by Teekay GP L.L.C.,
    our general partner, to repay outstanding debt under one of our
    revolving credit facilities, which has a fluctuating interest
    rate based on the London Interbank Offered Rate (LIBOR) plus
    0.55%. The credit facility matures in April 2018. We have drawn
    on the credit facility for general partnership purposes and to
    fund capital projects and expenditures, including funding the
    $230.0&#160;million acquisition of the two Kenai LNG carriers
    from Teekay Corporation on April&#160;1, 2008. We will be able
    to redraw the amount we repaid on the facility in the future for
    any general partnership purpose or to fund acquisitions,
    including, if determined by us, funding our $104.7&#160;million
    RasGas 3 LNG purchase obligation.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our capitalization as of
    December&#160;31, 2007 on an historical basis and on an as
    adjusted basis to give effect to this offering, the sale of our
    common units to Teekay Corporation, the capital contribution by
    Teekay GP L.L.C., our general partner, to maintain its 2%
    general partner interest in us, and the application of the net
    proceeds therefrom.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The historical data in the table is derived from and should be
    read in conjunction with our historical financial statements,
    including accompanying notes, incorporated by reference in this
    prospectus. You should also read this table in conjunction with
    the section entitled &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of Operations&#148;
    and our consolidated financial statements and the related notes
    thereto, which are incorporated by reference herein from our
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the fiscal year ended December&#160;31, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom">
    <B>(In thousands)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and Cash Equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    91,891
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    91,891
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Restricted cash(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    679,229
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    679,229
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total cash and restricted cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    771,120
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    771,120
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-term debt, including current portion:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-term debt(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,365,117
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,169,994
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-term obligation under capital leases(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    857,280
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    857,280
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,222,397
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,027,274
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Non-controlling interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,077
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    158,077
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Partners&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    699,363
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    894,486
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total capitalization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,079,837
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,079,837
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 11%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=528 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Under certain capital lease arrangements, we maintain restricted
    cash deposits that, together with interest earned on the
    deposits, will equal the remaining scheduled payments we owe
    under the capital leases. The interest we receive from those
    deposits is used solely to pay interest associated with the
    capital leases, and the amount of interest we receive
    approximates the amount of interest we pay on the capital leases.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The capitalization table does not reflect the
    $230.0&#160;million of borrowings on April&#160;1, 2008 to fund
    the acquisition of the two Kenai LNG carriers.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRICE
    RANGE OF COMMON UNITS AND DISTRIBUTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units were first offered on the New York Stock
    Exchange on May&#160;5, 2005, at an initial price of $22.00 per
    unit. Our common units are listed for trading on the New York
    Stock Exchange under the symbol &#147;TGP.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth, for the periods indicated, the
    high and low closing sales price per common unit, as reported on
    the New York Stock Exchange, and the amount of quarterly cash
    distributions declared per unit. The closing sales price of our
    common units on the New York Stock Exchange on April&#160;15,
    2008 was $29.40 per common unit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Closing Sales<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price Ranges</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Quarterly Cash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Distributions(1)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Years Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2005(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Quarters Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    June&#160;30, 2008(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30.48
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.68
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    March&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    September&#160;30, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    36.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5300
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    June&#160;30, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    March&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    38.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    September&#160;30, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    June&#160;30, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    March&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Months Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    April&#160;30, 2008(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30.48
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.68
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    March&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    February&#160;29, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    January&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    December&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.14
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    November&#160;30, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33.46
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    October&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Distributions are shown for the quarter with respect to which
    they were declared. Cash distributions were declared and paid
    within 45&#160;days following the close of each quarter.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Period beginning May&#160;5, 2005.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Period beginning April&#160;1, 2008 and ending April&#160;15,
    2008.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The tax consequences to you of an investment in our common units
    will depend in part on your own tax circumstances. For a
    discussion of the principal U.S.&#160;federal income tax
    considerations and
    <FONT style="white-space: nowrap">non-U.S.&#160;federal</FONT>
    income tax considerations associated with our operations and the
    purchase, ownership and disposition of our common units, please
    read &#147;Material U.S.&#160;Federal Income Tax
    Consequences,&#148; beginning on page&#160;58, and
    <FONT style="white-space: nowrap">&#147;Non-United</FONT>
    States Tax Consequences,&#148; beginning on page&#160;75, of the
    accompanying base prospectus, which is incorporated by reference
    into this prospectus. You are urged to consult with your own tax
    advisor about the federal, state, local and foreign tax
    consequences peculiar to your circumstances. In addition to the
    discussion set forth in the accompanying base prospectus, please
    consider the following U.S.&#160;federal income tax consequences:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of the Partnership</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Classification
    as a Partnership.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of U.S.&#160;federal income taxation, a partnership
    is not a taxable entity, and although it may be subject to
    withholding taxes on behalf of its partners under certain
    circumstances, a partnership itself incurs no U.S.&#160;federal
    income tax liability. Instead, each partner of a partnership is
    required to take into account his share of items of income,
    gain, loss, deduction and credit of the partnership in computing
    his U.S.&#160;federal income tax liability, regardless of
    whether cash distributions are made to him by the partnership.
    Distributions by a partnership to a partner generally are not
    taxable unless the amount of cash distributed exceeds the
    partner&#146;s adjusted tax basis in his partnership interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7704 of the Internal Revenue Code provides that
    publicly traded partnerships, as a general rule, will be treated
    as corporations for U.S.&#160;federal income tax purposes.
    However, an exception, referred to as the &#147;Qualifying
    Income Exception,&#148; exists with respect to publicly traded
    partnerships whose &#147;qualifying income&#148; represents 90%
    or more of their gross income for every taxable year. Qualifying
    income includes income and gains derived from the transportation
    and storage of crude oil, natural gas and products thereof,
    including liquefied natural gas. Other types of qualifying
    income include interest (other than from a financial business),
    dividends, gains from the sale of real property and gains from
    the sale or other disposition of capital assets held for the
    production of qualifying income, including stock. We have
    received a ruling from the IRS that we requested in connection
    with our initial public offering that the income we derive from
    transporting LNG and crude oil pursuant to time charters
    existing at the time of our initial public offering is
    qualifying income within the meaning of Section&#160;7704. A
    ruling from the IRS, while generally binding on the IRS, may
    under certain circumstances be revoked or modified by the IRS
    retroactively. As to income that is not covered by the IRS
    ruling, we will rely upon the opinion of Perkins Coie LLP
    whether the income is qualifying income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that less than 5% of our current income is not
    qualifying income; however, this estimate could change from time
    to time for various reasons. Because we have not received an IRS
    ruling or an opinion of counsel that any income we derive from
    transporting LPG, petrochemical gases and ammonia pursuant to
    charters that we have entered into or will enter into in the
    future, or income or gain we recognize from foreign currency
    transactions or from interest rate swaps, is qualifying income,
    we are currently treating income from those sources as
    nonqualifying income. Also, under some circumstances, such as a
    significant increase in interest rates, the percentage of income
    or gain from foreign currency transactions or from interest rate
    swaps in relation to our total gross income could be
    substantial. However, we do not expect income or gains from
    transporting LPG, petrochemical gases or ammonia, and foreign
    currency transactions or interest rate swaps and other income or
    gains that are not qualifying income to constitute 10% or more
    of our future gross income for U.S.&#160;federal income tax
    purposes. Nonetheless, we intend to request a ruling or an
    opinion of counsel, or take such other measures, including
    conducting the LPG operations in a subsidiary corporation, as
    necessary to ensure that the representations made by us and the
    general partner to Perkins Coie LLP described below continue to
    be true.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Perkins Coie LLP is of the opinion that, based upon the Internal
    Revenue Code, Treasury Regulations thereunder, published revenue
    rulings and court decisions, the IRS ruling and representations
    described below, we will be classified as a partnership for
    U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In rendering its opinion, Perkins Coie LLP has relied on factual
    representations made by us and the general partner. The
    representations made by us and our general partner upon which
    Perkins Coie LLP has relied are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We have not elected and will not elect to be treated as a
    corporation, and each of our direct or indirect wholly-owned
    subsidiaries (other than Arctic Spirit LLC, Polar Spirit LLC,
    Taizhou Hull No. WZL 0501 LLC, Taizhou Hull No. WZL 0502 LLC.
    and Taizhou Hull No. WZL 0503 LLC) has properly elected to be
    disregarded as an entity separate from us, for U.S.&#160;federal
    income tax&#160;purposes;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    For each taxable year, at least 90% of our gross income will be
    either (a)&#160;income to which the IRS ruling described above
    or other IRS ruling received by us applies or (b)&#160;of a type
    that Perkins Coie LLP has opined or will opine is
    &#147;qualifying income&#148; within the meaning of
    Section&#160;7704(d) of the Internal Revenue Code.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Classification
    as a Corporation.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to meet the Qualifying Income Exception described
    previously with respect to our classification as a partnership
    for U.S.&#160;federal income tax purposes, other than a failure
    that is determined by the IRS to be inadvertent and that is
    cured within a reasonable time after discovery, we will be
    treated as a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    for U.S.&#160;federal income tax purposes. If previously treated
    as a partnership, our change in status would be deemed to have
    been effected by our transfer of all of our assets, subject to
    liabilities, to a newly formed
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation,</FONT>
    in return for stock in that corporation, and then our
    distribution of that stock to our unitholders and other owners
    in liquidation of their interests in us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were treated as a corporation in any taxable year, either
    as a result of a failure to meet the Qualifying Income Exception
    or otherwise, our items of income, gain, loss, deduction and
    credit would not pass through to unitholders. Instead, we would
    be subject to U.S.&#160;federal income tax based on the rules
    applicable to foreign corporations, not partnerships, and such
    items would be treated as our own.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our subsidiaries Arctic Spirit LLC and Polar Spirit LLC will be
    classified as corporations for U.S.&#160;federal income tax
    purposes and will be subject to U.S.&#160;federal income tax
    based on the rules applicable to foreign corporations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Operating Income.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The operating income of our subsidiaries Arctic Spirit LLC and
    Polar Spirit LLC and, in the event we were treated as a
    corporation, our operating income may be subject to
    U.S.&#160;federal income taxation under one of two alternative
    tax regimes (the 4% gross basis tax or the net basis tax, as
    described below).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The 4%
    Gross Basis Tax.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our subsidiaries Arctic Spirit LLC and Polar Spirit LLC may be
    subject to a 4% U.S.&#160;federal income tax on the
    U.S.&#160;source portion of their gross income (without benefit
    of deductions) attributable to transportation that begins or
    ends (but not both) in the United States, unless the
    Section&#160;883 Exemption applies (as more fully described
    below under &#147;&#151;&#160;The Section&#160;883
    Exemption&#148;) and we file a U.S.&#160;federal income tax
    return to claim that exemption or they are eligible for an
    exemption under an applicable tax treaty. For this purpose,
    gross income attributable to transportation (or transportation
    income) includes income from the use, hiring or leasing of a
    vessel to transport cargo, or the performance of services
    directly related to the use of any vessel to transport cargo,
    and thus includes time charter or bareboat charter income. The
    U.S.&#160;source portion of our subsidiaries&#146;
    transportation income is deemed to be 50% of the income
    attributable to voyages that begin or end (but not both) in the
    United States. Generally, no amount of the income from voyages
    that begin and end outside the United States is treated as
    U.S.&#160;source, and
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    consequently none of the transportation income attributable to
    such voyages is subject to U.S.&#160;federal income tax.
    Although the entire amount of transportation income from voyages
    that begin and end in the United States would be fully taxable
    in the United States, we currently do not expect our
    subsidiaries to have any transportation income from voyages that
    begin and end in the United States; however, there is no
    assurance that such voyages will not occur. In the event we are
    classified as a corporation for U.S.&#160;federal income tax
    purposes, we may be subject to the 4% gross basis tax on all of
    our transportation income that begins or ends in the United
    States unless the Section&#160;883 Exemption applies or we are
    eligible for an exemption under an applicable tax treaty.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Net
    Income Tax and Branch Tax Regime.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither we, nor any of our subsidiaries, currently expect to
    have a fixed place of business in the United States.
    Nonetheless, if this were to change or we or any of our
    subsidiaries were otherwise treated as having such a fixed place
    of business involved in earning U.S.&#160;source transportation
    income, to the extent we or any of our subsidiaries was
    classified as a corporation for U.S.&#160;federal income tax
    purposes, such transportation income may be treated as
    effectively connected with the conduct of a trade or business in
    the United States if substantially all of our U.S.&#160;source
    transportation income were attributable to regularly scheduled
    transportation. We do not believe that we earn U.S.&#160;source
    transportation income that is attributable to regularly
    scheduled transportation. Any income that we or our subsidiaries
    earn that is treated as U.S.&#160;effectively connected income
    would be subject to U.S.&#160;federal corporate income tax (the
    highest statutory rate is currently 35%), unless the
    Section&#160;883 Exemption (as discussed below) applied. The 4%
    U.S.&#160;federal income tax described above is inapplicable to
    U.S.&#160;effectively connected income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the Section&#160;883 Exemption applied, a 30% branch
    profits tax imposed under Section&#160;884 of the IRC also would
    apply to the earnings that result from U.S.&#160;effectively
    connected income, and a branch interest tax could be imposed on
    certain interest paid or deemed paid. Furthermore, on the sale
    of a vessel that has produced U.S.&#160;effectively connected
    income, the net basis corporate income tax and the 30% branch
    profits tax could apply with respect to gain not in excess of
    certain prior deductions for depreciation that reduced
    U.S.&#160;effectively connected income. Otherwise, we do not
    expect U.S.&#160;federal income tax to apply with respect to
    gain realized on the sale of a vessel because it is expected
    that any sale of a vessel will be structured so that it is
    considered to occur outside of the United States and so that it
    is not attributable to an office or other fixed place of
    business in the United States.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    Section&#160;883 Exemption.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, if a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    satisfies the requirements of Section&#160;883 of the IRC and
    the regulations thereunder (or the <I>Final Section&#160;883
    Regulations</I>), it will not be subject to the 4% gross basis
    tax or the net basis tax described above on its U.S.&#160;source
    transportation income attributable to voyages that begin or end
    (but not both) in the United States (or <I>U.S.&#160;Source
    International Shipping Income</I>). As discussed below, we
    believe that under our current ownership structure, the
    Section&#160;883 Exemption will apply to our subsidiaries Arctic
    Spirit LLC and Polar Spirit LLC and would apply to us if we were
    classified as a corporation for U.S.&#160;federal income tax
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    will qualify for the Section&#160;883 Exemption if it is
    organized in a jurisdiction outside the United States that
    grants an equivalent exemption from tax to corporations
    organized in the United States (or an <I>Equivalent
    Exemption</I>), it meets one of three ownership tests (or the
    <I>Ownership Test</I>) described in the Final Section&#160;883
    Regulations, and it meets certain substantiation, reporting and
    other requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and our subsidiaries Arctic Spirit LLC and Polar Spirit LLC
    are organized under the laws of the Republic of the Marshall
    Islands. The U.S.&#160;Treasury Department has recognized the
    Republic of The Marshall Islands as a jurisdiction that grants
    an Equivalent Exemption. Consequently, the U.S.&#160;Source
    International Shipping Income of Arctic Spirit LLC and Polar
    Spirit LLC and, in the event we were treated as a corporation
    for U.S.&#160;federal income tax purposes, our U.S.&#160;Source
    International Shipping Income (including for this purpose, any
    such income earned by our subsidiaries that have properly
    elected
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to be treated as partnerships or disregarded as entities
    separate from us for U.S.&#160;federal income tax purposes),
    would be exempt from U.S.&#160;federal income taxation provided
    the Ownership Test is met. We believe that Arctic Spirit LLC and
    Polar Spirit LLC would satisfy the Ownership Test. We also
    believe that we would satisfy the Ownership Test. However, the
    determination of whether we or our subsidiaries will satisfy the
    Ownership Test at any given time depends upon a multitude of
    factors, including the relative value of our common units,
    subordinated units, general partner interest and incentive
    distribution rights, Teekay Corporation&#146;s ownership of us
    and rights to allocations and distributions from us, whether
    Teekay Corporation&#146;s stock is publicly traded, the
    concentration of ownership of Teekay Corporation&#146;s own
    stock and the satisfaction of various substantiation and
    documentation requirements. There can be no assurance that we
    would satisfy these requirements at any given time and thus that
    the U.S.&#160;Source International Shipping Income of us or of
    Arctic Spirit LLC or Polar Spirit LLC would be exempt from
    U.S.&#160;federal income taxation by reason of Section&#160;883
    in any of our taxable years.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 1%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Ratio
    of Taxable Income to Distributions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that a purchaser of common units in this offering
    who owns those common units from the date of closing of this
    offering through December&#160;31, 2011, will be allocated an
    amount of U.S.&#160;federal taxable income for that period that
    will be 20% or less of the cash distributed with respect to that
    period. We anticipate that after the taxable year ending
    December&#160;31, 2011, the ratio of allocable taxable income to
    cash distributions to the unitholders will increase. These
    estimates are based upon the assumption that gross income from
    operations will approximate the amount required to make our
    current level of distributions on all units, on the assumption
    that subsequent issuances of units, if any, during the period
    ending December&#160;31, 2011 will not be made under
    circumstances that would increase the ratio of taxable income
    allocated to units issued in this offering to distributions
    during the period ending December&#160;31, 2011 above 20%, and
    on other assumptions with respect to capital expenditures,
    foreign currency translation income, gains on foreign currency
    transactions, cash flow and anticipated cash distributions.
    These estimates and assumptions are subject to, among other
    things, numerous business, economic, regulatory, competitive and
    political uncertainties beyond our control. Further, the
    estimates are based on current U.S.&#160;federal income tax law
    and tax reporting positions that we will adopt and with which
    the IRS could disagree. Accordingly, we cannot assure you that
    the actual ratio of allocable taxable income to cash
    distributions on the common units during the period ending
    December&#160;31, 2011 will not be materially greater than our
    estimate of 20% or less. For example, the ratio of allocable
    taxable income to cash distributions could be greater, and
    perhaps substantially greater, than 20% with respect to the
    period described above if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gross income from operations exceeds the amount required to make
    our current level of distributions on all units, yet we continue
    to make distributions at the current levels;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we make a future offering of common units and use the proceeds
    of the offering in a manner that does not produce substantial
    additional deductions during the period described above, such as
    to repay indebtedness outstanding at the time of this offering
    or to acquire property that is not eligible for depreciation or
    amortization for U.S.&#160;federal income tax purposes or that
    is depreciable or amortizable, or produces deductions, at a rate
    significantly slower than the rate applicable to our assets at
    the time of this offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the ratio of allocable taxable income to cash distributions
    were materially greater than our estimate, the value of the
    common units could be materially adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocation
    of Income, Gain, Loss, Deduction and Credit.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder&#146;s taxable income or loss with respect to a
    common unit each year will depend upon a number of factors,
    including the nature and fair market value of our assets at the
    time the holder acquired the common unit, we issue additional
    units or we engage in certain other transactions, and the manner
    in which our items of income, gain, loss and deduction are
    allocated among our partners. For this purpose, we determine the
    value of our assets and the relative amounts of our items of
    income, gain, loss and deduction allocable to our unitholders
    and our general partner as holder of the incentive distribution
    rights by
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    reference to the value of our interests, including the incentive
    distribution rights. The IRS may challenge any valuation
    determinations that we make, particularly as to the incentive
    distribution rights, for which there is no public market.
    Moreover, the IRS could challenge certain other aspects of the
    manner in which we determine the relative allocations made to
    our unitholders and to the general partner as holder of our
    incentive distribution rights. A successful IRS challenge to our
    valuation or allocation methods could increase the amount of net
    taxable income and gain realized by a unitholder with respect to
    a common unit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Perkins Coie LLP is of the opinion that, with the exception of
    the issues described in the preceding paragraph,
    &#147;&#151;&#160;Asset Tax Basis, Depreciation and
    Amortization&#148; below, and in the accompanying base
    prospectus under &#147;&#151;&#160;Consequences of Unit
    Ownership&#160;&#151; Section&#160;754 Election,&#148; and
    &#147;&#151;&#160;Disposition of Common Units&#160;&#151;
    Allocations Between Transferors and Transferees,&#148;
    allocations under our partnership agreement will be given effect
    for U.S.&#160;federal income tax purposes in determining a
    partner&#146;s share of an item of income, gain, loss, deduction
    or credit.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Asset Tax
    Basis, Depreciation and Amortization</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;federal income tax consequences of the ownership
    and disposition of units will depend in part on our estimates of
    the relative fair market values, and the tax bases, of our
    assets at the time the holder acquired the common unit, we issue
    additional units or we engage in certain other transactions.
    Although we may from time to time consult with professional
    appraisers regarding valuation matters, we will make many of the
    relative fair market value estimates ourselves. These estimates
    and determinations of basis are subject to challenge and will
    not be binding on the IRS or the courts. If the estimates of
    fair market value or basis are later found to be incorrect, the
    character and amount of items of income, gain, loss, deductions
    or credits previously reported by unitholders might change, and
    unitholders might be required to adjust their tax liability for
    prior years and incur interest and penalties with respect to
    those adjustments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consequences
    of Possible PFIC Classification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A <FONT style="white-space: nowrap">non-United</FONT>
    States entity treated as a corporation for U.S.&#160;federal
    income tax purposes will be a PFIC in any taxable year in which,
    after taking into account the income and assets of the
    corporation and certain subsidiaries pursuant to a &#147;look
    through&#148; rule, either (1)&#160;at least 75% of its gross
    income is &#147;passive&#148; income (or the <I>income test</I>)
    or (2)&#160;at least 50% of the average value of its assets is
    attributable to assets that produce passive income or are held
    for the production of passive income (or the <I>assets test</I>).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not believe that we would be considered to be a PFIC even
    if we were treated as a corporation based principally on the
    position that at least a majority, if not all, of the gross
    income we derive from our time charters should constitute
    service income (which generally is not passive income), rather
    than rental income (which generally is passive income).
    Correspondingly, the assets that we own and operate in
    connection with the production of such income, in particular,
    the vessels operating under time charters, should not constitute
    passive assets for purposes of determining whether we would be a
    PFIC. However, legal uncertainties are involved in this
    determination and there is no assurance that the nature of our
    assets, income and operations will remain the same in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our subsidiaries Arctic Spirit LLC and Polar Spirit LLC will be
    classified as corporations for U.S.&#160;federal income tax
    purposes. Our counsel, Perkins Coie LLP, is of the opinion that
    neither Arctic Spirit LLC nor Polar Spirit LLC should be a PFIC
    based on certain representations that we have made to them
    regarding our relationship to Teekay Corporation, and the
    composition of the assets and the nature of the activities and
    other operations of those subsidiaries, and Teekay Corporation
    with respect to the vessels under time charters with those
    subsidiaries. However, legal uncertainties are involved in this
    determination, and there is no assurance that the IRS or a court
    would agree with the opinion we have received from Perkins Coie
    LLP. In addition, there is no assurance that our relationship to
    Teekay Corporation, the composition of the assets and the nature
    of the activities and other operations of Artic Spirit LLC or
    Polar Spirit LLC, or Teekay Corporation with respect to the
    vessels under time charters with those subsidiaries, will remain
    the same in the future.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were classified as a PFIC, for any year during which a
    unitholder owns units, we generally will be subject to special
    rules (regardless of whether we continue thereafter to be a
    PFIC) with respect to (1)&#160;any &#147;excess
    distribution&#148; (generally, any distribution received by a
    unitholder in a taxable year that is greater than 125% of the
    average annual distributions received by the unitholder in the
    three preceding taxable years or, if shorter, the
    unitholder&#146;s holding period for the units) and (2)&#160;any
    gain realized upon the sale or other disposition of units. Under
    these rules:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The excess distribution or gain will be allocated ratably over
    the unitholder&#146;s holding period;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The amount allocated to the current taxable year and any year
    prior to the first year in which we were a PFIC will be taxed as
    ordinary income in the current year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The amount allocated to each of the other taxable years in the
    unitholder&#146;s holding period will be subject to
    U.S.&#160;federal income tax at the highest rate in effect for
    the applicable class of taxpayer for that year;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an interest charge for the deemed deferral benefit will be
    imposed with respect to the resulting tax attributable to each
    of these other taxable years.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of our subsidiaries were to be classified as PFIC,
    similar rules would apply to the extent of distributions
    received by us from these entities or to the extent gain
    realized by unitholder is attributable to these entities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain elections, such as a qualified electing fund (or
    <I>QEF</I>) election or mark to market election, may be
    available to a unitholder if we or any of our subsidiaries
    Arctic Spirit LLC or Polar Spirit LLC were classified as a PFIC.
    If we determine that we or any of such subsidiaries is or will
    be a PFIC, we will provide unitholders with information
    concerning the potential availability of such elections.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under current law, dividends received by individual citizens or
    residents of the United States from domestic corporations and
    qualified foreign corporations generally are treated as net
    capital gains and subject to U.S.&#160;federal income tax at
    reduced rates (generally 15%). However, if we are classified as
    a PFIC for the taxable year in which a dividend is paid, we
    would not be considered a qualified foreign corporation and the
    dividends received from us would not be eligible for the reduced
    rate of U.S.&#160;federal income tax.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Citigroup Global Markets Inc. and Wachovia Capital Markets, LLC
    are acting as joint book-running managers of this offering and
    as representatives for the other underwriters named below.
    Subject to the terms and conditions stated in the underwriting
    agreement, dated the date of this prospectus supplement, each
    underwriter named below has severally agreed to purchase, and we
    have agreed to sell to that underwriter, the number of common
    units set forth opposite the underwriter&#146;s name.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="86%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Units</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Citigroup Global Markets Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Wachovia Capital Markets, LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    UBS Securities LLC.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond James&#160;&#038; Associates, Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deutsche Bank Securities Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dahlman Rose&#160;&#038; Company, LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The business address of Citigroup Global Markets Inc. is 388
    Greenwich Street, New York, New York 10013, and of Wachovia
    Capital Markets, LLC is 375 Park Avenue, New York, NY 10152.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Concurrently with our offering to the public, we are selling an
    aggregate of $50.0&#160;million of unregistered common units to
    Teekay Corporation or its designee at the public offering price,
    subject to and at the closing of this offering. We refer to this
    sale as the concurrent sale. We are selling these units directly
    to the purchaser and not through underwriters or any brokers or
    dealers. The units sold to the purchaser in the concurrent sale
    will not be subject to any underwriting discounts or
    commissions. Pursuant to our partnership agreement, we are
    required to register under the Securities Act of 1933 the common
    units sold to Teekay Corporation or its designee under certain
    circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriting agreement provides that the obligations of the
    underwriters to purchase the units included in this offering are
    subject to approval of legal matters by counsel and to other
    conditions. The underwriters are obligated to purchase all the
    units (other than those covered by their option to purchase
    additional units described below) if they purchase any of the
    units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters propose to offer some of the common units
    directly to the public at the public offering price set forth on
    the cover page of this prospectus supplement and some of the
    common units to dealers at the public offering price less a
    concession not to exceed $&#160;&#160;&#160;&#160;&#160; per
    common unit. If all of the common units are not sold at the
    initial offering price, the representatives may change the
    public offering price and the other selling terms.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted to the underwriters an option, exercisable for
    30&#160;days from the date of this prospectus supplement, to
    purchase up to 750,000 additional common units at the public
    offering price less the underwriting discount. The underwriters
    may exercise the option solely for the purpose of covering
    over-allotments, if any, in connection with this offering. To
    the extent the option is exercised, each underwriter must
    purchase a number of additional units approximately
    proportionate to that underwriter&#146;s initial purchase
    commitment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We, together with our general partner, Teekay Corporation, and
    the executive officers and directors of our general partner have
    agreed that, for a period of 60&#160;days from the date of this
    prospectus supplement, we and they will not, without the prior
    written consent of Citigroup Global Markets Inc. and Wachovia
    Capital Markets, LLC, dispose of or hedge any of our common
    units or any securities convertible into or exchangeable for our
    common units. Citigroup Global Markets Inc. and Wachovia Capital
    Markets, LLC in their sole discretion may release any of the
    securities subject to these
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements at any time without notice.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units are traded on the New York Stock Exchange under
    the symbol &#147;TGP.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table summarizes the underwriting discounts and
    commissions we will pay to the underwriters in connection with
    this offering. These amounts are shown assuming both no exercise
    and full exercise of the underwriters&#146; option to purchase
    additional common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="77%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="4%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>No Exercise</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Full Exercise</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Per unit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the offering, the representatives, on behalf
    of the underwriters, may purchase and sell common units in the
    open market. These transactions may include short sales,
    syndicate covering transactions and stabilizing transactions.
    Short sales involve syndicate sales of common units in excess of
    the number of units to be purchased by the underwriters in the
    offering, which creates a syndicate short position.
    &#147;Covered&#148; short sales are sales of units made in an
    amount up to the number of units represented by the
    underwriters&#146; over-allotment option. In determining the
    source of units to close out the covered syndicate short
    position, the underwriters will consider, among other things,
    the price of units available for purchase in the open market as
    compared to the price at which they may purchase units through
    their option to purchase common units through the over-allotment
    option. Transactions to close out the covered syndicate short
    position involve either purchases of the common units in the
    open market after the distribution has been completed or the
    exercise of the over-allotment option. The underwriters may also
    make &#147;naked&#148; short sales of units in excess of the
    over-allotment option. The underwriters must close out any naked
    short position by purchasing common units in the open market. A
    naked short position is more likely to be created if the
    underwriters are concerned that there may be downward pressure
    on the price of the units in the open market after pricing that
    could adversely affect investors who purchase in the offering.
    Stabilizing transactions consist of bids for or purchases of
    units in the open market while the offering is in progress.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters also may impose a penalty bid. Penalty bids
    permit the underwriters to reclaim a selling concession from a
    syndicate member when an underwriter repurchases units
    originally sold by that syndicate member in order to cover
    syndicate short positions or make stabilizing purchases.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any of these activities may have the effect of preventing or
    retarding a decline in the market price of the common units.
    They may also cause the price of the common units to be higher
    than the price that would otherwise exist in the open market in
    the absence of these transactions. The underwriters may conduct
    these transactions on the New York Stock Exchange or in the
    over-the-counter market, or otherwise. If the underwriters
    commence any of these transactions, they may discontinue them at
    any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The compensation received by the underwriters in connection with
    this common unit offering will not exceed 10% of the gross
    proceeds from this common unit offering for commissions and 0.5%
    for due diligence.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that our portion of the total expenses of this
    offering will be approximately $385,000 (exclusive of
    underwriting discounts and commissions).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because the Financial Industry Regulatory Authority views the
    common units offered hereby as interests in a direct
    participation program, the offering is being made in compliance
    with Rule&#160;2810 of the NASD Conduct Rules. Investor
    suitability with respect to the common units should be judged
    similarly to the suitability with respect to other securities
    that are listed for trading on a national securities exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters and their related entities have engaged and may
    engage in commercial and investment banking transactions with
    Teekay Corporation and its affiliates, our general partner and
    us in the ordinary course of its business. They have received
    and may receive customary compensation and expenses for these
    commercial and investment banking transactions. Certain of the
    underwriters participated in the initial public offering of
    Teekay Tankers Ltd., a subsidiary of Teekay Corporation, in
    December 2007. In addition, certain of the underwriters
    participated in our follow-on offering in May 2007.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus in electronic format may be made available on the
    websites maintained by one or more of the underwriters. The
    representatives may agree to allocate a number of common units
    to underwriters for sale to their online brokerage account
    holders. The representatives will allocate units to underwriters
    that may make Internet distributions on the same basis as other
    allocations. In addition, common units may be sold by the
    underwriters to securities dealers who resell units to online
    brokerage account holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other than the prospectus in electronic format, the information
    on any underwriter&#146;s or selling group member&#146;s website
    and any information contained in any other website maintained by
    any underwriter or selling group member is not part of the
    prospectus or the registration statement of which this
    prospectus supplement forms a part, has not been approved
    <FONT style="white-space: nowrap">and/or</FONT>
    endorsed by us or any underwriter or selling group member in its
    capacity as underwriter or selling group member and should not
    be relied upon by investors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to indemnify the underwriters against certain
    liabilities, including liabilities under the Securities Act of
    1933, or to contribute to payments that may be required to be
    made in respect of these liabilities.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SERVICE
    OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Partners L.P. is organized under the laws of the
    Marshall Islands as a limited partnership. Our general partner
    is organized under the laws of the Marshall Islands as a limited
    liability company. The Marshall Islands has a less developed
    body of securities laws as compared to the United States and
    provides protections for investors to a significantly lesser
    extent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Most of the directors and officers of our general partner and
    those of our subsidiaries are residents of countries other than
    the United States. Substantially all of our and our
    subsidiaries&#146; assets and a substantial portion of the
    assets of the directors and officers of our general partner are
    located outside the United States. As a result, it may be
    difficult or impossible for United States investors to effect
    service of process within the United States upon us, our general
    partner, our subsidiaries or the directors and officers of our
    general partner or to realize against us or them judgments
    obtained in United States courts, including judgments predicated
    upon the civil liability provisions of the securities laws of
    the United States or any state in the United States. However, we
    have expressly submitted to the jurisdiction of the
    U.S.&#160;federal and New York state courts sitting in the City
    of New York for the purpose of any suit, action or proceeding
    arising under the securities laws of the United States or any
    state in the United States, and we have appointed Watson,
    Farley&#160;&#038; Williams (New York) LLP to accept service of
    process on our behalf in any such action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Watson, Farley&#160;&#038; Williams (New York) LLP, our counsel
    as to Marshall Islands law, has advised us that there is
    uncertainty as to whether the courts of the Marshall Islands
    would (1)&#160;recognize or enforce against us, our general
    partner or our general partner&#146;s directors or officers
    judgments of courts of the United States based on civil
    liability provisions of applicable U.S.&#160;federal and state
    securities laws or (2)&#160;impose liabilities against us, our
    general partner or our general partner&#146;s directors and
    officers in original actions brought in the Marshall Islands,
    based on these laws.
</DIV>
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The validity of the common units offered hereby and certain
    other legal matters with respect to the laws of the Republic of
    The Marshall Islands will be passed upon for us by our counsel
    as to Marshall Islands law, Watson, Farley&#160;&#038; Williams
    (New York) LLP. Certain other legal matters will be passed upon
    for us by Perkins Coie LLP, Portland, Oregon, which may rely on
    the opinions of Watson, Farley&#160;&#038; Williams (New York)
    LLP for all matters of Marshall Islands Law. Baker Botts L.L.P.,
    Houston Texas, will pass upon certain legal matters in
    connection with the offering on behalf of the underwriters.
</DIV>
<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements of Teekay LNG Partners
    appearing in its Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the year ended December&#160;31, 2007, and the effectiveness
    of Teekay LNG Partners&#146; internal controls over financial
    reporting as of December&#160;31, 2007, have been audited by
    Ernst&#160;&#038; Young LLP, an independent registered public
    accounting firm, as set forth in their reports thereon included
    therein, and incorporated herein by reference. Such financial
    statements are incorporated herein in reliance upon the reports
    of Ernst&#160;&#038; Young LLP pertaining to such financial
    statements and the effectiveness of our internal control over
    financial reporting as of December&#160;31, 2007, given on the
    authority of such firm as experts in accounting and auditing.
    You may contact Ernst&#160;&#038; Young LLP at address
    700&#160;West Georgia Street, Vancouver, British Columbia, V7Y
    1C7, Canada.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth costs and expenses, other than
    any underwriting discounts and commissions, we expect to incur
    in connection with the issuance and distribution of the common
    units covered by this prospectus. Other than the
    U.S.&#160;Securities and Exchange Commission registration fee
    which is set forth in the base prospectus, all amounts are
    estimated.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    300,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer agent fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    385,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 93%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">$400,000,000</FONT></B>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o40020o4002099.gif" alt="(TEEKAY LNG PARTNERS L.P. LOGO)"><B><FONT style="font-size: 18pt">
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 30pt">Teekay LNG Partners
    L.P.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 30pt">Teekay LNG Finance
    Corp.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=72 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Common Units</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Debt Securities</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=456 length=72 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer, from time to time:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    common units, representing limited partnership interests in
    Teekay LNG Partners L.P.;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    debt securities, which may be secured or unsecured senior debt
    securities or secured or unsecured subordinated debt securities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Finance Corp. may act as co-issuer of the debt
    securities, and other direct or indirect subsidiaries of Teekay
    LNG Partners L.P. may guarantee the debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The securities we may offer:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will have a maximum aggregate offering price of $400,000,000;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will be offered at prices and on terms to be set forth in one or
    more accompanying prospectus supplements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    may be offered separately or together, or in separate series.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer these securities directly or to or through
    underwriters, dealers or other agents. The names of any
    underwriters or dealers will be set forth in the applicable
    prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units trade on the New York Stock Exchange under the
    symbol &#147;TGP.&#148; We will provide information in the
    prospectus supplement for the trading market, if any, for any
    debt securities we may offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus provides you with a general description of the
    securities we may offer. Each time we offer to sell securities
    we will provide a prospectus supplement that will contain
    specific information about those securities and the terms of
    that offering. The prospectus supplement may also add, update or
    change information contained in this prospectus. This prospectus
    may be used to offer and sell securities only if accompanied by
    a prospectus supplement. You should read this prospectus and any
    prospectus supplement carefully before you invest. You should
    also read the documents we refer to in the &#147;Where You Can
    Find More Information&#148; section of this prospectus for
    information about us and our financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 5%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Limited partnerships are inherently different than
    corporations. You should carefully consider each of the factors
    described under &#147;Risk Factors&#148; beginning on
    page&#160;7 of this prospectus before you make an investment in
    our securities.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    September&#160;29, 2006
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="96%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'><B>About This Prospectus</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'><B>Teekay LNG Partners L.P.</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#103'>Partnership Structure and Management</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'><B>Teekay LNG Finance Corp.</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'><B>Subsidiary Guarantors</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'><B>Where You Can Find More Information</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'><B>Forward-Looking Statements</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'><B>Risk Factors</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#109'>Risks Inherent in Our Business</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#110'>Risks Inherent in an Investment in Us</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#111'>Risks Relating to the Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#112'>Risks Relating to the Debt Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#113'>Tax Risks</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'><B>Use of Proceeds</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'><B>Ratio of Earnings To Fixed Charges</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#177'><B>Price Range of Common Units and
    Distributions</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'><B>Description of The Common Units</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#117'>Number of Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#118'>Issuance of Additional Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#119'>Meetings; Voting</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#120'>Call Right</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#121'>Exchange Listing</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#122'>Transfer Agent and Registrar</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#123'>Transfer of Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#178'>Other Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#124'>Summary of Our Partnership Agreement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#125'><B>Cash Distributions</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#126'>Distributions of Available Cash</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#127'>Operating Surplus and Capital Surplus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#128'>Subordination Period</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#129'>Distributions of Available Cash From Operating
    Surplus During the Subordination Period</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#130'>Distributions of Available Cash From Operating
    Surplus After the Subordination Period</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#131'>Incentive Distribution Rights</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#132'>Percentage Allocations of Available Cash From
    Operating Surplus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#133'>Distributions From Capital Surplus</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#134'>Adjustment to the Minimum Quarterly Distribution
    and Target Distribution Levels</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#135'>Distributions of Cash Upon Liquidation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#136'><B>Description of Debt Securities</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#137'>General</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#138'>Specific Terms of Each Series of Debt Securities
    to be Described in the Prospectus Supplement</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#139'>Subsidiary Guarantees</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#140'>Consolidation, Merger or Asset Sale</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="96%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#141'>No Protection in the Event of a Change of
    Control</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#142'>Modification of Indentures</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#143'>Events of Default and Remedies</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#145'>Defeasance</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#146'>No Limit on Amount of Debt Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    53
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#147'>Registration of Notes</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#148'>Minimum Denominations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#149'>No Personal Liability</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#150'>Payment and Transfer</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#151'>Exchange, Registration and Transfer</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#152'>Provisions Relating Only to the Senior Debt
    Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#153'>Provisions Relating Only to the Subordinated Debt
    Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#154'>Book Entry, Delivery and Form</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#155'>Governing Law</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#156'>The Trustee</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#157'><B>Material U.S.&#160;Federal Income Tax
    Consequences</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#158'>Classification as a Partnership</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#159'>Status as a Partner</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#160'>Consequences of Unit Ownership</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#161'>Tax Treatment of Operations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#162'>Disposition of Common Units</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#163'>Foreign Tax Credit Considerations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#164'>Tax-Exempt Organizations and
    <FONT style="white-space: nowrap">Non-U.S.&#160;Investors</FONT></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#165'>Functional Currency</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    68
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#166'>Administrative Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#167'>Possible Classification as a Corporation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#168'>Tax Consequences of Ownership of Debt
    Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#169'><B>Non-United States Tax Consequences</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#170'>Marshall Islands Tax Consequences</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <A HREF='#171'>Canadian Federal Income Tax Consequences</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#172'><B>Plan Of Distribution</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#173'><B>Service of Process and Enforcement of Civil
    Liabilities</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#174'><B>Legal</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#175'><B>Experts</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#176'><B>Expenses</B></A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=72 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information contained in this
    prospectus, any prospectus supplement and the documents
    incorporated by reference in this prospectus. We have not
    authorized anyone else to give you different information. If
    anyone provides you with different or inconsistent information,
    you should not rely on it. We are not offering these securities
    in any jurisdiction where the offer or sale is not permitted.
    You should not assume that the information in this prospectus or
    any prospectus supplement is accurate as of any date other than
    the date on the front of those documents. We will disclose
    material changes in our affairs in an amendment to this
    prospectus, a prospectus supplement or a future filing with the
    U.S.&#160;Securities and Exchange Commission incorporated by
    reference in this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ABOUT
    THIS PROSPECTUS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-3</FONT>
    that we have filed with the U.S.&#160;Securities and Exchange
    Commission (or <I>SEC</I>) using a &#147;shelf&#148;
    registration process. Under this shelf registration process, we
    may sell, in one or more offerings, up to $400,000,000 in total
    aggregate offering price of the securities described in this
    prospectus. This prospectus generally describes us and the
    securities we may offer. Each time we offer securities with this
    prospectus, we will provide this prospectus and a prospectus
    supplement that will describe, among other things, the specific
    amounts and prices of the securities being offered and the terms
    of the offering, including, in the case of debt securities, the
    specific terms of the securities. The prospectus supplement may
    also add to, update or change information in this prospectus. If
    there is any inconsistency between the information in this
    prospectus and any prospectus supplement, you should rely on the
    information in the prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, references in this prospectus to
    &#147;Teekay LNG Partners,&#148; &#147;we,&#148; &#147;us&#148;
    and &#147;our&#148; and similar terms refer to Teekay LNG
    Partners&#160;L.P. and/or one or more of its subsidiaries,
    except that those terms, when used in this prospectus in
    connection with the common units described herein, shall mean
    Teekay LNG Partners&#160;L.P. References in this prospectus to
    &#147;Teekay Shipping Corporation&#148; refer to Teekay Shipping
    Corporation and/or any one or more of its subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise indicated, all references in this prospectus to
    &#147;dollars&#148; and &#147;$&#148; are to, and amounts are
    presented in, U.S.&#160;Dollars, and financial information
    presented in this prospectus is prepared in accordance with
    accounting principles generally accepted in the United States
    (or <I>GAAP</I>).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information in this prospectus is accurate as of its date.
    You should read carefully this prospectus, any prospectus
    supplement, and the additional information described below under
    the heading &#147;Where You Can Find More Information.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TEEKAY
    LNG PARTNERS L.P.</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Partners L.P. is an international provider of
    liquefied natural gas (or <I>LNG</I>) and crude oil marine
    transportation services. In November&#160;2004, we were formed
    as a Marshall Islands limited partnership by Teekay Shipping
    Corporation, the world&#146;s largest owner and operator of
    medium-sized crude oil tankers, to expand its operations in the
    LNG shipping sector. Our growth strategy focuses on expanding
    our fleet of LNG carriers under long-term, fixed-rate charters.
    We view our Suezmax tanker fleet primarily as a source of stable
    cash flow as we expand our LNG operations. We seek to leverage
    the expertise, relationships and reputation of Teekay Shipping
    Corporation and its affiliates to pursue growth opportunities in
    the LNG shipping sector. Teekay Shipping Corporation currently
    owns our general partner and a 67.8% limited partner interest in
    us.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our fleet, excluding newbuilding vessels, currently consists of
    four LNG carriers and eight Suezmax class crude oil tankers, all
    of which are double-hulled. These vessels operate under
    long-term, fixed-rate time charter contracts with major energy
    and utility companies. As of September&#160;1, 2006, the average
    remaining term for these charters was approximately
    19&#160;years for our LNG carriers and approximately
    13&#160;years for our Suezmax tankers, subject, in certain
    circumstances, to termination or vessel purchase rights. We have
    agreed to purchase from Teekay Shipping Corporation its rights
    to three newbuilding LNG&#160;carriers under capital leases upon
    the delivery of the first vessel, which is scheduled during the
    fourth quarter of 2006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<A name='103'>
<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Partnership
    Structure and Management</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operations are conducted through, and our operating assets
    are owned by, our subsidiaries. We own our interests in our
    subsidiaries through our 100% ownership interest in our
    operating company, Teekay&#160;LNG Operating&#160;L.L.C., a
    Marshall Islands limited liability company. Our general partner,
    Teekay&#160;GP&#160;L.L.C., a Marshall Islands limited liability
    company, has an economic interest in us and manages our
    operations and activities. Our general partner does not receive
    any management fee or other compensation in connection with its
    management of our business, but it is entitled to be reimbursed
    for all direct and indirect expenses incurred on our behalf.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal executive offices are located at Bayside House,
    Bayside Executive Park, West Bay Street and Blake Road, P.O.
    Box&#160;AP-59212, Nassau, Commonwealth of the Bahamas, and our
    phone number is (242)&#160;502-8820.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<A name='104'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TEEKAY
    LNG FINANCE CORP.</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Finance Corp. is a Marshall Islands corporation and
    wholly owned subsidiary of Teekay LNG Partners. It has nominal
    assets and its activities will be limited to co-issuing debt
    securities that Teekay LNG Partners may offer and engaging in
    other activities incidental thereto. Teekay LNG Finance Corp.
    may act as co-issuer of debt securities to allow investment in
    those securities by institutional investors that may not
    otherwise be able to invest due to our structure and investment
    restrictions under their respective states of organization or
    charters. You should not expect Teekay LNG Finance Corp. to be
    able to service obligations on any debt securities for which it
    may act as co-issuer.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>
<A name='105'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUBSIDIARY
    GUARANTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, Teekay LNG Partners owns,
    directly or indirectly, 100% of the outstanding ownership
    interests of the following subsidiaries, among others: Teekay
    LNG Operating&#160;L.L.C., African Spirit L.L.C., Asian Spirit
    L.L.C., European Spirit L.L.C., Teekay Luxembourg&#160;S.a.r.l.,
    Teekay Spain,&#160;S.L., Teekay&#160;II Iberia&#160;S.L., Teekay
    Shipping Spain,&#160;S.L., Naviera Teekay Gas,&#160;S.L.,
    Naviera Teekay Gas&#160;II,&#160;S.L., Naviera Teekay
    Gas&#160;III,&#160;S.L. and Naviera Teekay
    Gas&#160;IV,&#160;S.L. If specified in the prospectus supplement
    for a series of debt securities offered by this prospectus, the
    subsidiaries of Teekay LNG Partners&#160;L.P. specified in the
    prospectus supplement will unconditionally guarantee, on a joint
    and several basis, the full and prompt payment of principal of,
    premium, if any, and interest on the debt securities of that
    series. Occasionally in this prospectus we refer to Teekay LNG
    Partner&#146;s subsidiaries that may provide these guarantees as
    the &#147;Subsidiary Guarantors,&#148; which term will also
    include any other subsidiaries of Teekay LNG Partners that may
    hereafter be added to the registration statement of which this
    prospectus is a part and may provide such guarantees.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;F-3</FONT>
    regarding the securities covered by this prospectus. This
    prospectus does not contain all of the information found in the
    registration statement. For further information regarding us and
    the securities offered in this prospectus, you may wish to
    review the full registration statement, including its exhibits.
    The registration statement, including the exhibits, may be
    inspected and copied at the public reference facilities
    maintained by the SEC at 100 F Street, NE, Washington,&#160;D.C.
    20549. Copies of this material can also be obtained upon written
    request from the Public Reference Section of the SEC at that
    address, at prescribed rates, or from the SEC&#146;s web site on
    the Internet at <U>www.sec.gov</U> free of charge. Please call
    the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0330</FONT>
    for further information on public reference rooms. Our
    registration statement can also be inspected and copied at the
    offices of the New York Stock Exchange, Inc., 20&#160;Broad
    Street, New York, New York 10005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to the information requirements of the U.S.
    Securities Exchange Act of 1934 (or the <I>Exchange Act</I>),
    and, in accordance therewith, we are required to file with the
    SEC annual reports on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    within six months of our fiscal year-end, and provide to the SEC
    other material information on
    <FONT style="white-space: nowrap">Form&#160;6-K.</FONT>
    We intend to file our annual report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    earlier than the SEC currently requires. These reports and other
    information may be inspected and copied at the public reference
    facilities maintained by the SEC or obtained from the SEC&#146;s
    website as provided above. Our website on the Internet is
    located at <U>www.teekaylng.com</U>, and we expect to make our
    periodic reports and other information filed with or furnished
    to the SEC available, free of charge, through our website, as
    soon as reasonably practicable after those reports and other
    information are electronically filed with or furnished to the
    SEC. Information on our website or any other website is not
    incorporated by reference into this prospectus and does not
    constitute a part of this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a foreign private issuer, we are exempt under the Exchange
    Act from, among other things, certain rules prescribing the
    furnishing and content of proxy statements, and our executive
    officers, directors and principal unitholders are exempt from
    the reporting and short-swing profit recovery provisions
    contained in Section&#160;16 of the Exchange Act. In addition,
    we are not required under the Exchange Act to file periodic
    reports and financial statements with the SEC as frequently or
    as promptly as U.S.&#160;companies whose securities are
    registered under the Exchange Act, including the filing of
    quarterly reports or current reports on
    <FONT style="white-space: nowrap">Form&#160;8-K.</FONT>
    However, we intend to make available quarterly reports
    containing our unaudited interim financial information for the
    first three fiscal quarters of each fiscal year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The SEC allows us to &#147;incorporate by reference&#148; into
    this prospectus information that we file with the SEC. This
    means that we can disclose important information to you without
    actually including the specific information in this prospectus
    by referring you to other documents filed separately with the
    SEC. The information incorporated by reference is an important
    part of this prospectus. Information that we later provide to
    the SEC, and which is deemed to be &#147;filed&#148; with the
    SEC, automatically will update information previously filed with
    the SEC, and may replace information in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We incorporate by reference into this prospectus the documents
    listed below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the fiscal year ended December&#160;31, 2005;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all subsequent Annual Reports on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    filed prior to the termination of this offering;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our current Reports on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    furnished on May&#160;17 and August&#160;17, 2006;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all subsequent Reports on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    furnished prior to the termination of this offering that we
    identify in such Reports as being incorporated by reference into
    the registration statement of which this prospectus is a
    part;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the description of our common units contained in our
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;8-A/A</FONT>
    filed on September&#160;29, 2006, including any subsequent
    amendments or reports filed for the purpose of updating such
    description.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These reports contain important information about us, our
    financial condition and our results of operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may obtain any of the documents incorporated by reference in
    this prospectus from the SEC through its public reference
    facilities or its website at the addresses provided above. You
    also may request a copy of any document incorporated by
    reference in this prospectus (excluding any exhibits to those
    documents, unless the exhibit is specifically incorporated by
    reference in this document), at no cost, by visiting our
    Internet website at <U>www.teekaylng.com</U>, or by writing or
    calling us at the following address:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Partners L.P.
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Bayside House, Bayside Executive Park
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    West Bay Street and Blake Road
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    P.O. Box&#160;AP-59212
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Nassau, Commonwealth of the Bahamas
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attn: Corporate Secretary
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (242)&#160;502-8820
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information incorporated by
    reference or provided in this prospectus or any prospectus
    supplement. We have not authorized anyone else to provide you
    with any information. You should not assume that the information
    incorporated by reference or provided in this prospectus or any
    prospectus supplement is accurate as of any date other than the
    date on the front of each document.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FORWARD-LOOKING
    STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All statements, other than statements of historical fact,
    included in or incorporated by reference into this prospectus
    and any prospectus supplements are forward-looking statements.
    In addition, we and our representatives may from time to time
    make other oral or written statements that also forward-looking
    statements. Such statements include, in particular, statements
    about our plans, strategies, business prospects, changes and
    trends in our business, and the markets in which we operate. In
    some cases, you can identify the forward-looking statements by
    the use of words such as &#147;may,&#148; &#147;will,&#148;
    &#147;could,&#148; &#147;should,&#148; &#147;would,&#148;
    &#147;expect,&#148; &#147;plan,&#148; &#147;anticipate,&#148;
    &#147;intend,&#148; &#147;forecast,&#148; &#147;believe,&#148;
    &#147;estimate,&#148; &#147;predict,&#148; &#147;propose,&#148;
    &#147;potential,&#148; &#147;continue&#148; or the negative of
    these terms or other comparable terminology.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Forward-looking statements include statements with respect to,
    among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to make cash distributions on our common units or
    any increases in our quarterly distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to make required payments on any debt securities we
    may issue;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our future financial condition or results of operations and our
    future revenues and expenses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    global growth prospects of the LNG shipping and tanker markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    LNG and tanker market fundamentals, including the balance of
    supply and demand in the LNG and tanker market;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expected lifespan of a new LNG carrier and Suezmax tanker;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    planned and estimated future capital expenditures and
    availability of capital resources to fund capital expenditures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to maintain long-term relationships with major LNG
    importers and exporters and major crude oil companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to leverage to our advantage Teekay Shipping
    Corporation&#146;s relationships and reputation in the shipping
    industry;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our continued ability to enter into long-term, fixed-rate time
    charters with our LNG customers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    obtaining LNG projects that we or Teekay Shipping Corporation
    bid on or have been awarded;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to maximize the use of our vessels, including the
    re-deployment or disposition of vessels no longer under
    long-term charter;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expected purchases and deliveries of newbuilding vessels and
    commencement of service of newbuildings under long-term
    contracts, including those relating to LNG projects that have
    been awarded to Teekay Shipping Corporation and will be offered
    to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expected timing, amount and method of financing for the
    purchase of five of our existing Suezmax tankers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our expected financial flexibility to pursue acquisitions and
    other expansion opportunities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expected cost of, and our ability to comply with,
    governmental regulations and maritime self-regulatory
    organization standards applicable to our business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expected impact of heightened environmental and quality
    concerns of insurance underwriters, regulators and charterers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the anticipated taxation of our partnership and its subsidiaries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    entering into credit facilities or vessel financing arrangements
    for any of our vessels, and the effects of such
    arrangements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our business strategy and other plans and objectives for future
    operations.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These and other forward-looking statements are subject to risks,
    uncertainties and assumptions, including those risks discussed
    in &#147;Risk Factors&#148; below and those risks discussed in
    other reports we file with the SEC and that are incorporated in
    this prospectus by reference. The risks, uncertainties and
    assumptions involve known and unknown risks and are inherently
    subject to significant uncertainties and contingencies, many of
    which are beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Forward-looking statements are made based upon management&#146;s
    current plans, expectations, estimates, assumptions and beliefs
    concerning future events affecting us and, therefore, involve a
    number of risks and uncertainties, including those risks
    discussed in &#147;Risk Factors.&#148; We caution that
    forward-looking statements are not guarantees and that actual
    results could differ materially from those expressed or implied
    in the forward-looking statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We undertake no obligation to update any forward-looking
    statement to reflect events or circumstances after the date on
    which such statement is made or to reflect the occurrence of
    unanticipated events. New factors emerge from time to time, and
    it is not possible for us to predict all of these factors.
    Further, we cannot assess the effect of each such factor on our
    business or the extent to which any factor, or combination of
    factors, may cause actual results to be materially different
    from those contained in any forward-looking statement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Although many of our business risks are comparable to those a
    corporation engaged in a similar business would face, limited
    partner interests are inherently different from the capital
    stock of a corporation. You should carefully consider the
    following risk factors together with all of the other
    information included or incorporated in this prospectus when
    evaluating an investment in our common units or debt
    securities.</I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>If any of the following risks actually occur, our business,
    financial condition or operating results could be materially
    harmed. In that case, our ability to pay distributions on our
    common units or pay interest on, or principal of, any debt
    securities, may be reduced, the trading price of our securities
    could decline, and you could lose all or part of your
    investment.</I>
</DIV>
<A name='109'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Inherent in Our Business</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not have sufficient cash from operations to enable us to make
    required payments on our debt securities or to pay the minimum
    quarterly distribution on our common units following the
    establishment of cash reserves and payment of fees and
    expenses.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may not have sufficient cash available to make required
    payments on our debt securities or to pay the minimum quarterly
    distribution on our common units. The amount of cash we have
    available to make required payments on our debt securities or to
    distribute on our common units principally depends upon the
    amount of cash we generate from our operations, which may
    fluctuate based on, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the rates we obtain from our charters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of our operating costs, such as the cost of crews and
    insurance;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the continued availability of LNG production, liquefaction and
    regasification facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the number of unscheduled off-hire days for our fleet and the
    timing of, and number of days required for, scheduled drydocking
    of our vessels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    delays in the delivery of newbuildings and the beginning of
    payments under charters relating to those vessels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prevailing global and regional economic and political conditions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    currency exchange rate fluctuations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the effect of governmental regulations and maritime
    self-regulatory organization standards on the conduct of our
    business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The actual amount of cash we will have available for required
    payments on our debt securities and distributions on our common
    units also will depend on factors such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the level of capital expenditures we make, including for
    maintaining vessels, building new vessels, acquiring existing
    vessels and complying with regulations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our debt service requirements and restrictions on payments and
    distributions contained in our debt instruments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in our working capital needs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to make working capital borrowings, including to pay
    distributions to unitholders;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of any cash reserves, including reserves for future
    capital expenditures and other matters, established by our
    general partner in its discretion.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The amount of cash we generate from our operations may differ
    materially from our profit or loss for the period, which will be
    affected by non-cash items. As a result of this and the other
    factors mentioned above, we may make cash distributions during
    periods when we record losses and may not make cash
    distributions during periods when we record net income.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    make substantial capital expenditures to maintain the operating
    capacity of our fleet, which reduce our cash available to make
    required payments on our debt securities and for distribution on
    our common units. In addition, each quarter our general partner
    is required to deduct estimated maintenance capital expenditures
    from operating surplus, which may result in less cash available
    to unitholders than if actual maintenance capital expenditures
    were deducted.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We must make substantial capital expenditures to maintain, over
    the long term, the operating capacity of our fleet. These
    maintenance capital expenditures include capital expenditures
    associated with drydocking a vessel, modifying an existing
    vessel or acquiring a new vessel to the extent these
    expenditures are incurred to maintain the operating capacity of
    our fleet. These expenditures could increase as a result of
    changes in:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of labor and materials;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    customer requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increases in the size of our fleet;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    governmental regulations and maritime self-regulatory
    organization standards relating to safety, security or the
    environment;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competitive standards.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our significant maintenance capital expenditures will reduce the
    amount of cash we have available to make required payments on
    our debt securities and for distribution to our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our actual maintenance capital expenditures vary
    significantly from quarter to quarter based on, among other
    things, the number of vessels drydocked during that quarter. Our
    partnership agreement requires our general partner to deduct
    estimated, rather than actual, maintenance capital expenditures
    from operating surplus each quarter in an effort to reduce
    fluctuations in operating surplus. The amount of estimated
    maintenance capital expenditures deducted from operating surplus
    is subject to review and change by the conflicts committee of
    our general partner at least once a year. In years when
    estimated maintenance capital expenditures are higher than
    actual maintenance capital expenditures&#160;&#151; as we expect
    will be the case in the years we are not required to make
    expenditures for mandatory drydockings&#160;&#151; the amount of
    cash available for distribution to unitholders will be lower
    than if actual maintenance capital expenditures were deducted
    from operating surplus. If our general partner underestimates
    the appropriate level of estimated maintenance capital
    expenditures, we may have less cash available for distribution
    in future periods when actual capital expenditures begin to
    exceed our previous estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will be required to make substantial capital expenditures to
    expand the size of our fleet. We generally will be required to
    make significant installment payments for acquisitions of
    newbuilding vessels prior to their delivery and generation of
    revenue. Depending on whether we finance our expenditures
    through cash from operations or by issuing debt or equity
    securities, our ability to make required payments on our debt
    securities and cash distributions on our common units may be
    diminished or our financial leverage could increase or our
    unitholders could be diluted.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to make substantial capital expenditures to increase
    the size of our fleet, particularly the number of LNG carriers
    we own.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During May 2005, we entered into an agreement with Teekay
    Shipping Corporation to purchase its 70% interest in Teekay
    Nakilat Corporation. Our estimated purchase commitment is
    $92.8&#160;million. Teekay Nakilat Corporation has a
    <FONT style="white-space: nowrap">30-year</FONT>
    capital lease arrangement on three LNG carriers currently under
    construction. The purchase will occur upon the delivery of the
    first LNG newbuilding carrier under lease, which is scheduled
    during the fourth quarter of 2006.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we are obligated to purchase five of our existing
    Suezmax tankers upon the termination of the related capital
    leases, which will occur at various times from 2007 to 2010. The
    purchase price will be based on the unamortized portion of the
    vessel construction financing costs for the vessels, which we
    expect
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to range from $39.4&#160;million to $41.9&#160;million per
    vessel. We expect to finance these purchases by assuming the
    existing vessel financing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and Teekay Shipping Corporation regularly evaluate and pursue
    opportunities to provide the marine transportation requirements
    for new or expanding LNG projects. The award process relating to
    LNG transportation opportunities typically involves various
    stages and takes several months to complete. Neither we nor
    Teekay Shipping Corporation may be awarded charters relating to
    any of the projects we or it pursues. If any LNG project
    charters are awarded to Teekay Shipping Corporation, it must
    offer them to us pursuant to the terms of the omnibus agreement
    we entered into in May 2005 at the closing of our initial public
    offering of common units. In July and August 2005, Teekay
    Shipping Corporation announced the awards to it of a 70%
    interest in two LNG carriers and related long-term, fixed-rate
    time charters to service the Tangguh LNG project in Indonesia
    and a 40% interest in four LNG carriers and related long-term,
    fixed-rate time charters to service an LNG project in Qatar. In
    connection with these awards, Teekay Shipping Corporation has
    (a)&#160;exercised shipbuilding options to construct two 155,000
    cubic meter LNG carriers at a total delivered cost of
    approximately $450&#160;million, which vessels are scheduled to
    deliver in late 2008 and early 2009, respectively, and
    (b)&#160;entered into agreements to construct four 217,000 cubic
    meter LNG carriers at a total delivered cost of approximately
    $1.1&#160;billion, which vessels are scheduled to deliver in the
    first half of 2008.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we elect pursuant to the omnibus agreement to obtain Teekay
    Shipping Corporation&#146;s interests in either or both of these
    LNG projects or any other projects Teekay Shipping Corporation
    may be awarded, or if we bid on and are awarded contracts
    relating to any LNG project, we will need to incur significant
    capital expenditures to buy Teekay Shipping Corporation&#146;s
    interest in these LNG projects or to build the LNG carriers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To fund the remaining portion of these and other capital
    expenditures, we will be required to use cash from operations or
    incur borrowings or raise capital through the sale of debt or
    additional equity securities. Use of cash from operations will
    reduce cash available to make required payments on our debt
    securities and for distributions to our unitholders. Our ability
    to obtain bank financing or to access the capital markets for
    future offerings may be limited by our financial condition at
    the time of any such financing or offerings as well as by
    adverse market conditions resulting from, among other things,
    general economic conditions and contingencies and uncertainties
    that are beyond our control. Our failure to obtain the funds for
    necessary future capital expenditures could have a material
    adverse effect on our business, results of operations and
    financial condition and on our ability to make required payments
    on our debt securities and cash distributions on our common
    units. Even if we are successful in obtaining necessary funds,
    the terms of such financings could limit our ability to make
    required payments on our debt securities or pay cash
    distributions to our unitholders. In addition, incurring
    additional debt may significantly increase our interest expense
    and financial leverage, and issuing additional equity securities
    may result in significant unitholder dilution and would increase
    the aggregate amount of cash required to meet our minimum
    quarterly distribution to unitholders, which could have a
    material adverse effect on our ability to make required payments
    on our debt securities and cash distributions on our common
    units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were unable to obtain financing required to complete
    payments on any future newbuilding orders, we could effectively
    forfeit all or a portion of the progress payments previously
    made.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    derive a substantial majority of our revenues from a limited
    number of customers, and the loss of any customer, time charter
    or vessel could result in a significant loss of revenues and
    cash flow.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have derived, and believe that we will continue to derive, a
    significant portion of our revenues and cash flow from a limited
    number of customers. Compania Espanola de Petroleos, S.A. (or
    <I>CEPSA</I>), an international oil company, accounted for
    approximately 47%, 36%, 30% and 30% of our revenues during 2003,
    2004, 2005 and the first half of 2006, respectively. In
    addition, two other customers, Spanish energy companies Repsol
    YPF, S.A. and Gas Natural SDG, S.A., accounted for 26% and 11%
    of our revenues in 2003, 18% and 21% of our revenues in 2004,
    33% and 18% of our revenues in 2005 and 28% and 12% of our
    revenues in the first half of 2006, respectively. In addition,
    Uni&#243;n Fenosa Gas, S.A. accounted for 16% of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    our revenues in 2005 and 13% of our revenues in the first half
    of 2006. As a result of our acquisition of the three Suezmax
    tankers (or the <I>ConocoPhillips Tankers</I>) from Teekay
    Shipping Corporation upon the closing of our follow-on public
    offering in November 2005, we derived 17% of our revenues in the
    first half of 2006 from a ConocoPhillips subsidiary, the
    customer under the related time charter contracts. No other
    customer accounted for 10% or more of our revenues during any of
    these periods. Ras Laffan Liquefied Natural Gas Co. Limited (II)
    (or <I>RasGas&#160;II</I>) will be a significant customer
    following the delivery in 2006 and 2007 of three LNG
    newbuildings that we will operate under
    <FONT style="white-space: nowrap">20-year</FONT> time
    charters with RasGas&#160;II following our purchase of Teekay
    Shipping Corporation&#146;s 70% interest in Teekay Nakilat,
    which owns the three subsidiaries that will lease the vessels
    under capital leases.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We could lose a customer or the benefits of a time charter if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the customer fails to make charter payments because of its
    financial inability, disagreements with us or otherwise;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the customer exercises certain rights to terminate the charter,
    purchase or cause the sale of the vessel or, under some of our
    charters, convert the time charter to a bareboat charter (some
    of which rights are exercisable at any time);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the customer terminates the charter because we fail to deliver
    the vessel within a fixed period of time, the vessel is lost or
    damaged beyond repair, there are serious deficiencies in the
    vessel or prolonged periods of off-hire, or we default under the
    charter;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    under some of our time charters, the customer terminates the
    charter because of the termination of the charterer&#146;s LNG
    sales agreement supplying the LNG designated for our services,
    or a prolonged force majeure event affecting the customer,
    including damage to or destruction of relevant LNG production or
    regasification facilities, war or political unrest preventing us
    from performing services for that customer.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we lose a key LNG time charter, we may be unable to re-deploy
    the related vessel on terms as favorable to us due to the
    long-term nature of most LNG time charters and the lack of an
    established LNG spot market. If we are unable to re-deploy an
    LNG carrier, we will not receive any revenues from that vessel,
    but we may be required to pay expenses necessary to maintain the
    vessel in proper operating condition. In addition, if a customer
    exercises its right to purchase a vessel, we would not receive
    any further revenue from the vessel and may be unable to obtain
    a substitute vessel and charter. This may cause us to receive
    decreased revenue and cash flows from having fewer vessels
    operating in our fleet. Any compensation under our charters for
    a purchase of the vessels may not adequately compensate us for
    the loss of the vessel and related time charter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we lose a key Suezmax tanker customer, we may be unable to
    obtain other long-term Suezmax charters and may become subject
    to the volatile spot market, which is highly competitive and
    subject to significant price fluctuations. If a customer
    exercises its right under some charters to purchase or force a
    sale of the vessel, we may be unable to acquire an adequate
    replacement vessel or may be forced to construct a new vessel.
    Any replacement newbuilding would not generate revenues during
    its construction and we may be unable to charter any replacement
    vessel on terms as favorable to us as those of the terminated
    charter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The loss of any of our customers, time charters or vessels, or a
    decline in payments under our charters, could have a material
    adverse effect on our business, results of operations and
    financial condition and our ability to make required payments on
    our debt securities and distributions on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    depend on Teekay Shipping Corporation to assist us in operating
    our business, competing in our markets, and providing interim
    financing for certain vessel acquisitions.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to certain services agreements between us and certain
    of our operating subsidiaries, on the one hand, and certain
    subsidiaries of Teekay Shipping Corporation, on the other hand,
    the Teekay Shipping Corporation subsidiaries provide to us
    administrative services and to our operating subsidiaries
    significant
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    operational services (including vessel maintenance, crewing for
    some of our vessels, purchasing, shipyard supervision, insurance
    and financial services) and other technical, advisory and
    administrative services. Our operational success and ability to
    execute our growth strategy depend significantly upon Teekay
    Shipping Corporation&#146;s satisfactory performance of these
    services. Our business will be harmed if Teekay Shipping
    Corporation fails to perform these services satisfactorily or if
    Teekay Shipping Corporation stops providing these services to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to compete for the transportation requirements of
    LNG projects and to enter into new time charters and expand our
    customer relationships depends largely on our ability to
    leverage our relationship with Teekay Shipping Corporation and
    its reputation and relationships in the shipping industry. If
    Teekay Shipping Corporation suffers material damage to its
    reputation or relationships it may harm our ability to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    renew existing charters upon their expiration;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    obtain new charters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    successfully interact with shipyards during periods of shipyard
    construction constraints;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    obtain financing on commercially acceptable terms;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    maintain satisfactory relationships with our employees and
    suppliers.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If our ability to do any of the things described above is
    impaired, it could have a material adverse effect on our
    business, results of operations and financial condition and our
    ability to make required payments on our debt securities and
    cash distributions on our common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to entering into capital leases with respect to the three
    RasGas&#160;II LNG newbuildings, Teekay Shipping Corporation was
    incurring all costs for the construction and delivery of the
    vessels, which we refer to as &#147;warehousing.&#148; Upon
    their delivery, we would have purchased all of the interest of
    Teekay Shipping Corporation in the vessels at a price that would
    reimburse Teekay Shipping Corporation for these costs and
    compensate it for its average weighted cost of capital on the
    construction payments. We may enter into similar arrangements
    with Teekay Shipping Corporation or third parties in the future.
    If Teekay Shipping Corporation or another warehousing partner
    fails to make construction payments for any vessels that may be
    warehoused for us, we could lose access to the vessels as a
    result of the default or we may need to finance these vessels
    before they begin operating and generating voyage revenues,
    which could harm our business and reduce our ability to make
    required payments on our debt securities and cash distributions
    on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    growth depends on continued growth in demand for LNG and LNG
    shipping.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our growth strategy focuses on continued expansion in the LNG
    shipping sector. Accordingly, our growth depends on continued
    growth in world and regional demand for LNG and LNG shipping,
    which could be negatively affected by a number of factors, such
    as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increases in the cost of natural gas derived from LNG relative
    to the cost of natural gas generally;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increases in the production of natural gas in areas linked by
    pipelines to consuming areas, the extension of existing, or the
    development of new, pipeline systems in markets we may serve, or
    the conversion of existing non-natural gas pipelines to natural
    gas pipelines in those markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    decreases in the consumption of natural gas due to increases in
    its price relative to other energy sources or other factors
    making consumption of natural gas less attractive;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    availability of new, alternative energy sources, including
    compressed natural gas;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    negative global or regional economic or political conditions,
    particularly in LNG consuming regions, which could reduce energy
    consumption or its growth.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Reduced demand for LNG and LNG shipping would have a material
    adverse effect on our future growth and could harm our business,
    results of operations and financial condition.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Growth
    of the LNG market may be limited by infrastructure constraints
    and community environmental group resistance to new LNG
    infrastructure over concerns about the environment, safety and
    terrorism.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A complete LNG project includes production, liquefaction,
    regasification, storage and distribution facilities and LNG
    carriers. Existing LNG projects and infrastructure are limited,
    and new or expanded LNG projects are highly complex and
    capital-intensive, with new projects often costing several
    billion dollars. Many factors could negatively affect continued
    development of LNG infrastructure or disrupt the supply of LNG,
    including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increases in interest rates or other events that may affect the
    availability of sufficient financing for LNG projects on
    commercially reasonable terms;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    decreases in the price of LNG, which might decrease the expected
    returns relating to investments in LNG projects;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the inability of project owners or operators to obtain
    governmental approvals to construct or operate LNG facilities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    local community resistance to proposed or existing LNG
    facilities based on safety, environmental or security concerns;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any significant explosion, spill or similar incident involving
    an LNG facility or LNG carrier;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    labor or political unrest affecting existing or proposed areas
    of LNG production;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    capacity constraints at existing shipyards, which are expected
    to continue until at least the end of 2008.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the LNG supply chain is disrupted or does not continue to
    grow, or if a significant LNG explosion, spill or similar
    incident occurs, it could have a material adverse effect on our
    business, results of operations and financial condition and our
    ability to make required payments on our debt securities and
    cash distributions on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    growth depends on our ability to expand relationships with
    existing customers and obtain new customers, for which we will
    face substantial competition.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    One of our principal objectives is to enter into additional
    long-term, fixed-rate LNG time charters. The process of
    obtaining new long-term LNG time charters is highly competitive
    and generally involves an intensive screening process and
    competitive bids, and often extends for several months. LNG
    shipping contracts are awarded based upon a variety of factors
    relating to the vessel operator, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    shipping industry relationships and reputation for customer
    service and safety;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    LNG shipping experience and quality of ship operations
    (including cost effectiveness);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    quality and experience of seafaring crew;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to finance LNG carriers at competitive rates and
    financial stability generally;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    relationships with shipyards and the ability to get suitable
    berths;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    construction management experience, including the ability to
    obtain on-time delivery of new vessels according to customer
    specifications;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    willingness to accept operational risks pursuant to the charter,
    such as allowing termination of the charter for force majeure
    events;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competitiveness of the bid in terms of overall price.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We compete for providing marine transportation services for
    potential LNG projects with a number of experienced companies,
    including state-sponsored entities and major energy companies
    affiliated with the LNG project requiring LNG shipping services.
    Many of these competitors have significantly greater
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    financial resources than we do or Teekay Shipping Corporation
    does. We anticipate that an increasing number of marine
    transportation companies&#160;&#151; including many with strong
    reputations and extensive resources and experience&#160;&#151;
    will enter the LNG transportation sector. This increased
    competition may cause greater price competition for time
    charters. As a result of these factors, we may be unable to
    expand our relationships with existing customers or to obtain
    new customers on a profitable basis, if at all, which would have
    a material adverse effect on our business, results of operations
    and financial condition and our ability to make required
    payments on our debt securities and cash distributions on our
    common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Delays
    in deliveries of newbuildings could harm our operating results
    and lead to the termination of related time
    charters.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to purchase Teekay Shipping Corporation&#146;s
    70% interest in Teekay Nakilat Corporation, which through its
    subsidiaries will lease under capital leases the three
    RasGas&#160;II LNG newbuilding carriers, in connection with
    their deliveries scheduled for the fourth quarter of 2006 and
    the first half of 2007. The delivery of these vessels, or any
    other newbuildings we may order or otherwise acquire, could be
    delayed, which would delay our receipt of revenues under the
    time charters for the vessels. In addition, under some of our
    charters if our delivery of a vessel to our customer is delayed,
    we may be required to pay liquidated damages in amounts equal to
    or, under some charters, almost double, the hire rate during the
    delay. For prolonged delays, the customer may terminate the time
    charter and, in addition to the resulting loss of revenues, we
    may be responsible for additional, substantial liquidated
    damages.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our receipt of newbuildings could be delayed because of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    quality or engineering problems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    changes in governmental regulations or maritime self-regulatory
    organization standards;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    work stoppages or other labor disturbances at the shipyard;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    bankruptcy or other financial crisis of the shipbuilder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a backlog of orders at the shipyard;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    political or economic disturbances in South Korea or other
    locations where our vessels are being or may be built;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    weather interference or catastrophic event, such as a major
    earthquake or fire;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our requests for changes to the original vessel specifications;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    shortages of or delays in the receipt of necessary construction
    materials, such as steel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to finance the purchase of the vessels;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to obtain requisite permits or approvals.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If delivery of a vessel is materially delayed, it could
    adversely affect our results or operations and financial
    condition and our ability to make required payments on our debt
    securities and cash distributions on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    have more difficulty entering into long-term, fixed-rate time
    charters if an active short-term or spot LNG shipping market
    develops.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    LNG shipping historically has been transacted with long-term,
    fixed-rate time charters, usually with terms ranging from 20 to
    25&#160;years. One of our principal strategies is to enter into
    additional long-term, fixed-rate LNG time charters. However, the
    number of spot and short-term charters has been increasing, with
    LNG charters under 12&#160;months in duration growing from less
    than 2% of the market in the late 1990s to approximately 13% in
    2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an active spot or short-term market continues to develop, we
    may have increased difficulty entering into long-term,
    fixed-rate time charters for our LNG vessels and, as a result,
    our cash flow may decrease
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and be less stable. In addition, an active short-term or spot
    LNG market may require us to enter into charters based on
    changing market prices, as opposed to contracts based on a fixed
    rate, which could result in a decrease in our cash flow in
    periods when the market price for shipping LNG is depressed or
    insufficient funds are available to cover our financing costs
    for related vessels.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Over
    time vessel values may fluctuate substantially and, if these
    values are lower at a time when we are attempting to dispose of
    a vessel, we may incur a loss.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vessel values for LNG carriers and Suezmax oil tankers can
    fluctuate substantially over time due to a number of different
    factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    prevailing economic conditions in natural gas, oil and energy
    markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a substantial or extended decline in demand for natural gas, LNG
    or oil;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increases in the supply of vessel capacity;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cost of retrofitting or modifying existing vessels, as a
    result of technological advances in vessel design or equipment,
    changes in applicable environmental or other regulation or
    standards, or otherwise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a charter terminates, we may be unable to re-deploy the
    vessel at attractive rates and, rather than continue to incur
    costs to maintain and finance it, may seek to dispose of it. Our
    inability to dispose of the vessel at a reasonable value could
    result in a loss on its sale and adversely affect our results of
    operations and financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be unable to make or realize expected benefits from
    acquisitions, and implementing our growth strategy through
    acquisitions may harm our business, financial condition and
    operating results.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our growth strategy includes selectively acquiring existing LNG
    carriers or LNG shipping businesses. Historically, there have
    been very few purchases of existing vessels and businesses in
    the LNG shipping industry. Factors that may contribute to a
    limited number of acquisition opportunities in the LNG industry
    in the near term include the relatively small number of
    independent LNG fleet owners and the limited number of LNG
    carriers not subject to existing long-term charter contracts. In
    addition, competition from other companies could reduce our
    acquisition opportunities or cause us to pay higher prices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any acquisition of a vessel or business may not be profitable to
    us at or after the time we acquire it and may not generate cash
    flow sufficient to justify our investment. In addition, our
    acquisition growth strategy exposes us to risks that may harm
    our business, financial condition and operating results,
    including risks that we may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fail to realize anticipated benefits, such as new customer
    relationships, cost-savings or cash flow enhancements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    be unable to hire, train or retain qualified shore and seafaring
    personnel to manage and operate our growing business and fleet;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    decrease our liquidity by using a significant portion of our
    available cash or borrowing capacity to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    significantly increase our interest expense or financial
    leverage if we incur additional debt to finance acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur or assume unanticipated liabilities, losses or costs
    associated with the business or vessels acquired;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur other significant charges, such as impairment of goodwill
    or other intangible assets, asset devaluation or restructuring
    charges.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike newbuildings, existing vessels typically do not carry
    warranties as to their condition. While we generally inspect
    existing vessels prior to purchase, such an inspection would
    normally not provide us with as much knowledge of a
    vessel&#146;s condition as we would possess if it had been built
    for us and operated by us during its life. Repairs and
    maintenance costs for existing vessels are difficult to predict
    and may be substantially higher than for vessels we have
    operated since they were built. These costs could decrease our
    cash flow and reduce our liquidity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Terrorist
    attacks, increased hostilities or war could lead to further
    economic instability, increased costs and disruption of our
    business.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Terrorist attacks, such as the attacks that occurred in the
    United States on September&#160;11, 2001 and the bombings in
    Spain on March&#160;11, 2004 and in England on July&#160;7,
    2005, and the current conflicts in Iraq and Afghanistan and
    other current and future conflicts, may adversely affect our
    business, operating results, financial condition, ability to
    raise capital and future growth. Continuing hostilities in the
    Middle East may lead to additional armed conflicts or to further
    acts of terrorism and civil disturbance in the United States,
    Spain or elsewhere, which may contribute further to economic
    instability and disruption of LNG and oil production and
    distribution, which could result in reduced demand for our
    services.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, LNG and oil facilities, shipyards, vessels,
    pipelines and oil and gas fields could be targets of future
    terrorist attacks. Any such attacks could lead to, among other
    things, bodily injury or loss of life, vessel or other property
    damage, increased vessel operational costs, including insurance
    costs, and the inability to transport LNG, natural gas and oil
    to or from certain locations. Terrorist attacks, war or other
    events beyond our control that adversely affect the
    distribution, production or transportation of LNG or oil to be
    shipped by us could entitle our customers to terminate our
    charter contracts, which would harm our cash flow and our
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Terrorist attacks, or the perception that LNG facilities and LNG
    carriers are potential terrorist targets, could materially and
    adversely affect expansion of LNG infrastructure and the
    continued supply of LNG to the United States and other
    countries. Concern that LNG facilities may be targeted for
    attack by terrorists has contributed to significant community
    and environmental resistance to the construction of a number of
    LNG facilities, primarily in North America. If a terrorist
    incident involving an LNG facility or LNG carrier did occur, in
    addition to the possible effects identified in the previous
    paragraph, the incident may adversely affect construction of
    additional LNG facilities in the United States and other
    countries or result in the temporary or permanent closing of
    various LNG facilities currently in operation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    substantial operations outside the United States expose us to
    political, governmental and economic instability, which could
    harm our operations.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because our operations are primarily conducted outside of the
    United States, they may be affected by economic, political and
    governmental conditions in the countries where we are engaged in
    business or where our vessels are registered. Any disruption
    caused by these factors could harm our business. In particular,
    we derive a substantial portion of our revenues from shipping
    LNG and oil from politically unstable regions. Past political
    conflicts in these regions, particularly in the Arabian Gulf,
    have included attacks on ships, mining of waterways and other
    efforts to disrupt shipping in the area. In addition to acts of
    terrorism, vessels trading in this and other regions have also
    been subject, in limited instances, to piracy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Future hostilities or other political instability in the Arabian
    Gulf or other regions where we operate or may operate could have
    a material adverse effect on the growth of our business, results
    of operations and financial condition and our ability to make
    required payments on our debt securities and cash distributions
    on our common units. In addition, tariffs, trade embargoes and
    other economic sanctions by Spain, the United States or other
    countries against countries in the Middle East, Southeast Asia
    or elsewhere as a result of terrorist attacks, hostilities or
    otherwise may limit trading activities with those countries,
    which could also harm our business and ability to make cash
    distributions.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Marine
    transportation is inherently risky, and an incident involving
    significant loss of or environmental contamination by any of our
    vessels could harm our reputation and business.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our vessels and their cargoes are at risk of being damaged or
    lost because of events such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    marine disasters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    bad weather;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    mechanical failures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    grounding, fire, explosions and collisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    piracy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    human error;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    war and terrorism.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An accident involving any of our vessels could result in any of
    the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    death or injury to persons, loss of property or environmental
    damage;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    delays in the delivery of cargo;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    loss of revenues from or termination of charter contracts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    governmental fines, penalties or restrictions on conducting
    business;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    higher insurance rates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    damage to our reputation and customer relationships generally.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any of these results could have a material adverse effect on our
    business, financial condition and operating results.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    insurance may be insufficient to cover losses that may occur to
    our property or result from our operations.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The operation of LNG carriers and oil tankers is inherently
    risky. Although we carry hull and machinery (marine and war
    risks) and protection and indemnity insurance, all risks may not
    be adequately insured against, and any particular claim may not
    be paid. In addition, we do not carry insurance on our oil
    tankers covering the loss of revenues resulting from vessel
    off-hire time based on its cost compared to our off-hire
    experience. Commencing January&#160;1, 2006, Teekay Shipping
    Corporation began providing off-hire insurance for our LNG
    carriers. Any claims covered by insurance would be subject to
    deductibles, and since it is possible that a large number of
    claims may be brought, the aggregate amount of these deductibles
    could be material. Certain of our insurance coverage is
    maintained through mutual protection and indemnity associations,
    and as a member of such associations we may be required to make
    additional payments over and above budgeted premiums if member
    claims exceed association reserves.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be unable to procure adequate insurance coverage at
    commercially reasonable rates in the future. For example, more
    stringent environmental regulations have led in the past to
    increased costs for, and in the future may result in the lack of
    availability of, insurance against risks of environmental damage
    or pollution. A catastrophic oil spill or marine disaster could
    result in losses that exceed our insurance coverage, which could
    harm our business, financial condition and operating results.
    Any uninsured or underinsured loss could harm our business and
    financial condition. In addition, our insurance may be voidable
    by the insurers as a result of certain of our actions, such as
    our ships failing to maintain certification with applicable
    maritime self-regulatory organizations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Changes in the insurance markets attributable to terrorist
    attacks may also make certain types of insurance more difficult
    for us to obtain. In addition, the insurance that may be
    available may be significantly more expensive than our existing
    coverage.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    marine energy transportation industry is subject to substantial
    environmental and other regulations, which may significantly
    limit our operations or increase our expenses.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our operations are affected by extensive and changing
    environmental protection laws and other regulations and
    international conventions. We have incurred, and expect to
    continue to incur, substantial expenses in complying with these
    laws and regulations, including expenses for vessel
    modifications and changes in operating procedures. Additional
    laws and regulations may be adopted that could limit our ability
    to do business or further increase our costs. In addition,
    failure to comply with applicable laws and regulations may
    result in administrative and civil penalties, criminal sanctions
    or the suspension or termination of our operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The United States Oil Pollution Act of 1990 (or <I>OPA 90</I>),
    for instance, increased expenses for us and others in our
    industry. OPA&#160;90 provides for potentially unlimited joint,
    several and strict liability for owners, operators and demise or
    bareboat charterers for oil pollution and related damages in
    U.S.&#160;waters, which include the U.S.&#160;territorial sea
    and the 200-nautical mile exclusive economic zone around the
    United States. OPA&#160;90 applies to discharges of any oil from
    a vessel, including discharges of oil tanker cargoes and
    discharges of fuel and lubricants from an oil tanker or LNG
    carrier. To comply with OPA&#160;90, vessel owners generally
    incur increased costs in meeting additional maintenance and
    inspection requirements, in developing contingency arrangements
    for potential spills and in obtaining required insurance
    coverage. OPA&#160;90 requires vessel owners and operators of
    vessels operating in U.S.&#160;waters to establish and maintain
    with the U.S.&#160;Coast Guard evidence of insurance or of
    qualification as a self-insurer or other acceptable evidence of
    financial responsibility sufficient to meet certain potential
    liabilities under OPA&#160;90 and the U.S.&#160;Comprehensive
    Environmental Response, Compensation, and Liability Act (or
    <I>CERCLA</I>), which imposes similar liabilities upon owners,
    operators and bareboat charterers of vessels from which a
    discharge of &#147;hazardous substances&#148; (other than oil)
    occurs. While LNG should not be considered a hazardous substance
    under CERCLA, additives to fuel oil or lubricants used on LNG
    carriers might fall within its scope. Under OPA&#160;90 and
    CERCLA, owners, operators and bareboat charterers are jointly,
    severally and strictly liable for costs of cleanup and damages
    resulting from a discharge or threatened discharge within
    U.S.&#160;waters. This means we may be subject to liability even
    if we are not negligent or at fault.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Most states in the United States bordering on a navigable
    waterway have enacted legislation providing for potentially
    unlimited strict liability without regard to fault for the
    discharge of pollutants within their waters. An oil spill or
    other event could result in significant liability, including
    fines, penalties, criminal liability and costs for natural
    resource damages. The potential for these releases could
    increase to the extent we increase our operations in
    U.S.&#160;waters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OPA&#160;90 and CERCLA do not preclude claimants from seeking
    damages for the discharge of oil and hazardous substances under
    other applicable law, including maritime tort law. Such claims
    could include attempts to characterize seaborne transportation
    of LNG as an ultra-hazardous activity, which attempts, if
    successful, would lead to our being strictly liable for damages
    resulting from that activity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we believe that the heightened environmental,
    quality and security concerns of insurance underwriters,
    regulators and charterers will generally lead to additional
    regulatory requirements, including enhanced risk assessment and
    security requirements and greater inspection and safety
    requirements on all vessels in the LNG carrier and oil tanker
    markets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exposure
    to currency exchange rate fluctuations will result in
    fluctuations in our cash flows and operating
    results.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are paid in Euros under some of our charters, and a majority
    of our vessel operating expenses and general and administrative
    expenses currently are denominated in Euros, which is primarily
    a function of the nationality of our crew and administrative
    staff. We also make payments under two Euro-denominated term
    loans. If the amount of our Euro-denominated obligations exceeds
    our Euro-denominated revenues, we must convert other currencies,
    primarily the U.S.&#160;Dollar, into Euros. An increase in the
    strength of the Euro relative to the U.S.&#160;Dollar would
    require us to convert more U.S.&#160;Dollars to Euros to satisfy
    those obligations, which would cause us to have less cash
    available to make required payments on our debt
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    securities and for distribution on our common units. In
    addition, if we do not have sufficient U.S.&#160;Dollars, we may
    be required to convert Euros into U.S.&#160;Dollars for payments
    under any U.S.&#160;Dollar-denominated debt securities or for
    distributions to unitholders. An increase in the strength of the
    U.S.&#160;Dollar relative to the Euro could cause us to have
    less cash available for these payments and distributions in this
    circumstance. We have not entered into currency swaps or forward
    contracts or similar derivatives to mitigate this risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we report our operating results in U.S.&#160;Dollars,
    changes in the value of the U.S.&#160;Dollar relative to the
    Euro also result in fluctuations in our reported revenues and
    earnings. In addition, under U.S.&#160;accounting guidelines,
    all foreign currency-denominated monetary assets and liabilities
    such as cash and cash equivalents, accounts receivable,
    restricted cash, accounts payable, long-term debt and capital
    lease obligations are revalued and reported based on the
    prevailing exchange rate at the end of the period. This
    revaluation historically has caused us to report significant
    non-monetary foreign currency exchange gains or losses each
    period. The primary source for these gains and losses is our
    Euro-denominated term loans. In 2003 and 2004 and the first half
    of 2006, we reported foreign currency exchange losses of
    $71.5&#160;million, $60.8&#160;million and $28.2&#160;million,
    respectively. In 2005, we reported a foreign currency exchange
    gain of $81.8&#160;million.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Many
    of our seafaring employees are covered by collective bargaining
    agreements and the failure to renew those agreements or any
    future labor agreements may disrupt our operations and adversely
    affect our cash flows.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A significant portion of our seafarers, and the seafarers
    employed by Teekay Shipping Corporation and its other affiliates
    that crew our vessels, are employed under collective bargaining
    agreements, which expire at varying times through 2008. The
    collective bargaining agreement for our Spanish Suezmax tanker
    crew members (covering five Suezmax tankers) expires at the end
    of 2008. We may be subject to similar labor agreements in the
    future. We may be subject to labor disruptions in the future if
    our relationships deteriorate with our seafarers or the unions
    that represent them. Our collective bargaining agreements may
    not prevent labor disruptions, particularly when the agreements
    are being renegotiated. Any labor disruptions could harm our
    operations and could have a material adverse effect on our
    business, results of operations and financial condition and our
    ability to make required payments on our debt securities and
    cash distributions on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Due to
    our lack of diversification, adverse developments in our LNG or
    oil marine transportation business could reduce our ability to
    make required payments on our debt securities and distributions
    to our unitholders.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We rely exclusively on the cash flow generated from our LNG
    carriers and Suezmax oil tankers that operate in the LNG and oil
    marine transportation business. Due to our lack of
    diversification, an adverse development in the LNG or oil
    shipping industry would have a significantly greater impact on
    our financial condition and results of operations than if we
    maintained more diverse assets or lines of business.
</DIV>
<A name='110'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Inherent in an Investment in Us</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Teekay
    Shipping Corporation and its affiliates may engage in
    competition with us.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay Shipping Corporation and its affiliates may engage in
    competition with us. Pursuant to the omnibus agreement, Teekay
    Shipping Corporation and its controlled affiliates (other than
    us and our subsidiaries) generally have agreed not to own,
    operate or charter LNG carriers without the consent of our
    general partner. The omnibus agreement, however, allows Teekay
    Shipping Corporation or any of such controlled affiliates to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire LNG carriers and related time charters as part of a
    business if a majority of the value of the total assets or
    business acquired is not attributable to the LNG carriers and
    time charters, as determined in good faith by the board of
    directors of Teekay Shipping Corporation; however, if at any
    time Teekay Shipping Corporation completes such an acquisition,
    it must offer to sell the LNG
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    carriers and related time charters to us for their fair market
    value plus any additional tax or other similar costs to Teekay
    Shipping Corporation that would be required to transfer the LNG
    carriers and time charters to us separately from the acquired
    business;&#160;or
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    own, operate and charter LNG carriers that relate to a bid or
    award for a proposed LNG project that Teekay Shipping
    Corporation or any of its subsidiaries has submitted or
    hereafter submits or receives; however, at least 180&#160;days
    prior to the scheduled delivery date of any such LNG carrier,
    Teekay Shipping Corporation must offer to sell the LNG carrier
    and related time charter to us, with the vessel valued at its
    <FONT style="white-space: nowrap">&#147;fully-built-up</FONT>
    cost,&#148; which represents the aggregate expenditures incurred
    (or to be incurred prior to delivery to us) by Teekay Shipping
    Corporation to acquire or construct and bring such LNG carrier
    to the condition and location necessary for our intended use.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we decline the offer to purchase the LNG carriers and time
    charters described above, Teekay Shipping Corporation may own
    and operate the LNG carriers, but may not expand that portion of
    its business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, pursuant to the omnibus agreement, Teekay Shipping
    Corporation or any of its controlled affiliates (other than us
    and our subsidiaries) may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire, operate or charter LNG carriers if our general partner
    has previously advised Teekay Shipping Corporation that the
    board of directors of our general partner has elected, with the
    approval of its conflicts committee, not to cause us or our
    subsidiaries to acquire or operate the carriers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operate the three RasGas&#160;II LNG newbuilding carriers and
    related time charters if we fail to perform our obligation to
    purchase such vessels under our agreement with Teekay Shipping
    Corporation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acquire up to a 9.9% equity ownership, voting or profit
    participation interest in any publicly traded company that owns
    or operate LNG carriers;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide ship management services relating to LNG carriers.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If there is a change of control of Teekay Shipping Corporation,
    the non-competition provisions of the omnibus agreement may
    terminate, which termination could have a material adverse
    effect on our business, results of operations and financial
    condition and our ability to make required payments on our debt
    securities and cash distributions on our common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner and its other affiliates have conflicts of
    interest and limited fiduciary duties, which may permit them to
    favor their own interests to those of our
    securityholders.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay Shipping Corporation, which owns and controls our general
    partner, indirectly owns the 2% general partner interest and
    currently owns a 67.8% limited partner interest in us. Conflicts
    of interest may arise between Teekay Shipping Corporation and
    its affiliates, including our general partner, on the one hand,
    and us and our securityholders, on the other hand. As a result
    of these conflicts, our general partner may favor its own
    interests and the interests of its affiliates over the interests
    of our securityholders. These conflicts include, among others,
    the following situations:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    neither our partnership agreement nor any other agreement
    requires our general partner or Teekay Shipping Corporation to
    pursue a business strategy that favors us or utilizes our
    assets, and Teekay Shipping Corporation&#146;s officers and
    directors have a fiduciary duty to make decisions in the best
    interests of the stockholders of Teekay Shipping Corporation,
    which may be contrary to our interests;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the executive officers and three of the directors of our general
    partner also currently serve as executive officers or directors
    of Teekay Shipping Corporation and another director of our
    general partner is employed by an affiliate of Teekay Shipping
    Corporation;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner is allowed to take into account the
    interests of parties other than us, such as Teekay Shipping
    Corporation, in resolving conflicts of interest, which has the
    effect of limiting its fiduciary duty to our unitholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner has limited its liability and reduced its
    fiduciary duties under the laws of the Marshall Islands, while
    also restricting the remedies available to our unitholders, and
    as a result of purchasing common units, unitholders are treated
    as having agreed to the modified standard of fiduciary duties
    and to certain actions that may be taken by our general partner,
    all as set forth in the partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner determines the amount and timing of asset
    purchases and sales, capital expenditures, borrowings, issuances
    of additional partnership securities and reserves, each of which
    can affect the amount of cash that is available for required
    payments on our debt securities and distribution to our
    unitholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in some instances, our general partner may cause us to borrow
    funds in order to permit the payment of cash distributions, even
    if the purpose or effect of the borrowing is to make a
    distribution on our subordinated units or to make incentive
    distributions or to accelerate the expiration of the
    subordination period;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner determines which costs incurred by it and
    its affiliates are reimbursable by us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered to us on terms that are fair and reasonable or entering
    into additional contractual arrangements with any of these
    entities on our behalf;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner controls the enforcement of obligations owed
    to us by it and its affiliates;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement limits our general partner&#146;s
    fiduciary duties to our unitholders and restricts the remedies
    available to unitholders for actions taken by our general
    partner.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement contains provisions that reduce the
    standards to which our general partner would otherwise be held
    by Marshall Islands law. For example, our partnership agreement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. Where our partnership agreement permits, our
    general partner may consider only the interests and factors that
    it desires, and in such cases it has no duty or obligation to
    give any consideration to any interest of, or factors affecting
    us, our affiliates or any limited partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner is entitled to make other
    decisions in &#147;good faith&#148; if it reasonably believes
    that the decision is in our best interests;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the conflicts committee
    of the board of directors of our general partner and not
    involving a vote of unitholders must be on terms no less
    favorable to us than those generally being provided to or
    available from unrelated third parties or be &#147;fair and
    reasonable&#148; to us and that, in determining whether a
    transaction or resolution is &#147;fair and reasonable,&#148;
    our general partner may consider the totality of the
    relationships between the parties involved, including other
    transactions that may be particularly advantageous or beneficial
    to us;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud,
    willful misconduct or gross negligence.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to become a limited partner of our partnership, a
    common unitholder is required to agree to be bound by the
    provisions in the partnership agreement, including the
    provisions discussed above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Fees
    and cost reimbursements, which our general partner determines
    for services provided to us and certain of our subsidiaries, are
    substantial and reduce our cash available to make required
    payments on our debt securities and for distribution to our
    common unitholders.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to making any distribution on the common units, we pay
    fees for services provided to us and certain of our subsidiaries
    by certain subsidiaries of Teekay Shipping Corporation, and we
    reimburse our general partner for all expenses it incurs on our
    behalf. These fees are negotiated on our behalf by our general
    partner, and our general partner also determines the amounts it
    is reimbursed. These fees and expenses include all costs
    incurred in providing certain advisory, ship management,
    technical and administrative services to us and certain of our
    subsidiaries. In addition, our general partner and its
    affiliates may provide us with other services for which the
    general partner or its affiliates may charge us fees, and we may
    pay Teekay Shipping Corporation &#147;incentive fees&#148;
    pursuant to the omnibus agreement with it to reward and motivate
    Teekay Shipping Corporation for pursuing LNG projects that we
    may elect to undertake. The payment of fees to Teekay Shipping
    Corporation and its subsidiaries and reimbursement of expenses
    to our general partner could adversely affect our ability to
    make required payments on our debt securities and to pay cash
    distributions to our common unitholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Even
    if unitholders are dissatisfied, they cannot remove our general
    partner without its consent.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike the holders of common stock in a corporation, unitholders
    have only limited voting rights on matters affecting our
    business and, therefore, limited ability to influence
    management&#146;s decisions regarding our business. Unitholders
    did not elect our general partner or its board of directors and
    will have no right to elect our general partner or its board of
    directors on an annual or other continuing basis. The board of
    directors of our general partner is chosen by Teekay Shipping
    Corporation. Furthermore, if the unitholders are dissatisfied
    with the performance of our general partner, they will have
    little ability to remove our general partner. As a result of
    these limitations, the price at which the common units will
    trade could be diminished because of the absence or reduction of
    a takeover premium in the trading price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The vote of the holders of at least
    <FONT style="white-space: nowrap">66-</FONT><FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of all outstanding units voting together as a single class is
    required to remove the general partner. Teekay Shipping
    Corporation currently owns 67.8% of our outstanding units. Also,
    if the general partner is removed without cause during the
    subordination period and units held by the general partner and
    Teekay Shipping Corporation are not voted in favor of that
    removal, all remaining subordinated units will automatically
    convert into common units and any existing arrearages on the
    common units will be extinguished. A removal of the general
    partner under these circumstances would adversely affect the
    common units by prematurely eliminating their distribution and
    liquidation preference over the subordinated units, which would
    otherwise have continued until we had met certain distribution
    and performance tests. Cause is narrowly defined to mean that a
    court of competent jurisdiction has entered a final,
    non-appealable judgment finding the general partner liable for
    actual fraud or willful or wanton misconduct in its capacity as
    our general partner. Cause does not include most cases of
    charges of poor management of the business, so the removal of
    the general partner because of the unitholders&#146;
    dissatisfaction with the general partner&#146;s performance in
    managing our partnership will most likely result in the
    termination of the subordination period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, unitholders&#146; voting rights are further
    restricted by the partnership agreement provision providing that
    any units held by a person that owns 20% or more of any class of
    units then outstanding, other than the general partner, its
    affiliates, their transferees, and persons who acquired such
    units with the prior approval of the board of directors of the
    general partner, cannot vote on any matter. Our partnership
    agreement also contains provisions limiting the ability of
    unitholders to call meetings or to acquire information about our
    operations, as well as other provisions limiting the
    unitholders&#146; ability to influence the manner or direction
    of management.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    control of our general partner may be transferred to a third
    party without unitholder consent.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner may transfer its general partner interest to
    a third party in a merger or in a sale of all or substantially
    all of its assets without the consent of the unitholders. In
    addition, our partnership agreement does not restrict the
    ability of the members of our general partner from transferring
    their respective membership interests in our general partner to
    a third party. In the event of any such transfer, the new
    members of our general partner would be in a position to replace
    the board of directors and officers of our general partner with
    their own choices and to control the decisions taken by the
    board of directors and officers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    financing agreements contain operating and financial
    restrictions which may restrict our business and financing
    activities.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The operating and financial restrictions and covenants in our
    financing arrangements and any future financing agreements could
    adversely affect our ability to finance future operations or
    capital needs or to engage, expand or pursue our business
    activities. For example, the arrangements may restrict our
    ability to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    incur or guarantee indebtedness;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    change ownership or structure, including mergers,
    consolidations, liquidations and dissolutions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make dividends or distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make capital expenditures in excess of specified levels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make certain negative pledges and grant certain liens;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sell, transfer, assign or convey assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make certain loans and investments;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    enter into a new line of business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, some of our financing arrangements require our
    subsidiaries to maintain restricted cash deposits and maintain
    minimal levels of tangible net worth. Our ability to comply with
    the covenants and restrictions contained in our debt instruments
    may be affected by events beyond our control, including
    prevailing economic, financial and industry conditions. If
    market or other economic conditions deteriorate, our ability to
    comply with these covenants may be impaired. If we are in breach
    of any of the restrictions, covenants, ratios or tests in our
    financing agreements, a significant portion of our obligations
    may become immediately due and payable, and our lenders&#146;
    commitment to make further loans to us may terminate. We might
    not have, or be able to obtain, sufficient funds to make these
    accelerated payments. In addition, our obligations under an
    existing revolving credit facility are secured by certain of our
    assets, and if we are unable to repay our debt under the credit
    facility, the lenders could seek to foreclose on those assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Restrictions
    in our debt agreements may prevent us from paying
    distributions.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our payment of principal and interest on our debt and capital
    lease obligations will reduce cash available for distribution on
    our units. In addition, a number of our financing agreements
    prohibit the payment of distributions upon the occurrence of the
    following events, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay any principal, interest, fees, expenses or other
    amounts when due;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default under any vessel mortgage;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to notify the lenders of any material oil spill or
    discharge of hazardous material, or of any action or claim
    related thereto;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    breach or lapse of any insurance with respect to the vessels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    breach of certain financial covenants;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to observe any other agreement, security instrument,
    obligation or covenant beyond specified cure periods in certain
    cases;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default under other indebtedness of our operating company, our
    general partner or any of our subsidiaries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    bankruptcy or insolvency events involving us, our general
    partner or any of our subsidiaries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure of any representation or warranty to be materially
    correct;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a change of control, as defined in the applicable
    agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a material adverse effect, as defined in the applicable
    agreement, occurs relating to us or our business.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate that any subsequent refinancing of our current
    debt or any new debt will have similar restrictions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We can
    borrow money to pay distributions, which would reduce the amount
    of credit available to operate our business.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement allows us to make working capital
    borrowings to pay distributions. Accordingly, we can make
    distributions on all our units even though cash generated by our
    operations may not be sufficient to pay such distributions. We
    are required to reduce all working capital borrowings for this
    purpose under our revolving credit agreement to zero for a
    period of at least 15 consecutive days once each
    <FONT style="white-space: nowrap">12-month</FONT>
    period. Any working capital borrowings by us to make
    distributions will reduce the amount of working capital
    borrowings we can make for operating our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Unitholders
    may have liability to repay distributions.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under some circumstances, unitholders may have to repay amounts
    wrongfully distributed to them. Under the Marshall Islands
    Limited Partnership Act (or <I>Marshall Islands Act</I>), we may
    not make a distribution to our unitholders if the distribution
    would cause our liabilities to exceed the fair value of our
    assets. Marshall Islands law provides that for a period of three
    years from the date of the impermissible distribution limited
    partners who received the distribution and who knew at the time
    of the distribution that it violated Marshall Islands law will
    be liable to the limited partnership for the distribution
    amount. Assignees of partnership interests who become limited
    partners are liable for the obligations of the assignor to make
    contributions to the partnership that are known to the assignee
    at the time it became a limited partner and for unknown
    obligations if the liabilities could be determined from the
    partnership agreement. Liabilities to partners on account of
    their partnership interest and liabilities that are non-recourse
    to the partnership are not counted for purposes of determining
    whether a distribution is permitted.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have been organized as a limited partnership under the laws of
    the Republic of The Marshall Islands, which does not have a
    well-developed body of partnership law.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership affairs are governed by our partnership
    agreement and by the Marshall Islands Act. The provisions of the
    Marshall Islands Act resemble provisions of the limited
    partnership laws of a number of states in the United States,
    most notably Delaware. The Marshall Islands Act also provides
    that it is to be interpreted according to the non-statutory law
    of the State of Delaware. There have been, however, few, if any,
    court cases in the Marshall Islands interpreting the Marshall
    Islands Act, in contrast to Delaware, which has a fairly
    well-developed body of case law interpreting its limited
    partnership statute. Accordingly, we cannot predict whether
    Marshall Islands courts would reach the same conclusions as the
    courts in Delaware. For example, the rights of our unitholders
    and the fiduciary responsibilities of our general partner under
    Marshall Islands law are not as clearly established as under
    judicial precedent in existence in Delaware. As a result,
    unitholders may have more difficulty in protecting their
    interests in the face of actions by our general partner and its
    officers and directors than would unitholders of a limited
    partnership formed in the United States.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Because
    we are organized under the laws of the Marshall Islands, it may
    be difficult to serve us with legal process or enforce judgments
    against us, our directors or our management.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are organized under the laws of the Marshall Islands, and all
    of our assets are located outside of the United States. Our
    business is operated primarily from our offices in the Bahamas
    and Spain. In addition, our general partner is a Marshall
    Islands limited liability company and all but four of its
    directors and officers are non-residents of the United States,
    and all or a substantial portion of the assets of these
    non-residents are located outside the United States. As a
    result, it may be difficult or impossible for you to bring an
    action against us or against these individuals in the United
    States if you believe that your rights have been infringed under
    securities laws or otherwise. Even if you are successful in
    bringing an action of this kind, the laws of the Marshall
    Islands and of other jurisdictions may prevent or restrict you
    from enforcing a judgment against our assets or the assets of
    our general partner or its directors and officers.
</DIV>
<A name='111'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Relating to the Common Units</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Common
    unitholders may experience immediate and substantial dilution of
    their interest.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the past, purchasers of our common units have experienced
    immediate and substantial dilution of their ownership interest
    in us. This dilution results primarily because the assets
    contributed by our general partner and its affiliates are
    recorded at their historical cost, and not their fair value, in
    accordance with GAAP. Depending on whether the offering price
    for any common units exceeds the pro forma net tangible book
    value per common unit, you could incur immediate and substantial
    dilution.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    issue additional common units without the approval of the common
    unitholders, which would dilute their ownership
    interests.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our general partner, without the approval of our unitholders,
    may cause us to issue an unlimited number of additional units or
    other equity securities of equal or senior rank. The issuance by
    us of additional common units or other equity securities will
    have the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our unitholders&#146; proportionate ownership interest in us
    will decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount of cash available for distribution on each unit may
    decrease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because a lower percentage of total outstanding units will be
    subordinated units, the risk that a shortfall in the payment of
    the minimum quarterly distribution will be borne by our common
    unitholders will increase;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relative voting strength of each previously outstanding unit
    may be diminished;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the market price of the common units may decline;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ratio of taxable income to distributions may increase.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">In
    establishing cash reserves, our general partner may reduce the
    amount of cash available for distribution to the common
    unitholders.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement requires our general partner to deduct
    from operating surplus cash reserves that it determines are
    necessary to fund our future operating expenditures. These
    reserves affect the amount of cash available for distribution to
    our common unitholders. Our general partner may establish
    reserves for distributions on the subordinated units, but only
    if those reserves will not prevent us from distributing the full
    minimum quarterly distribution, plus any arrearages, on the
    common units for the following four quarters. The partnership
    agreement requires our general partner each quarter to deduct
    from operating surplus estimated maintenance capital
    expenditures, as opposed to actual expenditures, which could
    reduce the amount of available cash for distribution to the
    common unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    general partner has a call right that may require common
    unitholders to sell their common units at an undesirable time or
    price.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates own more
    than 80% of the common units, our general partner will have the
    right, but not the obligation (which it may assign to any of its
    affiliates or to us), to acquire all, but not less than all, of
    the common units held by unaffiliated persons at a price not
    less than their then-current market price. As a result, common
    unitholders may be required to sell their common units at an
    undesirable time or price and may not receive any return on
    their investment. Common unitholders may also incur a tax
    liability upon a sale of their units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay Shipping Corporation currently owns 43.2% of our common
    units. At the end of the subordination period (assuming no
    additional issuances of common units and conversion of our
    subordinated units into common units), Teekay Shipping
    Corporation will own 67.1% of the common units. Teekay Shipping
    Corporation will also acquire additional common units if it
    elects to receive common units in satisfaction of obligations
    owed to it by us, such as in connection with the sale to us of
    its 70% interest in Teekay Nakilat Corporation, which through
    its subsidiaries will lease under capital leases the three
    RasGas&#160;II LNG newbuilding carriers. Accordingly, after
    subordinated units are converted to common units our general
    partner and its affiliates may own a sufficient percentage of
    our common units to enable our general partner to exercise its
    call right.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    partnership agreement restricts the voting rights of unitholders
    owning 20% or more of our common units.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement restricts unitholders&#146; voting
    rights by providing that any units held by a person that owns
    20% or more of any class of units then outstanding, other than
    our general partner, its affiliates, their transferees and
    persons who acquired such units with the prior approval of the
    board of directors of our general partner, cannot vote on any
    matter. The partnership agreement also contains provisions
    limiting the ability of unitholders to call meetings or to
    acquire information about our operations, as well as other
    provisions limiting the unitholders&#146; ability to influence
    the manner or direction of management.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Common
    unitholders may not have limited liability if a court finds that
    unitholder action constitutes control of our
    business.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a limited partner in a partnership organized under the laws
    of the Marshall Islands, common unitholders could be held liable
    for our obligations to the same extent as a general partner if
    they participate in the &#147;control&#148; of our business. Our
    general partner generally has unlimited liability for the
    obligations of the partnership, such as its debts and
    environmental liabilities, except for those contractual
    obligations of the partnership that are expressly made without
    recourse to our general partner. In addition, the Marshall
    Islands Act provides that, under some circumstances, a
    unitholder may be liable to us for the amount of a distribution
    for a period of three years from the date of the distribution.
    In addition, the limitations on the liability of holders of
    limited partner interests for the obligations of a limited
    partnership have not been clearly established in some
    jurisdictions in which we do business.
</DIV>
<A name='112'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Relating to the Debt Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to generate sufficient cash flow to meet our debt
    service obligations.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to make payments on and to refinance our
    indebtedness and to fund planned expenditures will depend on our
    ability to generate cash. This, to a certain extent, is subject
    to general economic, financial, competitive, legislative,
    regulatory and other factors that are beyond our control.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may not be able to generate sufficient cash flow from
    operations or borrow amounts under our revolving credit
    facilities sufficient to fund our liquidity needs. We may need
    to refinance all or a portion of our indebtedness on or before
    maturity, which we may be unable to do on commercially
    reasonable terms, if at all.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">We are
    a holding company. We conduct our operations through our
    subsidiaries, who own our operating assets, and depend on cash
    flow from our subsidiaries to service our debt
    obligations.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are a holding company. We conduct our operations through our
    subsidiaries. As a result, our cash flow and ability to service
    our debt depends on the earnings of our subsidiaries and their
    distribution of earnings, loans or other payments to us. Any
    payment of dividends, distributions, loans or other payments
    from our subsidiaries to us could be subject to statutory or
    contractual restrictions. If we are unable to obtain funds from
    our subsidiaries we may not be able to pay interest or principal
    on our debt securities when due or to obtain the necessary funds
    from other sources.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    substantial debt levels may limit our flexibility in obtaining
    additional financing and in pursuing other business
    opportunities.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of June&#160;30, 2006, our consolidated debt, capital lease
    obligations and debt related to newbuilding vessels to be
    acquired totaled $1.4&#160;billion. In addition, we have the
    capacity to borrow significant additional amounts under our
    credit facilities. These facilities may be used by us for
    general partnership purposes. If we are awarded contracts for
    new LNG projects, our consolidated debt and capital lease
    obligations will increase, perhaps significantly. We will
    continue to have the ability to incur additional debt, subject
    to limitations in our credit facilities. Our level of debt could
    have important consequences to us, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to satisfy our obligations under our debt securities
    or other indebtedness may be impaired, and our failure to comply
    with the requirements of the other indebtedness could result in
    an event of default under our debt securities or such other
    indebtedness;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our ability to obtain additional financing, if necessary, for
    working capital, capital expenditures, acquisitions or other
    purposes may be impaired or such financing may not be available
    on favorable terms;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we will need a substantial portion of our cash flow to make
    principal and interest payments on our debt, reducing the funds
    that would otherwise be available for operations, future
    business opportunities and distributions to unitholders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our debt level will make us more vulnerable than our competitors
    with less debt to competitive pressures or a downturn in our
    business or the economy generally;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our debt level may limit our flexibility in responding to
    changing business and economic conditions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our ability to service our debt will depend upon, among other
    things, our future financial and operating performance, which
    will be affected by prevailing economic conditions and
    financial, business, regulatory and other factors, many of which
    are beyond our control. If our operating results are not
    sufficient to service our current or future indebtedness, we
    will be forced to take actions such as reducing distributions,
    reducing or delaying our business activities, acquisitions,
    investments or capital expenditures, selling assets,
    restructuring or refinancing our debt, or seeking additional
    equity capital or bankruptcy protection. We may be unable to
    effect any of these remedies on satisfactory terms, or at all.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">In the
    event of our bankruptcy or liquidation, holders of our debt
    securities will be paid from any assets remaining after payments
    to any holders of secured debt and debt of our non-guarantor
    subsidiaries.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate that any debt securities we may offer pursuant to
    this prospectus will be our general unsecured obligations, and
    that any guarantees of our debt securities will be the general
    unsecured obligations of the applicable Subsidiary Guarantors,
    and effectively subordinated to any secured debt that we or they
    may have, to the extent of the value of the assets securing that
    debt. In the event any of our subsidiaries do not guarantee our
    debt securities, those debt securities will be effectively
    subordinated to the liabilities of any of those non-guarantor
    subsidiaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are declared bankrupt or insolvent, or are liquidated, the
    holders of our secured debt will be entitled to be paid from our
    assets before any payment may be made with respect to our
    unsecured debt
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    securities. If any of these events occurs, we may not have
    sufficient assets to pay amounts due on our secured debt and our
    debt securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    subsidiary guarantees could be deemed to be fraudulent
    conveyances under certain circumstances, and a court may try to
    subordinate or void the subsidiary guarantees.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our debt securities may be guaranteed by certain of our
    subsidiaries. Under U.S.&#160;federal bankruptcy laws and
    comparable provisions of state fraudulent transfer laws, a
    guarantee by a subsidiary could be voided, or claims in respect
    of a guarantee could be subordinated to all other debts of that
    guarantor if, among other things, the guarantor, at the time it
    incurred the indebtedness evidenced by its guarantee received
    less than reasonably equivalent fair value or fair consideration
    for the incurrence of such guarantee,&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    was insolvent or rendered insolvent by reason of such incurrence;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    was engaged in a business or transaction for which the
    guarantor&#146;s remaining assets constituted unreasonably small
    capital;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    intended to incur, or believed that it would incur, debts beyond
    its ability to pay such debts as they mature.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, any payment by that subsidiary guarantor pursuant
    to its guarantee could be voided and required to be returned to
    the guarantor, or to a fund for the benefit of the creditors of
    the guarantor. The measures of insolvency for purposes of these
    fraudulent transfer laws will vary depending upon the law
    applied in any proceeding to determine whether a fraudulent
    transfer has occurred. Generally, however, a guarantor would be
    considered insolvent if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the sum of its liabilities, including contingent liabilities,
    were greater than the fair saleable value of all of its assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the present fair saleable value of its assets were less than the
    amount that would be required to pay its liabilities, including
    contingent liabilities, on its existing debts, as they become
    absolute or mature;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    it could not pay its debts as they become due.
</TD>
</TR>

</TABLE>
<A name='113'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Risks</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the following risk factors, you should read
    &#147;Material U.S.&#160;Federal Income Tax Consequences&#148;
    for a more complete discussion of expected material
    U.S.&#160;federal income tax consequences of owning and
    disposing of our securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">You
    may be required to pay U.S.&#160;taxes on your share of our
    income even if you do not receive any cash distributions from
    us.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that you are a U.S.&#160;citizen, resident or other
    U.S.&#160;taxpayer, you will be required to pay
    U.S.&#160;federal income taxes and, in some cases,
    U.S.&#160;state and local income taxes on your share of our
    taxable income, whether or not you receive cash distributions
    from us. You may not receive cash distributions from us equal to
    your share of our taxable income or even equal to the actual tax
    liability that results from your share of our taxable income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Because
    distributions may reduce a common unitholder&#146;s tax basis in
    our common units, common unitholders may realize greater gain on
    the disposition of their units than they otherwise may expect,
    and common unitholders may have a tax gain even if the price
    they receive is less than their original cost.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If common unitholders sell their common units, they will
    recognize gain or loss for U.S.&#160;federal income tax purposes
    that is equal to the difference between the amount realized and
    their tax basis in those common units. Prior distributions in
    excess of the total net taxable income allocated decrease a
    common
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    unitholder&#146;s tax basis and will, in effect, become taxable
    income if common units are sold at a price greater than their
    tax basis, even if the price received is less than the original
    cost. Assuming we are not treated as a corporation for
    U.S.&#160;federal income tax purposes, a substantial portion of
    the amount realized on a sale of units, whether or not
    representing gain, may be ordinary income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    after-tax benefit of an investment in the common units may be
    reduced if we cease to be treated as a partnership for
    U.S.&#160;federal income tax purposes.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The anticipated after-tax benefit of an investment in the common
    units may be reduced if we cease to be treated as a partnership
    for U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we cease to be treated as a partnership for U.S.&#160;federal
    income tax purposes, we would be treated as becoming a
    corporation for such purposes, and common unitholders could
    suffer material adverse tax or economic consequences, including
    the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The ratio of taxable income to distributions with respect to
    common units would increase because items would not be allocated
    to account for any differences between the fair market value and
    the basis of our assets at the time of the offering.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Common unitholders may recognize income or gain on any change in
    our status from a partnership to a corporation that occurs while
    they hold units.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We would not be permitted to adjust the tax basis of a secondary
    market purchaser in our assets under Section&#160;743(b) of the
    U.S.&#160;Internal Revenue Code of 1986. As a result, a person
    who purchases common units from a common unitholder in the
    market may realize materially more taxable income each year with
    respect to the units if we are treated as a corporation than if
    we are treated as a partnership for U.S.&#160;federal income tax
    purposes. This could reduce the value of the common
    unitholder&#146;s common units.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Common unitholders would not be entitled to claim any credit
    against their U.S.&#160;federal income tax liability for
    <FONT style="white-space: nowrap">non-U.S.&#160;income</FONT>
    tax liabilities incurred by us if we are treated as a
    corporation for U.S.&#160;federal income tax purposes.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If we fail to qualify for an exemption from U.S.&#160;tax on the
    U.S.&#160;source portion of our income attributable to
    transportation that begins or ends (but not both) in the United
    States, we will be subject to U.S.&#160;tax on such income on a
    gross basis (that is, without any allowance for deductions) at a
    rate of 4%. The imposition of this tax would have a negative
    effect on our business and would result in decreased cash
    available for distribution to common unitholders.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We also may be considered a passive foreign investment company
    (or <I>PFIC</I>) for U.S.&#160;federal income tax purposes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.&#160;tax-exempt
    entities and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    face unique U.S.&#160;tax issues from owning common units that
    may result in adverse U.S.&#160;tax consequences to
    them.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investments in common units by U.S.&#160;tax-exempt entities,
    including individual retirement accounts (known as <I>IRAs</I>),
    other retirements plans and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    raise issues unique to them. Assuming we are classified as a
    partnership for U.S.&#160;federal income tax purposes, virtually
    all of our income allocated to organizations exempt from
    U.S.&#160;federal income tax will be unrelated business taxable
    income and generally will be subject to U.S.&#160;federal income
    tax. In addition,
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    may be subject to a 4% U.S.&#160;federal income tax on the
    U.S.&#160;source portion of our gross income attributable to
    transportation that begins or ends in the United States, or
    distributions to them may be reduced on account of withholding
    of U.S.&#160;federal income tax by us in the event we are
    treated as having a fixed place of business in the United States
    or otherwise earn U.S.&#160;effectively connected income, unless
    an exemption applies and they file U.S.&#160;federal income tax
    returns to claim such exemption.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    sale or exchange of 50% or more of our capital or profits
    interests in any
    <FONT style="white-space: nowrap">12-month</FONT>
    period will result in the termination of our partnership for
    U.S.&#160;federal income tax purposes.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will be considered to have been terminated for
    U.S.&#160;federal income tax purposes if there is a sale or
    exchange of 50% or more of the total interests in our capital or
    profits within any
    <FONT style="white-space: nowrap">12-month</FONT>
    period. Our termination would, among other things, result in the
    closing of our taxable year for all unitholders and could result
    in a deferral of depreciation deductions allowable in computing
    our taxable income. Please read &#147;Material U.S.&#160;Federal
    Income Tax Consequences&#160;&#151; Disposition of Common
    Units&#160;&#151; Constructive Termination.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Common
    unitholders may be subject to income tax in one or more
    <FONT style="white-space: nowrap">non-U.S.&#160;countries,</FONT>
    including Canada, as a result of owning our common units if,
    under the laws of any such country, we are considered to be
    carrying on business there. Such laws may require common
    unitholders to file a tax return with, and pay taxes to, those
    countries. Any foreign taxes imposed on us or any of our
    subsidiaries will reduce our cash available for distribution to
    common unitholders.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend that our affairs and the business of each of our
    subsidiaries is conducted and operated in a manner that
    minimizes foreign income taxes imposed upon us and our
    subsidiaries or which may be imposed upon you as a result of
    owning our common units. However, there is a risk that common
    unitholders will be subject to tax in one or more countries,
    including Canada, as a result of owning our common units if,
    under the laws of any such country, we are considered to be
    carrying on business there. If common unitholders are subject to
    tax in any such country, common unitholders may be required to
    file a tax return with, and pay taxes to, that country based on
    their allocable share of our income. We may be required to
    reduce distributions to common unitholders on account of any
    withholding obligations imposed upon us by that country in
    respect of such allocation to common unitholders. The United
    States may not allow a tax credit for any foreign income taxes
    that common unitholders directly or indirectly incur. Any
    foreign taxes imposed on us or any of our subsidiaries will
    reduce our cash available for common unitholders.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless we specify otherwise in any prospectus supplement, we
    will use the net proceeds from our sale of securities covered by
    this prospectus for general partnership purposes, which may
    include, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    paying or refinancing all or a portion of our indebtedness
    outstanding at the time;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    funding working capital, capital expenditures or acquisitions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The actual application of proceeds from the sale of any
    particular offering of securities covered by this prospectus
    will be described in the applicable prospectus supplement
    relating to the offering.
</DIV>
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RATIO OF
    EARNINGS TO FIXED CHARGES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents our consolidated ratio of earnings
    to fixed charges for each of the periods indicated:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="30%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=08 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=08 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=08 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=08 type=hang1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=09 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=09 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=09 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=09 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Years Ended December 31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Six Months<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;1 to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>May&#160;1 to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>January&#160;1 to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>May&#160;10 to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Ended</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Years Ended December 31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>April&#160;30,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>May&#160;9,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>June&#160;30,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2001</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2002</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Ratio of earnings to fixed charges(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.87
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.44
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.62
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.74
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Deficiency of earnings to fixed charges (in millions of
    U.S.&#160;Dollars)(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    117.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    The information in this table is for our predecessor, Teekay
    Luxembourg S.a.r.l. and its subsidiaries, which include Teekay
    Shipping Spain, S.L., for periods subsequent to April&#160;30,
    2004 and prior to May&#160;10, 2005, the date of our initial
    public offering. For periods prior to April&#160;30, 2004, the
    information presented is for Teekay Shipping Spain, S.L.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    Earnings were insufficient to cover fixed charges for the years
    ended December&#160;31, 2002 and 2003, the period of May&#160;1
    to December&#160;31, 2004 and the six months ended June&#160;30,
    2006 by the amounts indicated in the table.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of calculating the ratio of earnings to fixed
    charges:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>&#147;earnings&#148;</I> is the amount resulting from adding
    the following items:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="3%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pre-tax income (loss) from continuing operations before
    adjustment for minority interests in consolidated subsidiaries;
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fixed charges; and
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    amortization of capitalized interest; and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    subtracting the following items:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="3%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    capitalized interest; and
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the minority interest in pre-tax income of subsidiaries that
    have not incurred fixed charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>&#147;fixed charges&#148;</I> represents interest expensed,
    capitalized interest, write-off of capitalized loan costs and
    amortization of capitalized expenses related to indebtedness.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='177'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PRICE
    RANGE OF COMMON UNITS AND DISTRIBUTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of September&#160;1, 2006, there were 20,238,072 common units
    outstanding, held by approximately 20&#160;holders of record.
    Our common units were first offered on the New York Stock
    Exchange on May&#160;5, 2005, at an initial price of
    $22.00&#160;per unit. Our common units are traded on the New
    York Stock Exchange under the symbol &#147;TGP.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth, for the periods indicated, the
    high and low sales prices for our common units, as reported on
    the New York Stock Exchange, and quarterly cash distributions
    declared per common unit. The last reported sale price of common
    units on the New York Stock Exchange on September&#160;28, 2006
    was $29.95 per common unit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="73%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Cash<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price Range</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Distributions<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>per Unit(1)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2006</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Year Ending December&#160;31, 2006 (through September&#160;28)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    28.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.925&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2005</B>(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Year Ended December&#160;31, 2005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    34.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.0607
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2006</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ending September&#160;30 (through September&#160;28)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    31.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ended June&#160;30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ended March&#160;31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.4625
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2005</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ended December&#160;31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    32.25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    27.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.4125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ended September&#160;30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.4125
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Quarter Ended June&#160;30(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.30
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.2357
</TD>
<TD nowrap align="left" valign="bottom">
    (3)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>2006</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ending September&#160;30 (through September&#160;28)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    30.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    29.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ended August&#160;31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ended July&#160;31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ended June&#160;30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.07
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ended May&#160;31
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Month Ended April&#160;30
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    Represents cash distributions attributable to the quarter and
    paid within 45&#160;days after the quarter.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    Period beginning May&#160;5, 2005.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    (3)&#160;
</TD>
    <TD align="left">    The distribution reflects the
    <FONT style="white-space: nowrap">52-day</FONT>
    period from May&#160;10, 2005 to June&#160;30, 2005.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE COMMON UNITS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units and our subordinated units represent limited
    partner interests in us. The holders of units are entitled to
    participate in partnership distributions and exercise the rights
    and privileges available to limited partners under our
    partnership agreement. For a description of the relative rights
    and privileges of holders of common units, holders of
    subordinated units and our general partner in and to partnership
    distributions, together with a description of the circumstances
    under which subordinated units convert into common units, please
    read &#147;Cash Distributions.&#148;
</DIV>
<A name='117'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Number of
    Units</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently have 20,238,072 common units outstanding, of which
    11,503,500 are held by the public and 8,734,572 are held by
    Teekay Shipping Corporation, which owns our general partner. We
    also have 14,734,572 subordinated units outstanding, for which
    there is no established public trading market, all of which are
    held by Teekay Shipping Corporation. The common units and the
    subordinated units represent an aggregate 98% limited partner
    interest and the general partner interest represents a 2%
    general partner interest in us.
</DIV>
<A name='118'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Issuance
    of Additional Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement authorizes us to issue an unlimited
    number of additional partnership securities and rights to buy
    partnership securities for the consideration and on the terms
    and conditions determined by our general partner without the
    approval of our unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may fund acquisitions through the issuance of additional
    common units or other equity securities. Holders of any
    additional common units we issue will be entitled to share
    equally with the then-existing holders of common units in our
    distributions of available cash. In addition, the issuance of
    additional common units or other equity securities interests may
    dilute the value of the interests of the then-existing holders
    of common units in our net assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In accordance with Marshall Islands law and the provisions of
    our partnership agreement, we may also issue additional
    partnership securities interests that, as determined by the
    general partner, have special voting or other rights to which
    the common units are not entitled.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon issuance of additional partnership securities, our general
    partner will be required to make additional capital
    contributions to the extent necessary to maintain its 2% general
    partner interest in us. In addition, our general partner and its
    affiliates have the right, which it may from time to time assign
    in whole or in part to any of its affiliates, to purchase common
    units, subordinated units or other equity securities whenever,
    and on the same terms that, we issue those securities to persons
    other than our general partner and its affiliates, to the extent
    necessary to maintain its and its affiliates&#146; percentage
    interest, including its interest represented by common units and
    subordinated units, that existed immediately prior to each
    issuance. Other holders of common units do not have similar
    preemptive rights to acquire additional common units or other
    partnership securities.
</DIV>
<A name='119'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Meetings;
    Voting</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unlike the holders of common stock in a corporation, the holders
    of our units have only limited voting rights on matters
    affecting our business. They have no right to elect our general
    partner (who manages our operations and activities) or the
    directors of our general partner on an annual or other
    continuing basis. On those matters that are submitted to a vote
    of unitholders, each record holder of a unit may vote according
    to the holder&#146;s percentage interest in us, although
    additional limited partner interests having special voting
    rights could be issued. However, if at any time any person or
    group, other than our general partner and its affiliates (or a
    direct or subsequently approved transferee of our general
    partner or its affiliates or a transferee approved by the board
    of directors of our general partner) acquires, in the aggregate,
    beneficial ownership of 20% or more of any class of units then
    outstanding, that person or group will lose voting rights on all
    of its units and the units may not be voted on any matter and
    will not be considered to be outstanding
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    when sending notices of a meeting of unitholders, calculating
    required votes, determining the presence of a quorum, or for
    other similar purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of our subordinated units sometimes vote as a single
    class together with the holders of our common units and
    sometimes vote as a class separate from the holders of common
    units. Holders of subordinated units, like holders of common
    units, have very limited voting rights. During the subordination
    period, common units (excluding common units held by our general
    partner and its affiliates) and subordinated units each vote
    separately as a class generally on the following matters:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a merger of our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a sale or exchange of all or substantially all of our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the election of a successor general partner in connection with
    certain withdrawals of our general partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dissolution or reconstitution of our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    some amendments to our partnership agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    some amendments to the operating agreement of our operating
    company or action taken by us as a member of the operating
    company if such amendment or action would materially and
    adversely affect our limited partners.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the subordinated units nor any common units held by our
    general partners or any of its affiliates are entitled to vote
    on approval of the withdrawal of our general partner or the
    transfer by our general partner of its general partner interest
    or incentive distribution rights under some circumstances.
    Removal of our general partner requires:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a
    <FONT style="white-space: nowrap">66-</FONT><FONT style="vertical-align: text-top; font-size: 70%;">2</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    vote of all outstanding units, voting as a single class;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the election of a successor general partner by the holders of a
    majority of the outstanding common units and subordinated units,
    voting as separate classes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described above regarding a person or group owning 20%
    or more of any class of units then outstanding, unitholders or
    assignees who are record holders of units on the record date
    will be entitled to notice of, and to vote at, any meetings of
    our limited partners and to act upon matters for which approvals
    may be solicited. Common units that are owned by an assignee who
    is a record holder, but who has not yet been admitted as a
    limited partner, will be voted by the general partner at the
    written direction of the record holder. Absent direction of this
    kind, the common units will not be voted, except that, in the
    case of common units held by our general partner on behalf of
    unpermitted citizen assignees, our general partner will
    distribute the votes on those common units in the same ratios as
    the votes of limited partners with respect to other units are
    cast.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any action that is required or permitted to be taken by the
    unitholders may be taken either at a meeting of the unitholders
    or without a meeting if consents in writing describing the
    action so taken are signed by holders of the number of units
    necessary to authorize or take that action at a meeting.
    Meetings of the unitholders may be called by our general partner
    or by unitholders owning at least 20% of the outstanding units
    of the class for which a meeting is proposed. Unitholders may
    vote either in person or by proxy at meetings. The holders of a
    majority of the outstanding units of the class or classes for
    which a meeting has been called, represented in person or by
    proxy, will constitute a quorum unless any action by the
    unitholders requires approval by holders of a greater percentage
    of the units, in which case the quorum will be the greater
    percentage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common units held in nominee or street name account will be
    voted by the broker or other nominee in accordance with the
    instruction of the beneficial owner unless the arrangement
    between the beneficial owner and his nominee provides otherwise.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='120'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Call
    Right</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If at any time our general partner and its affiliates hold more
    than 80% of the then-issued and outstanding partnership
    securities of any class, our general partner will have the
    right, which it may assign in whole or in part to any of its
    affiliates or to us, to acquire all, but not less than all, of
    the remaining partnership securities of the class held by
    unaffiliated persons as of a record date to be selected by our
    general partner, on at least 10 but not more than
    60&#160;days&#146; notice. The purchase price in this event is
    the greater of: (1)&#160;the highest cash price paid by either
    the general partner or any of its affiliates for any partnership
    securities of the class purchased within the 90&#160;days
    preceding the date on which our general partner first mails
    notice of its election to purchase those partnership securities;
    and (2)&#160;the current market price as of the date three days
    before the date the notice is mailed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of our general partner&#146;s right to purchase
    outstanding partnership securities, a holder of partnership
    securities may have the holder&#146;s partnership securities
    purchased at an undesirable time or price. The tax consequences
    to a unitholder of the exercise of this call right are the same
    as a sale by that unitholder of common units in the market.
    Please read &#147;Material U.S.&#160;Federal Income Tax
    Consequences&#160;&#151; Disposition of Common Units.&#148;
</DIV>
<A name='121'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange
    Listing</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common units are listed on the New York Stock Exchange,
    where they trade under the symbol &#147;TGP.&#148;
</DIV>
<A name='122'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Bank of New York serves as registrar and transfer agent for
    our common units. We pay all fees charged by the transfer agent
    for transfers of common units, except the following, which must
    be paid by unitholders:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    surety bond premiums to replace lost or stolen certificates,
    taxes and other governmental charges;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    special charges for services requested by a holder of a common
    unit;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other similar fees or charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There is no charge to unitholders for disbursements of our cash
    distributions. We will indemnify the transfer agent, its agents
    and each of their stockholders, directors, officers and
    employees against all claims and losses that may arise out of
    acts performed or omitted for its activities in that capacity,
    except for any liability due to any gross negligence or
    intentional misconduct of the indemnified person or entity.
</DIV>
<A name='123'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    of Common Units</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Transfers of a common unit will not be recorded by the transfer
    agent or recognized by us unless the transferee executes and
    delivers a transfer application. By executing and delivering a
    transfer application, the transferee of common units:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    becomes the record holder of the common units and is an assignee
    until admitted into our partnership as a substituted limited
    partner;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically requests admission as a substituted limited
    partner in our partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    agrees to be bound by the terms and conditions of, and executes,
    our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represents that the transferee has the capacity, power and
    authority to enter into our partnership agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    grants powers of attorney to officers of our general partner and
    any liquidator of us as specified in our partnership
    agreement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    gives the consents and approvals contained in our partnership
    agreement.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An assignee will become a substituted limited partner of our
    partnership for the transferred common units automatically upon
    the recording of the transfer on our books and records. Our
    general partner will cause any unrecorded transfers for which a
    completed and duly executed transfer application has been
    received to be recorded on our books and records no less
    frequently than quarterly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A transferee&#146;s broker, agent or nominee may complete,
    execute and deliver a transfer application. We are entitled to
    treat the nominee holder of a common unit as the absolute owner.
    In that case, the beneficial holder&#146;s rights are limited
    solely to those that it has against the nominee holder as a
    result of any agreement between the beneficial owner and the
    nominee holder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common units are securities and are transferable according to
    the laws governing transfer of securities. In addition to other
    rights acquired upon transfer, the transferor gives the
    transferee the right to request admission as a substituted
    limited partner in our partnership for the transferred common
    units. A purchaser or transferee of common units who does not
    execute and deliver a transfer application obtains only:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to assign the common unit to a purchaser or other
    transferee;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the right to transfer the right to seek admission as a
    substituted limited partner in our partnership for the
    transferred common units.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Thus, a purchaser or transferee of common units who does not
    execute and deliver a transfer application:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    will not receive cash distributions or U.S.&#160;federal income
    tax allocations, unless the common units are held in a nominee
    or &#147;street name&#148; account and the nominee or broker has
    executed and delivered a transfer application;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    may not receive some U.S.&#160;federal income tax information or
    reports furnished to record holders of common units.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The transferor of common units has a duty to provide the
    transferee with all information that may be necessary to
    transfer the common units. The transferor does not have a duty
    to ensure the execution of the transfer application by the
    transferee and has no liability or responsibility if the
    transferee neglects or chooses not to execute and forward the
    transfer application to the transfer agent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until a common unit has been transferred on our books, we and
    the transfer agent may treat the record holder of the unit as
    the absolute owner for all purposes, except as otherwise
    required by law or stock exchange regulations.
</DIV>
<A name='178'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Matters</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Merger, Sale, or Other Disposition of
    Assets.</I></B>&#160;&#160;A merger or consolidation of us
    requires the consent of our general partner, in addition to the
    unitholder vote described above under
    &#147;&#151;&#160;Meetings; Voting.&#148; However, our general
    partner will have no duty or obligation to consent to any merger
    or consolidation and may decline to do so free of any fiduciary
    duty or obligation whatsoever to us or the limited partners,
    including any duty to act in good faith or in the best interests
    of us or the limited partners. In addition, although our
    partnership agreement generally requires the unitholder vote
    described above &#147;&#151;&#160;Meetings; Voting&#148; for the
    sale, exchange or other disposition of all or substantially all
    of our assets in a single transaction or a series of related
    transactions, our general partner may mortgage, pledge,
    hypothecate or grant a security interest in all or substantially
    all of our assets without that approval. Our general partner may
    also sell all or substantially all of our assets under a
    foreclosure or other realization upon those encumbrances without
    that approval. The unitholders are not entitled to
    dissenters&#146; rights of appraisal under our partnership
    agreement or applicable law in the event of a conversion, merger
    or consolidation, a sale of all or substantially all of our
    assets, or any other transaction or event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Registration Rights.</I></B>&#160;&#160;Under our
    partnership agreement, we have agreed to register for resale
    under the U.S.&#160;Securities Act of 1933 and applicable state
    securities laws any common units, subordinated units or other
    partnership securities proposed to be sold by our general
    partner or any of its affiliates or their
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    assignees if an exemption from the registration requirements is
    not otherwise available or advisable. These registration rights
    continue for two years following any withdrawal or removal of
    Teekay GP L.L.C. as our general partner. We are obligated to pay
    all expenses incidental to the registration, excluding
    underwriting discounts and commissions.
</DIV>
<A name='124'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Our Partnership Agreement</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A copy of our partnership agreement is filed as an exhibit to
    the registration statement of which this prospectus is a part. A
    summary of the important provisions of our partnership agreement
    and the rights and privileges of our unitholders is included in
    our registration statement on
    <FONT style="white-space: nowrap">Form&#160;8-A/A</FONT>
    as filed with the SEC on September&#160;29, 2006, including any
    subsequent amendments or reports filed for the purpose of
    updating such description. Please read &#147;Where You Can Find
    More Information.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='125'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CASH
    DISTRIBUTIONS</FONT></B>
</DIV>
</A>
<A name='126'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement provides that within approximately
    45&#160;days after the end of each quarter we will distribute
    all of our available cash to unitholders of record on the
    applicable record date.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Definition
    of Available Cash</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Available cash generally means, for each fiscal quarter, all
    cash on hand at the end of the quarter (including our
    proportionate share of cash on hand of certain subsidiaries we
    do not wholly own):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less the amount of cash reserves (including our proportionate
    share of cash reserves of certain subsidiaries we do not wholly
    own) established by our general partner to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide for the proper conduct of our business (including
    reserves for future capital expenditures and for our anticipated
    credit needs);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with applicable law, any of our debt instruments, or
    other agreements;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide funds for distributions to our unitholders and to our
    general partner for any one or more of the next four quarters;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    plus all cash on hand (including our proportionate share of cash
    on hand of certain subsidiaries we do not wholly own) on the
    date of determination of available cash for the quarter
    resulting from working capital borrowings made after the end of
    the quarter. Working capital borrowings are generally borrowings
    that are made under our credit agreement and in all cases are
    used solely for working capital purposes or to pay distributions
    to partners.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Minimum
    Quarterly Distribution</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common unitholders are entitled under our partnership agreement
    to receive a quarterly distribution of $0.4125&#160;per unit, or
    $1.65&#160;per year, prior to any distribution on our
    subordinated units to the extent we have sufficient cash from
    our operations after establishment of cash reserves and payment
    of fees and expenses, including payments to our general partner.
    Our general partner has the authority to determine the amount of
    our available cash for any quarter. This determination, as well
    as all determinations made by the general partner, must be made
    in good faith. Our general partner&#146;s board of directors
    declared an increase in our quarterly distribution to
    $0.4625&#160;per unit, or $1.85&#160;per year, commencing with
    the first quarter of 2006. There is no guarantee that we will
    pay the quarterly distribution in this amount or the minimum
    quarterly distribution on the common units in any quarter, and
    we will be prohibited from making any distributions to
    unitholders if it would cause an event of default, or an event
    of default is existing, under our credit facilities.
</DIV>
<A name='127'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Operating
    Surplus and Capital Surplus</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All cash distributed to unitholders is characterized as either
    &#147;operating surplus&#148; or &#147;capital surplus.&#148; We
    treat distributions of available cash from operating surplus
    differently than distributions of available cash from capital
    surplus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Definition
    of Operating Surplus</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Operating surplus for any period generally means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our cash balance (including our proportionate share of cash
    balances of certain subsidiaries we do not wholly own) on the
    closing date of our initial public offering, other than cash
    reserved to terminate interest rate swap agreements; plus
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    $10&#160;million (as described below); plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of our cash receipts (including our proportionate share of
    cash receipts of certain subsidiaries we do not wholly own)
    after the closing of our initial public offering, excluding cash
    from (1)&#160;borrowings, other than working capital borrowings,
    (2)&#160;sales of equity and debt securities, (3)&#160;sales or
    other dispositions of assets outside the ordinary course of
    business, (4)&#160;termination of interest rate swap agreements,
    (5) capital contributions or (6)&#160;corporate reorganizations
    or restructurings; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    working capital borrowings (including our proportionate share of
    working capital borrowings by certain subsidiaries we do not
    wholly own) made after the end of a quarter but before the date
    of determination of operating surplus for the quarter; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest paid on debt incurred (including periodic net payments
    under related interest rate swap agreements) and cash
    distributions paid on equity securities issued, in each case, to
    finance all or any portion of the construction, replacement or
    improvement of a capital asset such as vessels during the period
    from such financing until the earlier to occur of the date the
    capital asset is put into service or the date that it is
    abandoned or disposed of; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest paid on debt incurred (including periodic net payments
    under related interest rate swap agreements) and cash
    distributions paid on equity securities issued, in each case, to
    pay the construction period interest on debt incurred, or to pay
    construction period distributions on equity issued, to finance
    the construction projects described in the immediately preceding
    bullet; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all of our cash operating expenditures (including our
    proportionate share of cash operating expenditures of certain
    subsidiaries we do not wholly own) after the closing of our
    initial public offering and the repayment of working capital
    borrowings, but not (1)&#160;the repayment of other borrowings,
    (2)&#160;actual maintenance capital expenditures or expansion
    capital expenditures, (3)&#160;transaction expenses (including
    taxes) related to interim capital transactions or
    (4)&#160;distributions; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    estimated maintenance capital expenditures and the amount of
    cash reserves (including our proportionate share of cash
    reserves of certain subsidiaries we do not wholly own)
    established by our general partner to provide funds for future
    operating expenditures.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above, operating surplus does not only reflect
    actual cash on hand that is available for distribution to our
    unitholders. For example, it also includes a provision that
    enables us, if we choose, to distribute as operating surplus up
    to $10&#160;million of cash we may receive from non-operating
    sources, such as asset sales, issuances of securities and
    long-term borrowings, that would otherwise be distributed as
    capital surplus. In addition, the effect of including, as
    described above, certain cash distributions on equity securities
    or interest payments on debt in operating surplus is to increase
    operating surplus by the amount of any such cash distributions
    or interest payments. As a result, we may also distribute as
    operating surplus up to the amount of any such cash
    distributions or interest payments of cash we receive from
    non-operating sources.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Capital
    Expenditures</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of determining operating surplus, maintenance
    capital expenditures are those capital expenditures required to
    maintain over the long term the operating capacity of or the
    revenue generated by our capital assets, and expansion capital
    expenditures are those capital expenditures that increase the
    operating capacity of or the revenue generated by our capital
    assets. To the extent, however, that capital expenditures
    associated with acquiring a new vessel increase the revenues or
    the operating capacity of our fleet, those capital expenditures
    are classified as expansion capital expenditures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Examples of maintenance capital expenditures include capital
    expenditures associated with dry-docking a vessel or acquiring a
    new vessel to the extent such expenditures are incurred to
    maintain the operating capacity of or the revenue generated by
    our fleet. Maintenance capital expenditures also include
    interest
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (and related fees) on debt incurred and distributions on equity
    issued to finance the construction of a replacement vessel and
    paid during the construction period, which we define as the
    period beginning on the date that we enter into a binding
    construction contract and ending on the earlier of the date that
    the replacement vessel commences commercial service or the date
    that the replacement vessel is abandoned or disposed of. Debt
    incurred to pay or equity issued to fund construction period
    interest payments, and distributions on such equity, also are
    considered maintenance capital expenditures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because our maintenance capital expenditures can be very large
    and vary significantly in timing, the amount of our actual
    maintenance capital expenditures may differ substantially from
    period to period, which could cause similar fluctuations in the
    amounts of operating surplus, adjusted operating surplus, and
    available cash for distribution to our unitholders if we
    subtracted actual maintenance capital expenditures from
    operating surplus each quarter. Accordingly, to eliminate the
    effect on operating surplus of these fluctuations, our
    partnership agreement requires that an amount equal to an
    estimate of the average quarterly maintenance capital
    expenditures necessary to maintain the operating capacity of or
    the revenue generated by our capital assets over the long term
    be subtracted from operating surplus each quarter, as opposed to
    the actual amounts spent. The amount of estimated maintenance
    capital expenditures deducted from operating surplus is subject
    to review and change by the board of directors of our general
    partner at least once a year, provided that any change must be
    approved by our conflicts committee. The estimate is made at
    least annually and whenever an event occurs that is likely to
    result in a material adjustment to the amount of our maintenance
    capital expenditures, such as a major acquisition or the
    introduction of new governmental regulations that affects our
    fleet. For purposes of calculating operating surplus, any
    adjustment to this estimate is prospective only.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The use of estimated maintenance capital expenditures in
    calculating operating surplus has the following effects:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    it reduces the risk that actual maintenance capital expenditures
    in any one quarter will be large enough to make operating
    surplus less than the minimum quarterly distribution to be paid
    on all the units for that quarter and subsequent quarters;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    it reduces the need for us to borrow under our working capital
    facility to pay distributions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    it is more difficult for us to raise our distribution on our
    units above the minimum quarterly distribution and pay incentive
    distributions to our general partner;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    it reduces the likelihood that a large maintenance capital
    expenditure in a period will prevent the general partner&#146;s
    affiliates from being able to convert some or all of their
    subordinated units into common units since the effect of an
    estimate is to spread the expected expense over several periods,
    mitigating the effect of the actual payment of the expenditure
    on any single period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Definition
    of Capital Surplus</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Capital surplus generally is generated only by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    borrowings other than working capital borrowings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales of debt and equity securities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sales or other dispositions of assets for cash, other than
    inventory, accounts receivable and other current assets sold in
    the ordinary course of business or non-current assets sold as
    part of normal retirements or replacements of assets.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Characterization
    of Cash Distributions</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We treat all available cash distributed as coming from operating
    surplus until the sum of all available cash distributed since we
    began operations equals the operating surplus as of the most
    recent date of determination of available cash. We treat any
    amount distributed in excess of operating surplus, regardless
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of its source, as capital surplus. We do not anticipate that we
    will make any distributions from capital surplus.
</DIV>
<A name='128'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Subordination
    Period</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the subordination period, which we define below, the
    common units will have the right to receive distributions of
    available cash from operating surplus in an amount equal to the
    minimum quarterly distribution of $0.4125&#160;per quarter, plus
    any arrearages in the payment of the minimum quarterly
    distribution on the common units from prior quarters, before any
    distributions of available cash from operating surplus may be
    made on the subordinated units. The purpose of the subordinated
    units is to increase the likelihood that during the
    subordination period there will be available cash to be
    distributed on the common units.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Definition
    of Subordination Period</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The subordination period generally will extend until the first
    day of any quarter, beginning after March&#160;31, 2010, that
    each of the following tests are met:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    distributions of available cash from operating surplus on each
    of the outstanding common units and subordinated units equaled
    or exceeded the minimum quarterly distribution for each of the
    three consecutive, non-overlapping four-quarter periods
    immediately preceding that date;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the &#147;adjusted operating surplus&#148; (as defined below)
    generated during each of the three consecutive, non-overlapping
    four-quarter periods immediately preceding that date equaled or
    exceeded the sum of the minimum quarterly distributions on all
    of the outstanding common units and subordinated units during
    those periods on a fully diluted basis and the related
    distribution on the 2% general partner interest during those
    periods;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the unitholders remove our general partner without cause, the
    subordination period may end before March&#160;31, 2010.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Early
    Conversion of Subordinated Units</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before the end of the subordination period, 50% of the
    subordinated units, or up to 7,367,286 subordinated units, may
    convert into common units on a one-for-one basis immediately
    after the distribution of available cash to the partners in
    respect of any quarter ending on or after:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    March&#160;31, 2008 with respect to 25% of the subordinated
    units outstanding immediately after our initial public
    offering;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    March&#160;31, 2009 with respect to a further 25% of the
    subordinated units outstanding immediately after our initial
    public offering.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The early conversions will occur if at the end of the applicable
    quarter each of the following occurs:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    distributions of available cash from operating surplus on each
    of the outstanding common units and subordinated units equaled
    or exceeded the minimum quarterly distribution for each of the
    three consecutive, non-overlapping four-quarter periods
    immediately preceding that date;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the adjusted operating surplus generated during each of the
    three consecutive, non-overlapping four-quarter periods
    immediately preceding that date equaled or exceeded the sum of
    the minimum quarterly distributions on all of the outstanding
    common units and subordinated units during those periods on a
    fully diluted basis and the related distribution on the 2%
    general partner interest during those periods;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, the second early conversion of the subordinated units
    may not occur until at least one year following the first early
    conversion of the subordinated units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of determining whether sufficient adjusted
    operating surplus has been generated under these conversion
    tests, the conflicts committee of our general partner&#146;s
    board of directors may adjust adjusted operating surplus upwards
    or downwards if it determines in good faith that the estimated
    amount of maintenance capital expenditures used in the
    determination of operating surplus was materially incorrect,
    based on circumstances prevailing at the time of original
    determination of the estimate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Definition
    of Adjusted Operating Surplus</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Adjusted operating surplus for any period generally means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating surplus generated with respect to that period; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any net increase in working capital borrowings with respect to
    that period; less
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any net reduction in cash reserves for operating expenditures
    with respect to that period not relating to an operating
    expenditure made with respect to that period; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any net decrease in working capital borrowings with respect to
    that period; plus
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any net increase in cash reserves for operating expenditures
    with respect to that period required by any debt instrument for
    the repayment of principal, interest or premium.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Adjusted operating surplus is intended to reflect the cash
    generated from operations during a particular period and
    therefore excludes net increases in working capital borrowings
    and net drawdowns of reserves of cash generated in prior periods.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Effect
    of Expiration of the Subordination Period</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon expiration of the subordination period, each outstanding
    subordinated unit will convert into one common unit and will
    then participate pro rata with the other common units in
    distributions of available cash. In addition, if the unitholders
    remove our general partner other than for cause and units held
    by our general partner and its affiliates are not voted in favor
    of such removal:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the subordination period will end and each subordinated unit
    will immediately convert into one common unit;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our general partner will have the right to convert its general
    partner interest and, if any, its incentive distribution rights
    into common units or to receive cash in exchange for those
    interests.
</TD>
</TR>

</TABLE>
<A name='129'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash From Operating Surplus During the
    Subordination Period</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We make distributions of available cash from operating surplus
    for any quarter during the subordination period in the following
    manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, 98% to the common unitholders, pro rata, and 2% to our
    general partner, until we distribute for each outstanding common
    unit an amount equal to the minimum quarterly distribution for
    that quarter;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    second, 98% to the common unitholders, pro rata, and 2% to our
    general partner, until we distribute for each outstanding common
    unit an amount equal to any arrearages in payment of the minimum
    quarterly distribution on the common units for any prior
    quarters during the subordination period;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    third, 98% to the subordinated unitholders, pro rata, and 2% to
    our general partner, until we distribute for each subordinated
    unit an amount equal to the minimum quarterly distribution for
    that quarter;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, in the manner described in &#147;Incentive
    Distribution Rights&#148; below.
</TD>
</TR>

</TABLE>
<A name='130'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Available Cash From Operating Surplus After the Subordination
    Period</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will make distributions of available cash from operating
    surplus for any quarter after the subordination period in the
    following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, 98% to all unitholders, pro rata, and 2% to our general
    partner, until we distribute for each outstanding unit an amount
    equal to the minimum quarterly distribution for that
    quarter;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, in the manner described in &#147;Incentive
    Distribution Rights&#148; below.
</TD>
</TR>

</TABLE>
<A name='131'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Incentive
    Distribution Rights</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Incentive distribution rights represent the right to receive an
    increasing percentage of quarterly distributions of available
    cash from operating surplus after the minimum quarterly
    distribution and the target distribution levels have been
    achieved. Our general partner currently holds the incentive
    distribution rights, but may transfer these rights separately
    from its general partner interest, subject to restrictions in
    the partnership agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If for any quarter:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we have distributed available cash from operating surplus to the
    common and subordinated unitholders in an amount equal to the
    minimum quarterly distribution;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we have distributed available cash from operating surplus on
    outstanding common units in an amount necessary to eliminate any
    cumulative arrearages in payment of the minimum quarterly
    distribution;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    then, we will distribute any additional available cash from
    operating surplus for that quarter among the unitholders and our
    general partner in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, 98% to all unitholders, pro rata, and 2% to our general
    partner, until each unitholder receives a total of
    $0.4625&#160;per unit for that quarter (the &#147;first target
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    second, 85% to all unitholders, pro rata, and 15% to our general
    partner, until each unitholder receives a total of
    $0.5375&#160;per unit for that quarter (the &#147;second target
    distribution&#148;);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    third, 75% to all unitholders, pro rata, and 25% to our general
    partner, until each unitholder receives a total of
    $0.6500&#160;per unit for that quarter (the &#147;third target
    distribution&#148;);&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, 50% to all unitholders, pro rata, and 50% to our
    general partner.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In each case, the amount of the target distribution set forth
    above is exclusive of any distributions to common unitholders to
    eliminate any cumulative arrearages in payment of the minimum
    quarterly distribution. The percentage interests set forth above
    for our general partner include its 2% general partner interest
    and assume the general partner has not transferred the incentive
    distribution rights.
</DIV>
<A name='132'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Percentage
    Allocations of Available Cash From Operating Surplus</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table illustrates the percentage allocations of
    the additional available cash from operating surplus among the
    unitholders and our general partner up to the various target
    distribution levels. The amounts set forth under &#147;Marginal
    Percentage Interest in Distributions&#148; are the percentage
    interests of the unitholders and our general partner in any
    available cash from operating surplus we distribute up to and
    including the corresponding amount in the column &#147;Total
    Quarterly Distribution Target Amount,&#148; until available cash
    from operating surplus we distribute reaches the next target
    distribution level, if any. The percentage interests shown for
    the unitholders and our general partner for the minimum
    quarterly
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    42
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    distribution are also applicable to quarterly distribution
    amounts that are less than the minimum quarterly distribution.
    The percentage interests shown for our general partner include
    its 2% general partner interest and assume the general partner
    has not transferred the incentive distribution rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="47%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="26%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Total Quarterly<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Distribution Target<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Marginal Percentage Interest in Distributions</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Amount</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Unitholders</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>General Partner</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Minimum Quarterly Distribution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    $0.4125
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    98
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    First Target Distribution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    up to $0.4625
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Second Target Distribution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    above $0.4625 up to $0.5375
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Third Target Distribution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    above $0.5375 up to $0.6500
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Thereafter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    above $0.6500
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<A name='133'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    From Capital Surplus</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">How
    Distributions From Capital Surplus Will Be Made</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will make distributions of available cash from capital
    surplus, if any, in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, 98% to all unitholders, pro rata, and 2% to our general
    partner, until we distribute for each common unit that was
    issued in this offering, an amount of available cash from
    capital surplus equal to the initial public offering price;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    second, 98% to the common unitholders, pro rata, and 2% to our
    general partner, until we distribute for each common unit, an
    amount of available cash from capital surplus equal to any
    unpaid arrearages in payment of the minimum quarterly
    distribution on the common units;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, we will make all distributions of available cash
    from capital surplus as if they were from operating surplus.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Effect
    of a Distribution From Capital Surplus</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The partnership agreement treats a distribution of capital
    surplus as the repayment of the initial unit price from our
    initial public offering on May&#160;10, 2005, which is a return
    of capital. That initial public offering price less any
    distributions of capital surplus per unit is referred to as the
    &#147;unrecovered initial unit price.&#148; Each time a
    distribution of capital surplus is made, the minimum quarterly
    distribution and the target distribution levels will be reduced
    in the same proportion as the corresponding reduction in the
    unrecovered initial unit price. Because distributions of capital
    surplus will reduce the minimum quarterly distribution, after
    any of these distributions are made, it may be easier for our
    general partner to receive incentive distributions and for the
    subordinated units to convert into common units. However, any
    distribution of capital surplus before the unrecovered initial
    unit price is reduced to zero cannot be applied to the payment
    of the minimum quarterly distribution or any arrearages.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Once we distribute capital surplus on a unit issued in our
    initial public offering in an amount equal to the initial public
    offering price for our initial public offering, we will reduce
    the minimum quarterly distribution and the target distribution
    levels to zero. We will then make all future distributions from
    operating surplus, with 50% being paid to the holders of units
    and 50% to our general partner. The percentage interests shown
    for our general partner include its 2% general partner interest
    and assume the general partner has not transferred the incentive
    distribution rights.
</DIV>
<A name='134'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Adjustment
    to the Minimum Quarterly Distribution and Target Distribution
    Levels</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to adjusting the minimum quarterly distribution and
    target distribution levels to reflect a distribution of capital
    surplus, if we combine our units into fewer units or subdivide
    our units into a greater number of units, we will
    proportionately adjust:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the minimum quarterly distribution;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the target distribution levels;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    43
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the unrecovered initial unit price;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the number of common units issuable during the subordination
    period without a unitholder vote.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For example, if a two-for-one split of the common units should
    occur, the minimum quarterly distribution, the target
    distribution levels and the unrecovered initial unit price would
    each be reduced to 50% of its initial level and the number of
    common units issuable during the subordination period without a
    unitholder vote would double. We will not make any adjustment by
    reason of the issuance of additional units for cash or property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if legislation is enacted or if existing law is
    modified or interpreted by a governmental taxing authority so
    that we become taxable as a corporation or otherwise subject to
    taxation as an entity for U.S.&#160;federal, state, local or
    <FONT style="white-space: nowrap">non-U.S.&#160;income</FONT>
    tax purposes, we will reduce the minimum quarterly distribution
    and the target distribution levels for each quarter by
    multiplying each distribution level by a fraction, the numerator
    of which is available cash for that quarter and the denominator
    of which is the sum of available cash for that quarter plus the
    general partner&#146;s estimate of our aggregate liability for
    the quarter for such income taxes payable by reason of such
    legislation or interpretation. To the extent that the actual tax
    liability differs from the estimated tax liability for any
    quarter, the difference will be accounted for in subsequent
    quarters.
</DIV>
<A name='135'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions
    of Cash Upon Liquidation</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">General</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we dissolve in accordance with the partnership agreement, we
    will sell or otherwise dispose of our assets in a process called
    liquidation. We will first apply the proceeds of liquidation to
    the payment of our creditors. We will distribute any remaining
    proceeds to the unitholders and our general partner, in
    accordance with their capital account balances, as adjusted to
    reflect any gain or loss upon the sale or other disposition of
    our assets in liquidation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The allocations of gain and loss upon liquidation are intended,
    to the extent possible, to entitle the holders of outstanding
    common units to a preference over the holders of outstanding
    subordinated units upon our liquidation, to the extent required
    to permit common unitholders to receive their unrecovered
    initial unit price plus the minimum quarterly distribution for
    the quarter during which liquidation occurs plus any unpaid
    arrearages in payment of the minimum quarterly distribution on
    the common units. However, there may not be sufficient gain upon
    our liquidation to enable the holders of common units to fully
    recover all of these amounts, even though there may be cash
    available for distribution to the holders of subordinated units.
    Any further net gain recognized upon liquidation will be
    allocated in a manner that takes into account the incentive
    distribution rights of our general partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Manner
    of Adjustments for Gain</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The manner of the adjustment for gain is set forth in the
    partnership agreement. If our liquidation occurs before the end
    of the subordination period, we will allocate any gain to the
    partners in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, to our general partner and the holders of units who have
    negative balances in their capital accounts to the extent of and
    in proportion to those negative balances;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    second, 98% to the common unitholders, pro rata, and 2% to our
    general partner, until the capital account for each common unit
    is equal to the sum of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the unrecovered initial unit price;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the amount of the minimum quarterly distribution for
    the quarter during which our liquidation occurs;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;any unpaid arrearages in payment of the minimum
    quarterly distribution;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    44
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    third, 98% to the subordinated unitholders, pro rata, and 2% to
    our general partner until the capital account for each
    subordinated unit is equal to the sum of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the unrecovered initial unit price;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the amount of the minimum quarterly distribution for
    the quarter during which our liquidation occurs;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fourth, 98% to all unitholders, pro rata, and 2% to our general
    partner, until we allocate under this paragraph an amount per
    unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the sum of the excess of the first target distribution
    per unit over the minimum quarterly distribution per unit for
    each quarter of our existence; less
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the minimum
    quarterly distribution per unit that we distributed 98% to the
    unitholders, pro rata, and 2% to our general partner, for each
    quarter of our existence;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fifth, 85% to all unitholders, pro rata, and 15% to our general
    partner, until we allocate under this paragraph an amount per
    unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the sum of the excess of the second target distribution
    per unit over the first target distribution per unit for each
    quarter of our existence; less
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the first
    target distribution per unit that we distributed 85% to the
    unitholders, pro rata, and 15% to our general partner for each
    quarter of our existence;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sixth, 75% to all unitholders, pro rata, and 25% to our general
    partner, until we allocate under this paragraph an amount per
    unit equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the sum of the excess of the third target distribution
    per unit over the second target distribution per unit for each
    quarter of our existence; less
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the second
    target distribution per unit that we distributed 75% to the
    unitholders, pro rata, and 25% to our general partner for each
    quarter of our existence;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, 50% to all unitholders, pro rata, and 50% to our
    general partner.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The percentage interests set forth above for our general partner
    include its 2% general partner interest and assume the general
    partner has not transferred the incentive distribution rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the liquidation occurs after the end of the subordination
    period, the distinction between common units and subordinated
    units will disappear, so that clause&#160;(3) of the second
    bullet point above and all of the third bullet point above will
    no longer be applicable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Manner
    of Adjustments for Losses</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If our liquidation occurs before the end of the subordination
    period, we will generally allocate any loss to our general
    partner and the unitholders in the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    first, 98% to holders of subordinated units in proportion to the
    positive balances in their capital accounts and 2% to our
    general partner, until the capital accounts of the subordinated
    unitholders have been reduced to zero;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    second, 98% to the holders of common units in proportion to the
    positive balances in their capital accounts and 2% to our
    general partner, until the capital accounts of the common
    unitholders have been reduced to zero;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    thereafter, 100% to our general partner.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    45
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the liquidation occurs after the end of the subordination
    period, the distinction between common units and subordinated
    units will disappear, so that the first bullet point above will
    no longer be applicable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Adjustments
    to Capital Accounts</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will make adjustments to capital accounts upon the issuance
    of additional units. In doing so, we will allocate any
    unrealized and, for tax purposes, unrecognized gain or loss
    resulting from the adjustments to the existing unitholders and
    our general partner in the same manner as we allocate gain or
    loss upon liquidation. In the event that we make positive
    adjustments to the capital accounts upon the issuance of
    additional units, we will allocate any later negative
    adjustments to the capital accounts resulting from the issuance
    of additional units or upon our liquidation in a manner which
    results, to the extent possible, in our general partner&#146;s
    and unitholders&#146; capital account balances equaling the
    amount which they would have been if no earlier positive
    adjustments to the capital accounts had been made.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    46
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='136'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF DEBT SECURITIES</FONT></B>
</DIV>
</A>
<A name='137'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The debt securities we may offer and sell pursuant to this
    prospectus will be:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our direct general obligations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    either senior debt securities or subordinated debt
    securities;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    issued under an indenture between us and the Trustee thereunder.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Partners L.P. may issue debt securities in one or
    more series, and Teekay LNG Finance Corp. may be the co-issuer
    of one or more series of debt securities. Teekay LNG Finance
    Corp. was incorporated under the laws of the Republic of the
    Marshall Islands in August 2006 and is wholly owned by Teekay
    LNG Partners L.P. Its activities will be limited to co-issuing
    debt securities and engaging in other related activities. When
    used in this section &#147;Description of Debt Securities,&#148;
    the terms &#147;we,&#148; &#147;us,&#148; &#147;our&#148; and
    &#147;issuers&#148; refer jointly to Teekay LNG Partners L.P.
    and Teekay LNG Finance Corp., and the terms &#147;Teekay LNG
    Partners L.P.&#148; and &#147;Teekay LNG Finance Corp.&#148;
    refer strictly to Teekay LNG Partners L.P. and Teekay LNG
    Finance Corp., respectively.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we offer senior debt securities, we will issue them under a
    senior indenture. If we issue subordinated debt securities, we
    will issue them under a subordinated indenture. A form of each
    indenture is filed as an exhibit to the registration statement
    of which this prospectus is a part. Please read &#147;Where You
    Can Find More Information&#148; for information on how to obtain
    copies of the indentures. We have not restated either indenture
    in its entirety in this description. You should read the
    relevant indenture because it, and not this description,
    controls the rights of holders of the debt securities.
    Capitalized terms used in this summary have the meanings
    specified in the respective indentures.
</DIV>
<A name='138'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Specific
    Terms of Each Series of Debt Securities to be Described in the
    Prospectus Supplement</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus supplement and a supplemental indenture or
    authorizing resolutions of our general partner&#146;s board of
    directors relating to any series of debt securities that we may
    offer will include specific terms relating to the offering.
    These terms will include some or all of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether Teekay LNG Finance Corp. will be a co-issuer of the debt
    securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Subsidiary Guarantors, if any, of the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the debt securities are senior or subordinated debt
    securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the title of the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the total principal amount of the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the assets, if any, that are pledged as security for the payment
    of the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether we will issue the debt securities in individual
    certificates to each holder in registered form, or in the form
    of temporary or permanent global securities held by a depository
    on behalf of the holders;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices at which we will issue the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the portion of the principal amount of the debt securities that
    will be payable if the maturity of the debt securities is
    accelerated;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the currency or currency unit in which the debt securities will
    be payable, if not U.S.&#160;Dollars;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the dates on which the principal of the debt securities will be
    payable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest rate that the debt securities will bear and the
    interest payment dates for the debt securities;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the debt securities are convertible into or exchangeable
    for other securities, and the conversion or exchange rate and
    other related terms, conditions and features;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any optional redemption provisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any sinking fund or other provisions that would obligate us to
    repurchase or otherwise redeem the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any changes or additions to events of default or covenants
    described in this prospectus;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other terms of the debt securities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This description of debt securities will be deemed modified,
    amended or supplemented by any description of any series of debt
    securities set forth in a prospectus supplement related to that
    series.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of this prospectus, any reference to the payment of
    principal of, or any premium or interest on, debt securities
    will include additional amounts if required by the terms of the
    debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may issue debt securities with terms different from those of
    debt securities that may already have been issued. Without the
    consent of the holders thereof, we may reopen a previous issue
    of a series of debt securities and issue additional debt
    securities of that series unless the reopening was restricted
    when that series was created.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer and sell debt securities, including original issue
    discount debt securities, at a substantial discount below their
    principal amount. The prospectus supplement will describe
    special U.S.&#160;federal income tax and other considerations
    applicable to those securities. In addition, the prospectus
    supplement may describe certain special U.S.&#160;federal income
    tax or other considerations applicable to any debt securities
    that are denominated in a currency other than U.S.&#160;Dollars.
</DIV>
<A name='139'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Subsidiary
    Guarantees</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If specified in the prospectus supplement for a series of debt
    securities, the subsidiaries of Teekay LNG Partners L.P.
    specified in the prospectus supplement will unconditionally
    guarantee, on a joint and several basis, the full and prompt
    payment of principal of, premium, if any, and interest on the
    debt securities of that series when and as the same become due
    and payable, whether at maturity, upon redemption or repurchase,
    by declaration of acceleration or otherwise. The prospectus
    supplement will describe any limitation on the maximum amount of
    any particular guarantee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The guarantees will be general obligations of the Subsidiary
    Guarantors. Guarantees of subordinated debt securities of Teekay
    LNG Partners L.P. will be subordinated to the Senior
    Indebtedness of the Subsidiary Guarantors on the same basis as
    the subordinated debt securities are subordinated to the Senior
    Indebtedness of Teekay LNG Partners L.P. Please read
    &#147;&#151;&#160;Provisions Relating Only to the Subordinated
    Debt Securities&#148; below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Releases</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The guarantee of any Subsidiary Guarantor may be released under
    certain circumstances. If we exercise our legal or covenant
    defeasance option with respect to debt securities of a
    particular series as described below in
    &#147;&#151;&#160;Defeasance,&#148; each Subsidiary Guarantor
    will be released with respect to that series. In addition, if no
    default has occurred and is continuing under the applicable
    indenture, and to the extent not otherwise prohibited by the
    indenture, a Subsidiary Guarantor will be unconditionally
    released and discharged from its guarantee:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically upon any sale, exchange or transfer, whether by
    way of merger or otherwise, to any person that is not our
    affiliate, of all of our direct or indirect limited partnership
    or other equity interests in the Subsidiary Guarantor;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    automatically upon the merger of the Subsidiary Guarantor into
    us or any other Subsidiary Guarantor or the liquidation and
    dissolution of the Subsidiary Guarantor;&#160;or
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    48
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    following delivery of a written notice by us to the Trustee,
    upon the release or discharge of all guarantees by the
    Subsidiary Guarantor of any debt of ours for borrowed money or
    for a guarantee thereof (other than any series of debt
    securities under the indenture), except a discharge or release
    as a result of payment under such guarantees.
</TD>
</TR>

</TABLE>
<A name='140'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consolidation,
    Merger or Asset Sale</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each indenture will, in general, allow us or any Subsidiary
    Guarantor to consolidate or merge with or into another entity.
    It will also allow us and each Subsidiary Guarantor to sell,
    lease, transfer or otherwise dispose of all or substantially all
    of our or its assets to another entity. If this happens, the
    remaining or acquiring entity must assume all of our or the
    Subsidiary Guarantor&#146;s responsibilities and liabilities
    under the indenture, including the payment of all amounts due on
    the debt securities and performance of our or the Subsidiary
    Guarantor&#146;s covenants in the indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, each indenture will impose certain requirements
    relating to any such consolidation or merger with or into
    another entity, or any sale, lease, transfer or other
    disposition of all or substantially all of our assets, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the remaining or acquiring entity must be organized under the
    laws of the Republic of the Marshall Islands, the United States
    (or any state thereof) or other specified jurisdictions;
    provided that Teekay LNG Finance Corp. may not merge or
    consolidate with or into another entity other than a corporation
    satisfying such organizational requirement for so long as Teekay
    LNG Partners L.P. is not a corporation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the remaining or acquiring entity must assume our or such
    Subsidiary Guarantor&#146;s obligations under the
    indenture;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    immediately after giving effect to the transaction, no Default
    or Event of Default (as defined below under
    &#147;&#151;&#160;Events of Default and Remedies&#148;) may
    exist.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The remaining or acquiring entity will be substituted for us or
    the Subsidiary Guarantor in the indenture with the same effect
    as if it had been an original party to the indenture, and we or
    the Subsidiary Guarantor will be relieved from any further
    obligations under the indenture.
</DIV>
<A name='141'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Protection in the Event of a Change of Control</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise set forth in the prospectus supplement, the
    debt securities will not contain any provisions that protect the
    holders of the debt securities in the event of a change of
    control of us or in the event of a highly leveraged transaction,
    whether or not such transaction results in a change of control
    of us.
</DIV>
<A name='142'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Modification
    of Indentures</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may supplement or amend an indenture if the holders of a
    majority in aggregate principal amount of the outstanding debt
    securities of each series issued under the indenture and
    affected by the supplement or amendment consent to it. In
    addition, the holders of a majority in aggregate principal
    amount of the outstanding debt securities of any series may
    waive past defaults under the indenture and compliance by us
    with our covenants with respect to the debt securities of that
    series only. Those holders may not, however, waive any default
    in any payment on any debt security of that series or compliance
    with a provision that cannot be supplemented or amended without
    the consent of each affected holder. Without the consent of each
    outstanding debt security affected, no modification of the
    indenture or waiver may:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the principal amount of debt securities whose holders
    must consent to an amendment, supplement or waiver;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the principal or change the fixed maturity of any debt
    security;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    49
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce or waive any premium payable upon redemption of any debt
    security or alter or waive any other redemption provisions
    (except as may be permitted in the case of a particular series
    of debt securities);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the rate, or change the time for payment, of interest on
    any debt security;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waive a Default or an Event of Default in the payment of
    principal of or premium, if any, or interest on the debt
    securities (except a rescission of acceleration of the debt
    securities by the holders of at least a majority in aggregate
    principal amount of the debt securities and a waiver of the
    payment default that resulted from such acceleration);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    except as otherwise permitted under the indenture, release any
    security that may have been granted with respect to the debt
    securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make any debt security payable in a currency other than that
    stated in the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of any subordinated debt security, make any change
    in the subordination provisions that adversely affects the
    rights of any holder under those provisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make any change in the provisions of the indenture relating to
    waivers of past Defaults or the rights of holders of debt
    securities to receive payments of principal of or premium, if
    any, or interest on the debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waive a redemption payment with respect to any debt security
    (except as may be permitted in the case of a particular series
    of debt securities);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    except as otherwise permitted in the indenture, release any
    Subsidiary Guarantor from its obligations under its guarantee or
    the indenture or change any guarantee in any manner that would
    adversely affect the rights of holders;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make any change in the preceding amendment, supplement and
    waiver provisions (except to increase any percentage set forth
    therein).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may supplement or amend an indenture without the consent of
    any holders of the debt securities in certain circumstances,
    including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to establish the form or terms of any series of debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to cure any ambiguity, defect or inconsistency;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to provide for uncertificated notes in addition to or in place
    of certified notes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to provide for the assumption of our or a Subsidiary
    Guarantor&#146;s obligations to holders of debt securities in
    the case of a merger or consolidation or a disposition of all or
    substantially all of our or a Subsidiary Guarantor&#146;s assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of any subordinated debt security, to make any
    change in the subordination provisions that limits or terminates
    the benefits applicable to any holder of Senior Indebtedness;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to add or release Subsidiary Guarantors pursuant to the terms of
    the indenture;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to make any changes that would provide any additional rights or
    benefits to the holders of debt securities or that do not, taken
    as a whole, adversely affect the rights under the indenture of
    any holder of such debt securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to comply with requirements of the SEC in order to effect or
    maintain the qualification of the indenture under the Trust
    Indenture Act of 1939;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to evidence or provide for the acceptance of appointment under
    the indenture of a successor Trustee or separate Trustee;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    50
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to add any additional Events of Default;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to secure the debt securities or any guarantees.
</TD>
</TR>

</TABLE>
<A name='143'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Events of
    Default and Remedies</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Events
    of Default</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Event of Default,&#148; when used in an indenture, will
    mean any of the following with respect to the debt securities of
    any series:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay when due the principal of or any premium on any
    debt security of that series;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay, within 30&#160;days of the due date, interest on
    any debt security of that series;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay when due any sinking fund payment with respect to
    any debt securities of that series;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure on the part of us, or any Subsidiary Guarantor that is a
    &#147;significant subsidiary&#148; of us under SEC regulations,
    to comply with the covenant described above under
    &#147;Consolidation, Merger or Asset Sale&#148;;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure by us or any Subsidiary Guarantor that is a significant
    subsidiary to perform any other covenant in the indenture that
    continues for 60&#160;days after written notice is given to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain events of bankruptcy, insolvency or reorganization of us
    or any Subsidiary Guarantor that is a significant subsidiary of
    us; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    with respect to any Subsidiary Guarantor that is a significant
    subsidiary of us:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its guarantee ceases to be in full force and effect, except as
    otherwise provided in the indenture;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    its guarantee is declared null and void in a judicial
    proceeding;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Subsidiary Guarantor denies or disaffirms its obligations
    under the indenture or its guarantee;&#160;or
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other Event of Default provided under the terms of the debt
    securities of that series.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An Event of Default for a particular series of debt securities
    will not necessarily constitute an Event of Default for any
    other series of debt securities issued under an indenture. The
    Trustee may withhold notice to the holders of debt securities of
    any default (except in the payment of principal, premium, if
    any, or interest or in the making of any sinking fund payment
    with respect to the debt securities of such series) if it
    considers such withholding of notice to be in the interests of
    the holders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Exercise
    of Remedies</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an Event of Default for any series of debt securities occurs
    and is continuing, the Trustee or the holders of at least 25% in
    aggregate principal amount of the debt securities of the series
    may declare the entire principal of, and accrued interest on,
    all the debt securities of that series to be due and payable
    immediately. If an Event of Default occurs because of certain
    events in bankruptcy, insolvency or reorganization, the
    principal amount of, and accrued interest on, all the debt
    securities of that series will be automatically accelerated,
    without any action by the Trustee or any holder. A declaration
    of acceleration of maturity and its consequences may be
    rescinded by the holders of a majority in the aggregate
    principal amount of the debt securities of the affected series
    if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the rescission would not conflict with any judgment or decree
    already rendered;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all existing Events of Default have been cured or waived except
    nonpayment of principal or interest that has become due solely
    because of the acceleration.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee will be under no obligation, except as otherwise
    provided in the indenture, to exercise any of the rights or
    powers under the indenture at the request or direction of any of
    the holders unless such
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    51
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    holders have offered to the Trustee reasonable indemnity or
    security against any costs, liability or expense. No holder may
    pursue any remedy with respect to the indenture or the debt
    securities of any series, except to enforce the right to receive
    payment of principal, premium, if any, and interest when due on
    its debt securities, unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    such holder has previously given the Trustee notice that an
    Event of Default with respect to that series has occurred and is
    continuing;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    holders of at least 25% in principal amount of the outstanding
    debt securities of that series have requested that the Trustee
    pursue the remedy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    such holders have offered the Trustee reasonable indemnity or
    security against any cost, liability or expense;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Trustee has not complied with such request within
    60&#160;days after the receipt of the request and the offer of
    indemnity or security;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holders of a majority in principal amount of the outstanding
    debt securities of that series have not given the Trustee a
    direction that, in the opinion of the Trustee, is inconsistent
    with such request within such
    <FONT style="white-space: nowrap">60-day</FONT>
    period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The holders of a majority in principal amount of the outstanding
    debt securities of a series have the right, subject to certain
    restrictions, to direct the time, method and place of conducting
    any proceeding for any remedy available to the Trustee or of
    exercising any right or power conferred on the Trustee with
    respect to that series of debt securities. The Trustee, however,
    may refuse to follow any direction that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    conflicts with law;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Trustee determines is unduly prejudicial to the rights of
    any other holder;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    would involve the Trustee in personal liability.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Notice
    of an Event of Default</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Within 30&#160;days after the occurrence of any Default (meaning
    an event that is, or after the notice or passage of time or both
    would be, an Event of Default) or Event of Default, we are
    required to give an officers&#146; certificate to the Trustee
    specifying the Default or Event of Default and what action we
    are taking or propose to take to cure it. In addition, we are
    required to deliver to the Trustee, within 120&#160;days after
    the end of each fiscal year, an officers&#146; certificate
    indicating whether any Default or Event of Default has occurred
    during the previous year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a Default occurs and is continuing and is known to the
    Trustee, the Trustee must mail to each holder a notice of the
    Default within 90&#160;days after the Default occurs. Except in
    the case of a Default in the payment of principal, premium, if
    any, or interest on any debt securities, the Trustee may
    withhold such notice, but only if and so long as the board of
    directors, the executive committee or a committee of directors
    or responsible officers of the Trustee in good faith determines
    that withholding such notice is in the interests of the holders.
</DIV>
<A name='145'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Defeasance</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time we may terminate, with respect to debt securities of
    a particular series, all our obligations under such series of
    debt securities and the indenture, which we call a &#147;legal
    defeasance.&#148; If we decide to make a legal defeasance,
    however, it will not terminate certain specified obligations,
    including, among others, our obligations relating to the
    defeasance trust, to maintain a registrar for the debt
    securities and to register the transfer and exchange of debt
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we exercise our legal defeasance option, any guarantee will
    terminate with respect to that series of debt securities.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time we may also effect a &#147;covenant
    defeasance,&#148; which means we have elected to terminate our
    obligations under certain provisions and restrictive covenants
    applicable to a series of debt securities, including any
    covenant that may be added specifically for such series and is
    described in a prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may exercise our legal defeasance option notwithstanding our
    prior exercise of our covenant defeasance option. If we exercise
    our legal defeasance option, payment of the affected series of
    debt securities may not be accelerated because of an Event of
    Default with respect to that series. If we exercise our covenant
    defeasance option, payment of the defeased series of debt
    securities may not be accelerated because of an Event of Default
    specified in the fourth, fifth, sixth (with respect only to a
    Subsidiary Guarantor, if any) or seventh bullet points under
    &#147;&#151;&#160;Events of Default and Remedies&#160;&#151;
    Events of Default&#148; above or an Event of Default that is
    added specifically for such series and described in a prospectus
    supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To exercise either defeasance option, we must:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    irrevocably deposit with the Trustee as trust funds cash in
    U.S.&#160;Dollars, certain U.S.&#160;government obligations or a
    combination thereof, for the payment of principal, premium, if
    any, and interest on the series of debt securities to redemption
    or stated maturity, as applicable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    comply with certain other conditions, including that no Default
    has occurred and is continuing after the deposit in trust, and
    any additional provisions set forth in the prospectus
    supplement;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    deliver to the Trustee an opinion of counsel to the effect that
    holders of the series of debt securities will not recognize
    income, gain or loss for U.S.&#160;federal income tax purposes
    as a result of such defeasance and will be subject to
    U.S.&#160;federal income tax on the same amount and in the same
    manner and at the same times as would have been the case if such
    deposit and defeasance had not occurred. In the case of legal
    defeasance only, such opinion of counsel must be based on a
    ruling of the U.S.&#160;Internal Revenue Service or a change in
    applicable U.S.&#160;federal income tax law.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we may discharge all obligations of the issuers and
    Subsidiary Guarantors under the indenture with respect to the
    debt securities of a particular series, other than our
    obligation to register the transfer of and exchange debt
    securities of that series, provided that we:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="4%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (a)&#160;
</TD>
    <TD align="left">
    either:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="5%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (1)&#160;
</TD>
    <TD align="left">
    deliver all outstanding debt securities of that series to the
    Trustee for cancellation; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (2)&#160;
</TD>
    <TD align="left">
    all debt securities of that series not so delivered for
    cancellation have either become due and payable or will become
    due and payable at their stated maturity within one year or are
    to be called for redemption within one year, and, in any case,
    we have irrevocably deposited with the Trustee in trust an
    amount of cash, certain U.S.&#160;government obligations or a
    combination thereof, in an amount sufficient to pay the entire
    indebtedness of the debt securities of that series, including
    for principal, premium, if any, an accrued interest to the date
    of such deposit (in the case of debt securities that have become
    due and payable) or to the stated maturity or applicable
    redemption date, as applicable (in the case of debt securities
    that have not become due and payable);
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="4%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (b)&#160;
</TD>
    <TD align="left">
    have paid or ceased to be paid all other sums payable under the
    indenture; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    (c)&#160;
</TD>
    <TD align="left">
    have delivered an officers&#146; certificate and an opinion of
    counsel to the Trustee stating that all conditions precedent to
    such satisfaction and discharge have been satisfied.
</TD>
</TR>

</TABLE>
<A name='146'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No Limit
    on Amount of Debt Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The indenture will not limit the amount of debt securities that
    we may issue, unless we indicate otherwise in a prospectus
    supplement. The indenture will allow us to issue debt securities
    of any series up to the aggregate principal amount that we
    authorize.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='147'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Registration
    of Notes</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will issue debt securities of a series only in registered
    form, without coupons, unless otherwise indicated in the
    prospectus supplement.
</DIV>
<A name='148'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Minimum
    Denominations</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the prospectus supplement states otherwise, the debt
    securities will be issued only in principal amounts of $1,000
    each or integral multiples of $1,000.
</DIV>
<A name='149'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No
    Personal Liability</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of the past, present or future partners, incorporators,
    managers, members, directors, officers, employees, unitholders
    or stockholders of us, the general partner of Teekay LNG
    Partners L.P. or any Subsidiary Guarantor will have any
    liability for the obligations of us or any Subsidiary Guarantors
    under the indenture or the debt securities or for any claim
    based on such obligations or their creation. Each holder of debt
    securities by accepting a debt security waives and releases all
    such liability. The waiver and release are part of the
    consideration for the issuance of the debt securities. The
    waiver may not be effective under U.S.&#160;federal securities
    laws, however, and it is the view of the SEC that such a waiver
    is against public policy.
</DIV>
<A name='150'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Payment
    and Transfer</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee will initially act as paying agent and registrar
    under each indenture. We may change the paying agent or
    registrar without prior notice to the holders of debt
    securities, and we or any of our subsidiaries may act as paying
    agent or registrar.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a holder of debt securities has given wire transfer
    instructions to us, we will make all payments on the debt
    securities in accordance with those instructions. All other
    payments on the debt securities will be made at the corporate
    trust office of the Trustee located in New York City, unless we
    elect to make interest payments by check mailed to the holders
    at their addresses set forth in the debt security register.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee and any paying agent will repay to us upon request
    any funds held by them for payments on the debt securities that
    remain unclaimed for two years after the date upon which that
    payment has become due. After payment to us, holders entitled to
    the money must look to us for payment as general creditors.
</DIV>
<A name='151'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange,
    Registration and Transfer</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Debt securities of any series will be exchangeable for other
    debt securities of the same series, the same total principal
    amount and the same terms but in different authorized
    denominations in accordance with the indenture. Holders may
    present debt securities for exchange or registration of transfer
    at the office of the registrar. The registrar will effect the
    transfer or exchange when it is satisfied with the documents of
    title and identity of the person making the request. We will not
    charge a service charge for any registration of transfer or
    exchange of the debt securities. We may, however, require the
    payment of any tax or other governmental charge payable for that
    registration.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will not be required:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to issue, register the transfer of, or exchange debt securities
    of a series either during a period beginning 15 business days
    prior to the selection of debt securities of that series for
    redemption or repurchase and ending on the close of business on
    the day of mailing of the relevant notice of redemption or
    repurchase, or between a record date and the next succeeding
    interest payment date;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to register the transfer of or exchange any debt security called
    for redemption or repurchase, except the unredeemed portion of
    any debt security we are redeeming or repurchasing in part.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    54
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='152'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Provisions
    Relating Only to the Senior Debt Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The senior debt securities will rank equally in right of payment
    with all of our other senior and unsubordinated debt. The senior
    debt securities will be effectively subordinated, however, to
    all of our secured debt to the extent of the value of the
    collateral for that debt. We will disclose the amount of our
    secured debt in the prospectus supplement.
</DIV>
<A name='153'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Provisions
    Relating Only to the Subordinated Debt Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Subordinated
    Debt Securities Subordinated to Senior
    Indebtedness</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The subordinated debt securities will rank junior in right of
    payment to all of the Senior Indebtedness of us and any
    Subsidiary Guarantors. &#147;Senior Indebtedness&#148; will be
    defined in a supplemental indenture for any issuance of a series
    of subordinated debt securities, and the definition will be set
    forth in the prospectus supplement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Payment
    Blockages</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The subordinated indenture will provide that, until the Senior
    Indebtedness is paid in full, no payment of principal, interest
    and any premium on the subordinated debt securities may be made
    in the event:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we or our assets (or, if applicable, any Subsidiary Guarantor or
    its assets) are involved in any voluntary or involuntary
    liquidation or bankruptcy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we fail (or, if applicable, any Subsidiary Guarantor fails) to
    pay the principal, interest, any premium or any other amounts on
    any Senior Indebtedness within any applicable grace period or if
    the maturity of such Senior Indebtedness is accelerated
    following any other default, subject to certain limited
    exceptions set forth in the subordinated indenture;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other default on any Senior Indebtedness occurs that permits
    immediate acceleration of its maturity, in which case a payment
    blockage on the subordinated debt securities will be imposed for
    a maximum of 179&#160;days at any one time.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the subordination provisions described above, in
    the event of our insolvency, the holders of Senior Indebtedness,
    as well as certain of our general creditors, may recover more,
    ratably, than the holders of the subordinated debt securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">No
    Limitation on Amount of Senior Debt</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The subordinated indenture will not limit the amount of Senior
    Indebtedness that Teekay LNG Partners L.P. may incur, unless
    otherwise indicated in the prospectus supplement.
</DIV>
<A name='154'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Book
    Entry, Delivery and Form</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The debt securities of a particular series may be issued in
    whole or in part in the form of one or more global certificates
    that will be registered in the name of The Depository Trust
    Company, New York, New York (or <I>DTC</I>) or its nominee. This
    means that we will not issue certificates to each holder.
    Instead, one or more global debt securities will be issued to
    DTC, who will keep a computerized record of its participants
    (for example, your broker) whose clients have purchased the debt
    securities. The participant will then keep a record of its
    clients who purchased the debt securities. Unless it is
    exchanged in whole or in part for a certificated debt security,
    a global debt security may not be transferred, except that DTC,
    its nominees and their successors may transfer a global debt
    security as a whole to one another.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beneficial interests in global debt securities will be shown on,
    and transfers of global debt securities will only be made
    through, records maintained by DTC and its participants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC has made available the following information: DTC is a
    limited-purpose trust company organized under the New York
    Banking Law, a &#147;banking organization&#148; within the
    meaning of the New York Banking Law, a member of the United
    States Federal Reserve System, a &#147;clearing
    corporation&#148; within the meaning
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    55
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of the New York Uniform Commercial Code and a &#147;clearing
    agency&#148; registered under the provisions of Section&#160;17A
    of the U.S.&#160;Securities Exchange Act of 1934. DTC is owned
    by a number of its participants and by the New York Stock
    Exchange, Inc. and the National Association of Securities
    Dealers, Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC holds securities that its participants (or <I>Direct
    Participants</I>) deposit with DTC. DTC also records the
    settlement among Direct Participants of securities transactions,
    such as transfers and pledges, in deposited securities through
    computerized records for Direct Participants&#146; accounts.
    This eliminates the need to exchange certificates. Direct
    Participants include securities brokers and dealers, banks,
    trust companies, clearing corporations and certain other
    organizations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DTC&#146;s book-entry system is also used by other organizations
    such as securities brokers and dealers, banks and trust
    companies that work through a Direct Participant. The rules that
    apply to DTC and its participants are on file with the SEC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will wire all payments on the global debt securities to DTC
    or its nominee. We and the Trustee will treat DTC or its nominee
    as the owner of the global debt securities for all purposes.
    Accordingly, we, the Trustee and any paying agent will have no
    direct responsibility or liability to pay amounts due on the
    global debt securities to owners of beneficial interests in the
    global debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is DTC&#146;s current practice, upon receipt of any payment
    on global debt securities, to credit Direct Participants&#146;
    accounts on the payment date according to their respective
    holdings of beneficial interests in the global debt securities
    as shown on DTC&#146;s records. In addition, it is DTC&#146;s
    current practice to assign any consenting or voting rights to
    Direct Participants whose accounts are credited with debt
    securities on a record date, by using an omnibus proxy. Payments
    by participants to owners of beneficial interests in the global
    debt securities, and voting by participants, will be governed by
    the customary practices between the participants and owners of
    beneficial interests, as is the case with debt securities held
    for the account of customers registered in &#147;street
    name.&#148; However, payments will be the responsibility of the
    participants and not of DTC, the Trustee or us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Debt securities represented by a global debt security will be
    exchangeable for certificated debt securities with the same
    terms in authorized denominations only if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    DTC notifies us that it is unwilling or unable to continue as
    depositary or if DTC ceases to be a clearing agency registered
    under applicable law and in either event a successor depositary
    is not appointed by us within 90&#160;days;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we determine not to require all of the debt securities of a
    series to be represented by a global debt security.
</TD>
</TR>

</TABLE>
<A name='155'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Governing
    Law</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each indenture and all of the debt securities will be governed
    by the laws of the State of New York.
</DIV>
<A name='156'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Trustee</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will enter into the indentures with a trustee that is
    qualified to act under the U.S.&#160;Trust Indenture Act of 1939
    and with any other trustees chosen by us and appointed in a
    supplemental indenture for a particular series of debt
    securities. We use the term &#147;Trustee&#148; to refer to the
    trustee appointed with respect to any such series of debt
    securities. Unless we otherwise specify in the applicable
    prospectus supplement, the initial trustee for each series of
    debt securities will be The Bank of New York. We may maintain
    banking and other commercial relationships with the Trustee and
    its affiliates in the ordinary course of business, and the
    Trustee may own our debt securities. If at any time two or more
    trustees are acting under an indenture, each with respect to
    only certain series, the term &#147;debt securities&#148; means
    the series of debt securities for which each respective trustee
    is acting. If there is more than one trustee under the
    indenture, the powers and trust obligations of each trustee will
    apply only to the debt securities for which it is trustee. If
    two or more trustees are acting under the indenture, then the
    debt securities for which each trustee is acting would be
    treated as if issued under separate indentures.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    56
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Resignation
    or Removal of Trustee</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Trustee has or acquires a conflicting interest within the
    meaning of the Trust Indenture Act of 1939, the Trustee shall
    either eliminate its conflicting interest or resign to the
    extent and in the manner provided in, and subject to the
    provisions of, the Trust Indenture Act and the applicable
    indenture. Any resignation due to a conflicting interest or
    otherwise will require the appointment of a successor Trustee
    under the applicable indenture in accordance with the terms and
    conditions of such indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee may resign or be removed by us with respect to one
    or more series of debt securities and a successor Trustee may be
    appointed to act with respect to any such series. The holders of
    a majority in aggregate principal amount of the debt securities
    outstanding of any series may remove the Trustee with respect to
    the debt securities of such series.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Annual
    Trustee Report to Holders of Debt Securities</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee is required to submit an annual report to the
    holders of the debt securities regarding, among other things,
    the Trustee&#146;s eligibility to serve as such, the priority of
    the Trustee&#146;s claims regarding certain advances made by it,
    and any action taken by the Trustee materially affecting the
    debt securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Certificates
    and Opinions to be Furnished to Trustee</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each indenture will provide that, in addition to other
    certificates or opinions that may be specifically required by
    other provisions of the indenture, every application by us for
    action by the Trustee will be accompanied by a certificate of
    certain of our officers and an opinion of counsel (which may be
    our counsel) stating that, in the opinion of the signers, all
    conditions precedent to such action have been complied with by
    us.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    57
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='157'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    U.S.&#160;FEDERAL INCOME TAX CONSEQUENCES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This section is a discussion of the material U.S.&#160;federal
    income tax considerations that may be relevant to prospective
    common unitholders who are individual citizens or residents of
    the United States and, unless otherwise noted in the following
    discussion, is the opinion of Perkins Coie LLP, counsel to the
    general partner and us, insofar as it relates to matters of
    U.S.&#160;federal income tax law and legal conclusions with
    respect to those matters. This section is based upon provisions
    of the U.S.&#160;Internal Revenue Code of 1986 (or the
    <I>Internal Revenue Code</I>) as in effect on the date of this
    prospectus, existing final, temporary and proposed regulations
    thereunder (or <I>Treasury Regulations</I>) and current
    administrative rulings and court decisions, all of which are
    subject to change. Changes in these authorities may cause the
    tax consequences to vary substantially from the consequences
    described below. Unless the context otherwise requires,
    references in this section to &#147;we&#148;, &#147;our&#148; or
    &#147;us&#148; are references to Teekay LNG Partners L.P. and
    its direct or indirect wholly owned subsidiaries that have
    properly elected to be disregarded as entities separate from
    Teekay LNG Partners L.P. for U.S.&#160;federal tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion does not comment on all
    U.S.&#160;federal income tax matters affecting us or the
    unitholders. Moreover, the discussion focuses on unitholders who
    are individual citizens or residents of the United States and
    hold their units as capital assets and has only limited
    application to corporations, estates, trusts,
    <FONT style="white-space: nowrap">non-U.S.&#160;persons</FONT>
    or other unitholders subject to specialized tax treatment, such
    as tax-exempt entities (including IRAs), regulated investment
    companies (mutual funds) and real estate investment trusts (or
    <I>REITs</I>). Accordingly, we urge each prospective unitholder
    to consult, and depend on, his own tax advisor in analyzing the
    U.S.&#160;federal, state, local and
    <FONT style="white-space: nowrap">non-U.S.&#160;tax</FONT>
    consequences particular to him of the ownership or disposition
    of common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All statements as to matters of law and legal conclusions, but
    not as to factual matters, contained in this section, unless
    otherwise noted, are the opinion of Perkins Coie LLP and are
    based on the accuracy of the representations made by us to
    Perkins Coie LLP for purposes of their opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as described below under &#147;&#151;&#160;Classification
    as a Partnership,&#148; no ruling has been or will be requested
    from the IRS regarding any matter affecting us or prospective
    unitholders. Instead, we will rely on opinions of Perkins Coie
    LLP. Unlike a ruling, an opinion of counsel represents only that
    counsel&#146;s best legal judgment and does not bind the IRS or
    the courts. Accordingly, the opinions of Perkins Coie LLP may
    not be sustained by a court if contested by the IRS. Any contest
    of this nature with the IRS may materially and adversely impact
    the market for the common units and the prices at which common
    units trade. In addition, the costs of any contest with the IRS,
    principally legal, accounting and related fees, will result in a
    reduction in cash available for distribution to our unitholders
    and our general partner and thus will be borne indirectly by our
    unitholders and our general partner. Furthermore, our tax
    treatment, or the tax treatment of an investment in us, may be
    significantly modified by future legislative or administrative
    changes or court decisions. Any modifications may or may not be
    retroactively applied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the reasons described below, Perkins Coie LLP has not
    rendered an opinion with respect to the following specific
    U.S.&#160;federal income tax issues: (1)&#160;the treatment of a
    unitholder whose common units are loaned to a short seller to
    cover a short sale of common units (please read
    &#147;&#151;&#160;Consequences of Unit Ownership&#160;&#151;
    Treatment of Short Sales&#148;); (2)&#160;whether our method for
    depreciating Section&#160;743 adjustments is sustainable in
    certain cases (please read &#147;&#151;&#160;Consequences of
    Unit Ownership&#160;&#151; Section&#160;754 Election&#148;); and
    (3)&#160;whether our monthly convention for allocating taxable
    income and losses is permitted by existing Treasury Regulations
    (please read &#147;&#151;&#160;Disposition of Common
    Units&#160;&#151; Allocations Between Transferors and
    Transferees&#148;). Perkins Coie LLP has not rendered an opinion
    on any state, local or
    <FONT style="white-space: nowrap">non-U.S.&#160;tax</FONT>
    matters.
</DIV>
<A name='158'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Classification
    as a Partnership</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of U.S.&#160;federal income taxation, a partnership
    is not a taxable entity, and although it may be subject to
    withholding taxes on behalf of its partners under certain
    circumstances, a partnership itself incurs no U.S.&#160;federal
    income tax liability. Instead, each partner of a partnership is
    required to take into account his share of items of income,
    gain, loss, deduction and credit of the partnership in computing
    his
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    U.S.&#160;federal income tax liability, regardless of whether
    cash distributions are made to him by the partnership.
    Distributions by a partnership to a partner generally are not
    taxable unless the amount of cash distributed exceeds the
    partner&#146;s adjusted tax basis in his partnership interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;7704 of the Internal Revenue Code provides that
    publicly traded partnerships, as a general rule, will be treated
    as corporations for U.S.&#160;federal income tax purposes.
    However, an exception, referred to as the &#147;Qualifying
    Income Exception,&#148; exists with respect to publicly traded
    partnerships whose &#147;qualifying income&#148; represents 90%
    or more of their gross income for every taxable year. Qualifying
    income includes income and gains derived from the transportation
    and storage of crude oil, natural gas and products thereof,
    including liquefied natural gas. Other types of qualifying
    income include interest (other than from a financial business),
    dividends, gains from the sale of real property and gains from
    the sale or other disposition of capital assets held for the
    production of qualifying income, including stock. We have
    received a ruling from the IRS that we requested in connection
    with our initial public offering that the income we derive from
    transporting LNG and crude oil pursuant to time charters
    existing at the time of our initial public offering is
    qualifying income within the meaning of Section&#160;7704. A
    ruling from the IRS, while generally binding on the IRS, may
    under certain circumstances be revoked or modified by the IRS
    retroactively. As to income that is not covered by the IRS
    ruling, we will rely upon the opinion of Perkins Coie LLP
    whether the income is qualifying income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that less than 5% of our current income is not
    qualifying income; however, this estimate could change from time
    to time. A number of factors could cause the percentage of our
    income that is qualifying income to vary. For example, we have
    not received an IRS ruling or an opinion of counsel that any
    income or gain we recognize from foreign currency transactions
    or from interest rate swaps is qualifying income. Under some
    circumstances, such as a significant increase in interest rates,
    the percentage of such income or gain in relation to our total
    gross income could be substantial. However, we do not expect
    income or gains from foreign currency transactions or interest
    rate swaps to constitute a significant percentage of our current
    or future gross income for U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Perkins Coie LLP is of the opinion that, based upon the Internal
    Revenue Code, Treasury Regulations thereunder, published revenue
    rulings and court decisions, the IRS ruling and representations
    described below, we will be classified as a partnership for
    U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In rendering its opinion, Perkins Coie LLP has relied on factual
    representations made by us and the general partner. The
    representations made by us and our general partner upon which
    Perkins Coie LLP has relied are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    We have not elected and will not elect to be treated as a
    corporation, and each of our direct or indirect wholly-owned
    subsidiaries has properly elected to be disregarded as an entity
    separate from us, for U.S.&#160;federal income tax
    purposes;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    For each taxable year, at least 90% of our gross income will be
    either (a)&#160;income to which the IRS ruling described above
    applies or (b)&#160;of a type that Perkins Coie LLP has opined
    or will opine is &#147;qualifying income&#148; within the
    meaning of Section&#160;7704(d) of the Internal Revenue Code.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The discussion that follows is based on the assumption that we
    will be treated as a partnership for U.S.&#160;federal income
    tax purposes. Please read &#147;&#151;&#160;Possible
    Classification as a Corporation&#148; below for a discussion of
    the consequences of our failing to be treated as a partnership
    for such purposes.
</DIV>
<A name='159'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Status as
    a Partner</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The treatment of unitholders described in this section applies
    only to unitholders treated as partners in us for
    U.S.&#160;federal income tax purposes. Unitholders who have been
    properly admitted as limited partners of Teekay LNG Partners
    L.P. will be treated as partners in us for U.S.&#160;federal
    income tax purposes. Also:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    assignees of common units who have executed and delivered
    transfer applications, and are awaiting admission as limited
    partners;&#160;and
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    59
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unitholders whose common units are held in street name or by a
    nominee and who have the right to direct the nominee in the
    exercise of all substantive rights attendant to the ownership of
    their common units will be treated as partners in us for
    U.S.&#160;federal income tax purposes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because no direct authority addresses the status of assignees of
    common units who are entitled to execute and deliver transfer
    applications and thereby become entitled to direct the exercise
    of attendant rights, but who fail to execute and deliver
    transfer applications, Perkins Coie LLP&#146;s opinion does not
    extend to these persons. Furthermore, a purchaser or other
    transferee of common units who does not execute and deliver a
    transfer application may not receive some U.S.&#160;federal
    income tax information or reports furnished to record holders of
    common units, unless the common units are held in a nominee or
    street name account and the nominee or broker has executed and
    delivered a transfer application for those common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under certain circumstances, a beneficial owner of common units
    whose units have been loaned to another may lose his status as a
    partner with respect to those units for U.S.&#160;federal income
    tax purposes. Please read &#147;&#151;&#160;Consequences of Unit
    Ownership&#160;&#151; Treatment of Short Sales&#148; below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a person who is not a partner in a partnership for
    U.S.&#160;federal income tax purposes is not required or
    permitted to report any share of the partnership&#146;s income,
    gain, deductions or losses for such purposes, and any cash
    distributions received by such a person from the partnership
    therefore may be fully taxable as ordinary income. Unitholders
    not described here are urged to consult their own tax advisors
    with respect to their status as partners in us for
    U.S.&#160;federal income tax purposes.
</DIV>
<A name='160'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consequences
    of Unit Ownership</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Flow-through of Taxable Income.</I></B>&#160;&#160;Each
    unitholder is required to include in computing his taxable
    income his allocable share of our income, gains, losses and
    deductions for our taxable year ending with or within his
    taxable year, without regard to whether we make corresponding
    cash distributions to him. Our taxable year ends on
    December&#160;31. Consequently, we may allocate income to a
    unitholder as of December&#160;31 of a given year, and the
    unitholder will be required to report this income on his tax
    return for his tax year that ends on or includes such date, even
    if he has not received a cash distribution from us as of that
    date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Treatment of
    Distributions.</I></B>&#160;&#160;Distributions by us to a
    unitholder generally will not be taxable to the unitholder for
    U.S.&#160;federal income tax purposes to the extent of his tax
    basis in his common units immediately before the distribution.
    Our cash distributions in excess of a unitholder&#146;s tax
    basis generally will be considered to be gain from the sale or
    exchange of the common units, taxable in accordance with the
    rules described under &#147;&#151;&#160;Disposition of Common
    Units&#148; below. Any reduction in a unitholder&#146;s share of
    our liabilities for which no partner, including the general
    partner, bears the economic risk of loss, known as
    &#147;nonrecourse liabilities,&#148; will be treated as a
    distribution of cash to that unitholder. To the extent our
    distributions cause a unitholder&#146;s &#147;at risk&#148;
    amount to be less than zero at the end of any taxable year, he
    must recapture any losses deducted in previous years. Please
    read &#147;&#151;&#160;Limitations on Deductibility of
    Losses.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A decrease in a unitholder&#146;s percentage interest in us
    because of our issuance of additional common units will decrease
    his share of our nonrecourse liabilities, and thus will result
    in a corresponding deemed distribution of cash. A non-pro rata
    distribution of money or property may result in ordinary income
    to a unitholder, regardless of his tax basis in his common
    units, if the distribution reduces the unitholder&#146;s share
    of our &#147;unrealized receivables,&#148; including
    depreciation recapture, and/or substantially appreciated
    &#147;inventory items,&#148; both as defined in the Internal
    Revenue Code (or, collectively, <I>Section&#160;751 Assets</I>).
    To that extent, he will be treated as having been distributed
    his proportionate share of the Section&#160;751 Assets and
    having exchanged those assets with us in return for the non-pro
    rata portion of the actual distribution made to him. This latter
    deemed exchange will generally result in the unitholder&#146;s
    realization of ordinary income, which will equal the excess of
    (1)&#160;the non-pro rata portion of that distribution over
    (2)&#160;the unitholder&#146;s tax basis for the share of
    Section&#160;751 Assets deemed relinquished in the exchange.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    60
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Basis of Common Units.</I></B>&#160;&#160;A
    unitholder&#146;s initial U.S.&#160;federal income tax basis for
    his common units will be the amount he paid for the common units
    plus his share of our nonrecourse liabilities. That basis will
    be increased by his share of our income and by any increases in
    his share of our nonrecourse liabilities. That basis will be
    decreased, but not below zero, by distributions from us, by the
    unitholder&#146;s share of our losses, by any decreases in his
    share of our nonrecourse liabilities and by his share of our
    expenditures that are not deductible in computing taxable income
    and are not required to be capitalized. A unitholder will have
    no share of our debt that is recourse to the general partner,
    but will have a share, generally based on his share of profits,
    of our nonrecourse liabilities. Please read
    &#147;&#151;&#160;Disposition of Common Units&#160;&#151;
    Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Limitations on Deductibility of
    Losses.</I></B>&#160;&#160;The deduction by a unitholder of his
    share of our losses will be limited to the tax basis in his
    units and, in the case of an individual unitholder or a
    corporate unitholder, if more than 50% of the value of the
    corporate unitholder&#146;s stock is owned directly or
    indirectly by five or fewer individuals or some tax-exempt
    organizations, to the amount for which the unitholder is
    considered to be &#147;at risk&#148; with respect to our
    activities, if that is less than his tax basis. A unitholder
    must recapture losses deducted in previous years to the extent
    that distributions cause his at risk amount to be less than zero
    at the end of any taxable year. Losses disallowed to a
    unitholder or recaptured as a result of these limitations will
    carry forward and will be allowable to the extent that his tax
    basis or at risk amount, whichever is the limiting factor, is
    subsequently increased. Upon the taxable disposition of a unit,
    any gain recognized by a unitholder can be offset by losses that
    were previously suspended by the at risk limitation but may not
    be offset by losses suspended by the basis limitation. Any
    excess suspended loss above that gain is no longer utilizable.
    In general, a unitholder will be at risk to the extent of the
    tax basis of his units, excluding any portion of that basis
    attributable to his share of our nonrecourse liabilities,
    reduced by any amount of money he borrows to acquire or hold his
    units, if the lender of those borrowed funds owns an interest in
    us, is related to the unitholder or can look only to the units
    for repayment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The passive loss limitations generally provide that individuals,
    estates, trusts and some closely-held corporations and personal
    service corporations can deduct losses from a passive activity
    only to the extent of the taxpayer&#146;s income from the same
    passive activity. Passive activities generally are corporate or
    partnership activities in which the taxpayer does not materially
    participate. The passive loss limitations are applied separately
    with respect to each publicly traded partnership. Consequently,
    any passive losses we generate only will be available to offset
    our passive income generated in the future and will not be
    available to offset income from other passive activities or
    investments, including our investments or investments in other
    publicly traded partnerships, or salary or active business
    income. Passive losses that are not deductible because they
    exceed a unitholder&#146;s share of income we generate may be
    deducted in full when he disposes of his entire investment in us
    in a fully taxable transaction with an unrelated party. The
    passive activity loss rules are applied after other applicable
    limitations on deductions, including the at risk rules and the
    basis limitation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dual consolidated loss restrictions also may apply to limit the
    deductibility by a corporate unitholder of losses we incur.
    Corporate unitholders are urged to consult their own tax
    advisors regarding the applicability and effect to them of dual
    consolidated loss restrictions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Limitations on Interest Deductions.</I></B>&#160;&#160;The
    deductibility of a non-corporate taxpayer&#146;s
    &#147;investment interest expense&#148; generally is limited to
    the amount of that taxpayer&#146;s &#147;net investment
    income.&#148; Investment interest expense includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest on indebtedness properly allocable to property held for
    investment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our interest expense attributed to portfolio income;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the portion of interest expense incurred to purchase or carry an
    interest in a passive activity to the extent attributable to
    portfolio income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The computation of a unitholder&#146;s investment interest
    expense will take into account interest on any margin account
    borrowing or other loan incurred to purchase or carry a unit.
    Net investment income includes gross income from property held
    for investment and amounts treated as portfolio income under the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    61
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    passive loss rules, less deductible expenses, other than
    interest, directly connected with the production of investment
    income, but generally does not include gains attributable to the
    disposition of property held for investment. The IRS has
    indicated that net passive income earned by a publicly traded
    partnership will be treated as investment income to its
    unitholders. In addition, the unitholder&#146;s share of our
    portfolio income will be treated as investment income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Entity-Level&#160;Collections.</I></B>&#160;&#160;If we
    are required or elect under applicable law to pay any
    U.S.&#160;federal, state or local or foreign income or
    withholding taxes on behalf of any present or former unitholder
    or the general partner, we are authorized to pay those taxes
    from our funds. That payment, if made, will be treated as a
    distribution of cash to the partner on whose behalf the payment
    was made. If the payment is made on behalf of a person whose
    identity cannot be determined, we are authorized to treat the
    payment as a distribution to all current unitholders. We are
    authorized to amend the partnership agreement in the manner
    necessary to maintain uniformity of intrinsic tax
    characteristics of units and to adjust later distributions, so
    that after giving effect to these distributions, the priority
    and characterization of distributions otherwise applicable under
    the partnership agreement are maintained as nearly as is
    practicable. Payments by us as described above could give rise
    to an overpayment of tax on behalf of an individual partner, in
    which event the partner would be required to file a claim in
    order to obtain a credit or refund of tax paid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Allocation of Income, Gain, Loss, Deduction and
    Credit.</I></B>&#160;&#160;In general, if we have a net profit,
    our items of income, gain, loss, deduction and credit will be
    allocated among the general partner and the unitholders in
    accordance with their percentage interests in us. At any time
    that distributions are made to the common units in excess of
    distributions to the subordinated units, or incentive
    distributions are made to the general partner, gross income will
    be allocated to the recipients to the extent of these
    distributions. If we have a net loss for the entire year, that
    loss generally will be allocated first to the general partner
    and the unitholders in accordance with their percentage
    interests in us to the extent of their positive capital accounts
    and, second, to the general partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specified items of our income, gain, loss and deduction will be
    allocated to account for any difference between the tax basis
    and fair market value of any property held by the partnership
    immediately prior to an offering of common units, referred to in
    this discussion as &#147;Adjusted Property.&#148; The effect of
    these allocations to a unitholder purchasing common units in an
    offering will be essentially the same as if the tax basis of our
    assets were equal to their fair market value at the time of the
    offering. In addition, items of recapture income will be
    allocated to the extent possible to the partner who was
    allocated the deduction giving rise to the treatment of that
    gain as recapture income in order to minimize the recognition of
    ordinary income by some unitholders. Finally, although we do not
    expect that our operations will result in the creation of
    negative capital accounts, if negative capital accounts
    nevertheless result, items of our income and gain will be
    allocated in an amount and manner to eliminate the negative
    balance as quickly as possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An allocation of items of our income, gain, loss, deduction or
    credit, other than an allocation required by the Internal
    Revenue Code to eliminate the difference between a
    partner&#146;s &#147;book&#148; capital account, which is
    credited with the fair market value of Adjusted Property, and
    &#147;tax&#148; capital account, which is credited with the tax
    basis of Adjusted Property, referred to in this discussion as
    the &#147;Book-Tax Disparity,&#148; will generally be given
    effect for U.S.&#160;federal income tax purposes in determining
    a partner&#146;s share of an item of income, gain, loss,
    deduction or credit only if the allocation has substantial
    economic effect. In any other case, a partner&#146;s share of an
    item will be determined on the basis of his interest in us,
    which will be determined by taking into account all the facts
    and circumstances, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    his relative contributions to us;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interests of all the partners in profits and losses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest of all the partners in cash flow;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the rights of all the partners to distributions of capital upon
    liquidation.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    62
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Perkins Coie LLP is of the opinion that, with the exception of
    the issues described in &#147;&#151;&#160;Consequences of Unit
    Ownership&#160;&#151; Section&#160;754 Election&#148; and
    &#147;&#151;&#160;Disposition of Common Units&#160;&#151;
    Allocations Between Transferors and Transferees,&#148;
    allocations under our partnership agreement will be given effect
    for U.S.&#160;federal income tax purposes in determining a
    partner&#146;s share of an item of income, gain, loss, deduction
    or credit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Treatment of Short Sales.</I></B>&#160;&#160;A unitholder
    whose units are loaned to a &#147;short seller&#148; who sells
    such units may be considered to have disposed of those units. If
    so, he would no longer be a partner with respect to those units
    until the termination of the loan and may recognize gain or loss
    from the disposition. As a result:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any of our income, gain, loss, deduction or credit with respect
    to the units may not be reportable by the unitholder who loaned
    them;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any cash distributions received by such unitholder with respect
    to those units may be fully taxable as ordinary income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Perkins Coie LLP has not rendered an opinion regarding the
    treatment of a unitholder whose common units are loaned to a
    short seller. Therefore, unitholders desiring to assure their
    status as partners and avoid the risk of gain recognition from a
    loan to a short seller are urged to ensure that any applicable
    brokerage account agreements prohibit their brokers from
    borrowing their units. The IRS has announced that it is actively
    studying issues relating to the tax treatment of short sales of
    partnership interests. Please also read
    &#147;&#151;&#160;Disposition of Common Units&#160;&#151;
    Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Alternative Minimum Tax.</I></B>&#160;&#160;Each
    unitholder will be required to take into account his
    distributive share of any items of our income, gain, loss,
    deduction or credit for purposes of the alternative minimum tax.
    The current minimum tax rate for noncorporate taxpayers is 26%
    on the first $175,000 of alternative minimum taxable income in
    excess of the exemption amount and 28% on any additional
    alternative minimum taxable income. Prospective unitholders are
    urged to consult with their tax advisors as to the impact of an
    investment in units on their liability for the alternative
    minimum tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Tax Rates.</I></B>&#160;&#160;The highest statutory rate
    of U.S.&#160;federal income tax for individuals currently is
    35%, and the highest statutory rate of U.S.&#160;federal income
    tax imposed on net capital gains of an individual currently is
    15% if the asset disposed of was held for more than one year at
    the time of disposition.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Section&#160;754 Election.</I></B>&#160;&#160;We intend to
    make an election under Section&#160;754 of the Internal Revenue
    Code to adjust a common unit purchaser&#146;s U.S.&#160;federal
    income tax basis in our assets (or <I>inside basis</I>) to
    reflect the purchaser&#146;s purchase price (or a
    <I>Section&#160;743(b) adjustment</I>). The Section&#160;743(b)
    adjustment belongs to the purchaser and not to other unitholders
    and does not apply to unitholders who acquire their common units
    directly from us. For purposes of this discussion, a
    unitholder&#146;s inside basis in our assets will be considered
    to have two components: (1)&#160;his share of our tax basis in
    our assets (or <I>common basis</I>) and (2)&#160;his
    Section&#160;743(b) adjustment to that basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, a purchaser&#146;s common basis is depreciated or
    amortized according to the existing method utilized by us. A
    positive Section&#160;743(b) adjustment to that basis generally
    is depreciated or amortized in the same manner as property of
    the same type that has been newly placed in service by us. A
    negative Section&#160;743(b) adjustment to that basis generally
    is recovered over the remaining useful life of the
    partnership&#146;s recovery property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Section&#160;743(b) adjustment is advantageous if the
    purchaser&#146;s tax basis in his units is higher than the
    units&#146; share of the aggregate tax basis of our assets
    immediately prior to the transfer. In that case, as a result of
    the adjustment, the purchaser would have, among other items, a
    greater amount of depreciation and amortization deductions and
    his share of any gain or loss on a sale of our assets would be
    less. Conversely, a Section&#160;743(b) adjustment is
    disadvantageous if the purchaser&#146;s tax basis in his units
    is lower than those units&#146; share of the aggregate tax basis
    of our assets immediately prior to the purchase. Thus, the fair
    market value of the units may be affected either favorably or
    unfavorably by the Section&#160;743(b) adjustment. A basis
    adjustment is required regardless of whether a Section&#160;754
    election is made in the case
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    63
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    of a transfer on an interest in us if we have a substantial
    <FONT style="white-space: nowrap">built-in</FONT>
    loss immediately after the transfer, or if we distribute
    property and have a substantial basis reduction. Generally, a
    <FONT style="white-space: nowrap">built-in</FONT>
    loss or a basis reduction is substantial if it exceeds $250,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The calculations involved in the Section&#160;743(b) adjustment
    are complex and will be made on the basis of assumptions as to
    the value of our assets and in accordance with the Internal
    Revenue Code and applicable Treasury Regulations. We cannot
    assure you that the determinations we make will not be
    successfully challenged by the IRS and that the deductions
    resulting from them will not be reduced or disallowed
    altogether. Should the IRS require a different basis adjustment
    to be made, and should, in our judgment, the expense of
    compliance exceed the benefit of the election, we may seek
    consent from the IRS to revoke our Section&#160;754 election. If
    such consent is given, a subsequent purchaser of units may be
    allocated more income than he would have been allocated had the
    election not been revoked.
</DIV>
<A name='161'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Treatment of Operations</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Accounting Method and Taxable Year.</I></B>&#160;&#160;We
    use the year ending December&#160;31 as our taxable year and the
    accrual method of accounting for U.S.&#160;federal income tax
    purposes. Each unitholder will be required to include in income
    his share of our income, gain, loss, deduction and credit for
    our taxable year ending within or with his taxable year. In
    addition, a unitholder who disposes of all of his units must
    include his share of our income, gain, loss, deduction and
    credit through the date of disposition in income for his taxable
    year that includes the date of disposition, with the result that
    a unitholder who has a taxable year ending on a date other than
    December&#160;31 and who disposes of all of his units following
    the close of our taxable year but before the close of his
    taxable year must include his share of more than one year of our
    income, gain, loss, deduction and credit in income for the year
    of the disposition. Please read &#147;&#151;&#160;Disposition of
    Common Units&#160;&#151; Allocations Between Transferors and
    Transferees.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Asset Tax Basis, Depreciation and
    Amortization.</I></B>&#160;&#160;The tax basis of our assets
    will be used for purposes of computing depreciation and cost
    recovery deductions and, ultimately, gain or loss on the
    disposition of these assets. The U.S.&#160;federal income tax
    burden associated with any difference between the fair market
    value of our assets and their tax basis immediately prior to
    this offering will be borne by the general partner and the
    existing limited partners. Please read
    &#147;&#151;&#160;Consequences of Unit Ownership&#160;&#151;
    Allocation of Income, Gain, Loss and Deduction.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent allowable, we may elect to use the depreciation
    and cost recovery methods that will result in the largest
    deductions being taken in the early years after assets are
    placed in service. Property we subsequently acquire or construct
    may be depreciated using any method permitted by the Internal
    Revenue Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we dispose of depreciable property by sale, foreclosure or
    otherwise, all or a portion of any gain, determined by reference
    to the amount of depreciation previously deducted and the nature
    of the property, may be subject to the recapture rules and taxed
    as ordinary income rather than capital gain. Similarly, a
    unitholder who has taken cost recovery or depreciation
    deductions with respect to property we own will likely be
    required to recapture some or all of those deductions as
    ordinary income upon a sale of his interest in us. Please read
    &#147;&#151;&#160;Consequences of Unit Ownership&#160;&#151;
    Allocation of Income, Gain, Loss, Deduction and Credit&#148; and
    &#147;&#151;&#160;Disposition of Common Units&#160;&#151;
    Recognition of Gain or Loss.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The costs incurred by us in selling our units (or <I>syndication
    expenses</I>) must be capitalized and cannot be deducted
    currently, ratably or upon our termination. There are
    uncertainties regarding the classification of costs as
    syndication expenses. The underwriting discounts and commissions
    we incur will be treated as syndication expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Valuation and Tax Basis of Our
    Properties.</I></B>&#160;&#160;The U.S.&#160;federal income tax
    consequences of the ownership and disposition of units will
    depend in part on our estimates of the relative fair market
    values, and the initial tax bases, of our assets. Although we
    may from time to time consult with professional appraisers
    regarding valuation matters, we will make many of the relative
    fair market value estimates ourselves. These estimates and
    determinations of basis are subject to challenge and will not be
    binding on
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    64
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the IRS or the courts. If the estimates of fair market value or
    basis are later found to be incorrect, the character and amount
    of items of income, gain, loss, deductions or credits previously
    reported by unitholders might change, and unitholders might be
    required to adjust their tax liability for prior years and incur
    interest and penalties with respect to those adjustments.
</DIV>
<A name='162'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    of Common Units</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Recognition of Gain or Loss.</I></B>&#160;&#160;In
    general, gain or loss will be recognized on a sale of units
    equal to the difference between the amount realized and the
    unitholder&#146;s tax basis in the units sold. A
    unitholder&#146;s amount realized will be measured by the sum of
    the cash, the fair market value of other property received by
    him and his share of our nonrecourse liabilities. Because the
    amount realized includes a unitholder&#146;s share of our
    nonrecourse liabilities, the gain recognized on the sale of
    units could result in a tax liability in excess of any cash or
    property received from the sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior distributions from us in excess of cumulative net taxable
    income for a common unit that decreased a unitholder&#146;s tax
    basis in that common unit will, in effect, become taxable income
    if the common unit is sold at a price greater than the
    unitholder&#146;s tax basis in that common unit, even if the
    price received is less than his original cost. Except as noted
    below, gain or loss recognized by a unitholder on the sale or
    exchange of a unit generally will be taxable as capital gain or
    loss. Capital gain recognized by an individual on the sale of
    units held more than one year generally will be taxed at a
    maximum rate of 15% under current law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A portion of a unitholder&#146;s amount realized may be
    allocable to &#147;unrealized receivables&#148; or to
    &#147;inventory items&#148; we own. The term &#147;unrealized
    receivables&#148; includes potential recapture items, including
    depreciation and amortization recapture. A unitholder will
    recognize ordinary income or loss to the extent of the
    difference between the portion of the unitholder&#146;s amount
    realized allocable to unrealized receivables or inventory items
    and the unitholder&#146;s share of our basis in such receivables
    or inventory items. Ordinary income attributable to unrealized
    receivables, inventory items and depreciation or amortization
    recapture may exceed net taxable gain realized upon the sale of
    a unit and may be recognized even if a net taxable loss is
    realized on the sale of a unit. Thus, a unitholder may recognize
    both ordinary income and a capital loss upon a sale of units.
    Net capital losses generally may only be used to offset capital
    gains. An exception permits individuals to offset up to $3,000
    of net capital losses against ordinary income in any given year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The IRS has ruled that a partner who acquires interests in a
    partnership in separate transactions must combine those
    interests and maintain a single adjusted tax basis for all those
    interests. Upon a sale or other disposition of less than all of
    those interests, a portion of that tax basis must be allocated
    to the interests sold using an &#147;equitable
    apportionment&#148; method. Treasury Regulations under
    Section&#160;1223 of the Internal Revenue Code allow a selling
    unitholder who can identify common units transferred with an
    ascertainable holding period to elect to use the actual holding
    period of the common units transferred. Thus, according to the
    ruling, a common unitholder will be unable to select high or low
    basis common units to sell as would be the case with corporate
    stock, but, according to the regulations, may designate specific
    common units sold for purposes of determining the holding period
    of units transferred. A unitholder electing to use the actual
    holding period of common units transferred must consistently use
    that identification method for all subsequent sales or exchanges
    of common units. A unitholder considering the purchase of
    additional units or a sale of common units purchased in separate
    transactions is urged to consult his tax advisor as to the
    possible consequences of this ruling and application of the
    regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Specific provisions of the Internal Revenue Code affect the
    taxation of some financial products and securities, including
    partnership interests, by treating a taxpayer as having sold an
    &#147;appreciated&#148; partnership interest, one in which gain
    would be recognized if it were sold, assigned or terminated at
    its fair market value, if the taxpayer or related persons
    enter(s) into:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a short sale;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an offsetting notional principal contract;&#160;or
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    65
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a futures or forward contract with respect to the partnership
    interest or substantially identical property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, if a taxpayer has previously entered into a short
    sale, an offsetting notional principal contract or a futures or
    forward contract with respect to the partnership interest, the
    taxpayer will be treated as having sold that position if the
    taxpayer or a related person then acquires the partnership
    interest or substantially identical property. The Secretary of
    the Treasury is also authorized to issue regulations that treat
    a taxpayer that enters into transactions or positions that have
    substantially the same effect as the preceding transactions as
    having constructively sold the financial position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Allocations Between Transferors and
    Transferees.</I></B>&#160;&#160;In general, our taxable income
    or loss will be determined annually, will be prorated on a
    monthly basis and will be subsequently apportioned among the
    unitholders in proportion to the number of units owned by each
    of them as of the opening of the applicable exchange on the
    first business day of the month. However, gain or loss realized
    on a sale or other disposition of our assets other than in the
    ordinary course of business will be allocated among the
    unitholders on the first business day of the month in which that
    gain or loss is recognized. As a result of the foregoing, a
    unitholder transferring units may be allocated income, gain,
    loss, deduction and credit realized after the date of transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The use of this method for allocating income and deductions
    among unitholders may not be permitted under existing Treasury
    Regulations. Accordingly, Perkins Coie LLP is unable to opine on
    its validity. If this method were disallowed or applied only to
    transfers of less than all of the unitholder&#146;s interest,
    our taxable income or losses may be reallocated among the
    unitholders. We are authorized to revise our method of
    allocation to conform to a method permitted under any future
    Treasury Regulations or administrative guidance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder who owns units at any time during a calendar
    quarter and who disposes of them prior to the record date set
    for a cash distribution for that quarter will be allocated items
    of our income, gain, loss and deductions attributable to months
    within that quarter in which the units were held but will not be
    entitled to receive that cash distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Transfer Notification Requirements.</I></B>&#160;&#160;A
    unitholder who sells any of his units, other than through a
    broker, generally is required to notify us in writing of that
    sale within 30&#160;days after the sale (or, if earlier, January
    15 of the year following the sale). A unitholder who acquires
    units generally is required to notify us in writing of that
    acquisition within 30&#160;days after the purchase, unless a
    broker or nominee will satisfy such requirement. We are required
    to notify the IRS of any such transfers of units and to furnish
    specified information to the transferor and transferee. Failure
    to notify us of a transfer of units may lead to the imposition
    of substantial penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Constructive Termination.</I></B>&#160;&#160;We will be
    considered to have been terminated for U.S. federal income tax
    purposes if there is a sale or exchange of 50% or more of the
    total interests in our capital and profits within a
    <FONT style="white-space: nowrap">12-month</FONT>
    period. A constructive termination results in the closing of our
    taxable year for all unitholders. In the case of a unitholder
    reporting on a taxable year other than a fiscal year ending
    December&#160;31, the closing of our taxable year may result in
    more than 12&#160;months of our taxable income or loss being
    includable in his taxable income for the year of termination. We
    would be required to make new tax elections after a termination,
    including a new election under Section&#160;754 of the Internal
    Revenue Code, and a termination would result in a deferral of
    our deductions for depreciation. A termination could also result
    in penalties if we were unable to determine that the termination
    had occurred. Moreover, a termination might either accelerate
    the application of, or subject us to, tax legislation applicable
    to a newly formed partnership.
</DIV>
<A name='163'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Foreign
    Tax Credit Considerations</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to detailed limitations set forth in the Internal
    Revenue Code, a unitholder may elect to claim a credit against
    his liability for U.S.&#160;federal income tax for his share of
    foreign income taxes (and certain foreign taxes imposed in lieu
    of a tax based upon income) paid by us. Income allocated to
    unitholders likely
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    66
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    will constitute foreign source income falling in the general
    foreign tax credit category for purposes of the
    U.S.&#160;foreign tax credit limitation. The rules relating to
    the determination of the foreign tax credit are complex and
    prospective unitholders are urged to consult their own tax
    advisors to determine whether or to what extent they would be
    entitled to such credit. Unitholders who do not elect to claim
    foreign tax credits may instead claim a deduction for their
    shares of foreign taxes paid by us.
</DIV>
<A name='164'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax-Exempt
    Organizations and
    <FONT style="white-space: nowrap">Non-U.S.&#160;Investors</FONT></FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investments in units by employee benefit plans, other tax-exempt
    organizations and
    <FONT style="white-space: nowrap">non-U.S.&#160;persons,</FONT>
    including nonresident aliens of the United States,
    <FONT style="white-space: nowrap">non-U.S.&#160;corporations</FONT>
    and
    <FONT style="white-space: nowrap">non-U.S.&#160;trusts</FONT>
    and estates (collectively,
    <I><FONT style="white-space: nowrap">non-U.S.&#160;unitholders</FONT></I>)
    raise issues unique to those investors and, as described below,
    may result in substantially adverse tax consequences to them.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Employee benefit plans and most other organizations exempt from
    U.S.&#160;federal income tax, including individual retirement
    accounts and other retirement plans, are subject to
    U.S.&#160;federal income tax on unrelated business taxable
    income. Virtually all of our income allocated to a unitholder
    that is a tax-exempt organization will be unrelated business
    taxable income to them subject to U.S.&#160;federal income tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    may be subject to a 4% U.S.&#160;federal income tax on his share
    of the U.S.&#160;source portion of our gross income attributable
    to transportation that begins or ends (but not both) in the
    United States, unless either (a)&#160;an exemption applies and
    he files a U.S.&#160;federal income tax return to claim that
    exemption or (b)&#160;that income is effectively connected with
    the conduct of a trade or business in the United States (or
    <I>U.S.&#160;effectively connected income</I>). For this
    purpose, transportation income includes income from the use,
    hiring or leasing of a vessel to transport cargo, or the
    performance of services directly related to the use of any
    vessel to transport cargo. The U.S.&#160;source portion of our
    transportation income is deemed to be 50% of the income
    attributable to voyages that begin or end in the United States.
    Generally, no amount of the income from voyages that begin and
    end outside the United States is treated as U.S.&#160;source,
    and consequently none of our transportation income attributable
    to such voyages is subject to U.S.&#160;federal income tax.
    Although the entire amount of transportation income from voyages
    that begin and end in the United States would be fully taxable
    in the United States, we currently do not expect to have any
    transportation income from voyages that begin and end in the
    United States; however, there is no assurance that such voyages
    will not occur.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    may be entitled to an exemption from the 4% U.S.&#160;federal
    income tax or a refund of tax withheld on U.S.&#160;effectively
    connected income that constitutes transportation income if any
    of the following applies: (1)&#160;such
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    qualifies for an exemption from this tax under an income tax
    treaty between the United States and the country where such
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    is resident; (2)&#160;in the case of an individual
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder,</FONT>
    he qualifies for the exemption from tax under
    Section&#160;872(b)(1) of the Internal Revenue Code as a
    resident of a country that grants an equivalent exemption from
    tax to residents of the United States; or (3)&#160;in the case
    of a corporate
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder,</FONT>
    it qualifies for the exemption from tax under Section&#160;883
    of the Internal Revenue Code (or the <I>Section&#160;883
    Exemption</I>) (for the rules relating to qualification for the
    Section&#160;883 Exemption, please read below under
    &#147;&#151;&#160;Possible Classification as a
    Corporation&#160;&#151; The Section&#160;883 Exemption&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be required to withhold U.S.&#160;federal income tax,
    computed at the highest statutory rate, from cash distributions
    to
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholders</FONT>
    with respect to their shares of our income that is
    U.S.&#160;effectively connected income. Our transportation
    income generally should not be treated as U.S.&#160;effectively
    connected income unless we have a fixed place of business in the
    United States involved in the earning of that transportation
    income and certain other requirements are satisfied. While we do
    not expect to have a fixed place of business in the United
    States, there can be no guarantee that this will not change.
    Under a ruling of the IRS, a portion of any gain recognized on
    the sale or other disposition of a unit by a
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    may be treated as U.S.&#160;effectively connected income to the
    extent we have a fixed place of business in the United States
    and a sale of our assets would have given rise to
    U.S.&#160;effectively connected income. A
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholder</FONT>
    would be required to file a U.S.&#160;federal income tax return
    to report his U.S.&#160;effectively connected income (including
    his share of any such income earned by us) and to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    pay U.S.&#160;federal income tax, or claim a credit or refund
    for tax withheld on such income. Further, unless an exemption
    applies, a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    investing in units may be subject to a branch profits tax, at a
    30% rate or lower rate prescribed by a treaty, with respect to
    its U.S.&#160;effectively connected income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Non-U.S.&#160;unitholders</FONT>
    must apply for and obtain a U.S.&#160;taxpayer identification
    number in order to file U.S.&#160;federal income tax returns and
    must provide that identification number to us for purposes of
    any U.S.&#160;federal income tax information returns we may be
    required to file.
    <FONT style="white-space: nowrap">Non-U.S.&#160;unitholders</FONT>
    are encouraged to consult with their own tax advisors regarding
    the U.S.&#160;federal, state and local tax consequences of an
    investment in units and any filing requirements related thereto.
</DIV>
<A name='165'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Functional
    Currency</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to determine the functional currency of any of
    our operations that constitute a separate qualified business
    unit (or <I>QBU</I>) for U.S.&#160;federal income tax purposes
    and report the affairs of any QBU in this functional currency to
    our unitholders. Any transactions conducted by us other than in
    the U.S.&#160;dollar or by a QBU other than in its functional
    currency may give rise to foreign currency exchange gain or
    loss. Further, if a QBU is required to maintain a functional
    currency other than the U.S.&#160;dollar, a unitholder may be
    required to recognize foreign currency translation gain or loss
    upon a distribution of money or property from a QBU or upon the
    sale of common&#160;units, and items or income, gain, loss or
    deduction allocated to the unitholder in such functional
    currency must be translated into the unitholder&#146;s
    functional currency.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the foreign currency rules, a QBU includes a
    separate trade or business owned by a partnership in the event
    separate books and records are maintained for that separate
    trade or business. The functional currency of a QBU is
    determined based upon the economic environment in which the QBU
    operates. Thus, a QBU whose revenues and expenses are primarily
    determined in a currency other than the U.S.&#160;dollar will
    have a
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar</FONT>
    functional currency. We believe our primary operations
    constitute a QBU whose functional currency is the
    U.S.&#160;dollar, but certain of our operations constitute
    separate QBUs whose functional currencies are other than the
    U.S.&#160;dollar.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under recently proposed regulations (or the <I>Section&#160;987
    Proposed Regulations</I>), the amount of foreign currency
    translation gain or loss recognized upon a distribution of money
    or property from a QBU or upon the sale of common units will
    reflect the appreciation or depreciation in the functional
    currency value of certain assets and liabilities of the QBU
    between the time the unitholder purchased his common units and
    the time we receive distributions from such QBU or the
    unitholder sells his common units. Foreign currency translation
    gain or loss will be treated as ordinary income or loss. A
    unitholder must adjust the U.S.&#160;federal income tax basis in
    his common units to reflect such income or loss prior to
    determining any other U.S.&#160;federal income tax consequences
    of such distribution or sale. Please read
    &#147;&#151;&#160;Consequences of Unit Ownership&#160;&#151;
    Basis of Common Units.&#148; A unitholder who owns less than a
    five percent interest in our capital or profits generally may
    elect not to have these rules apply by attaching a statement to
    his tax return for the first taxable year the unitholder intends
    the election to be effective. Further, for purposes of computing
    his taxable income and U.S.&#160;federal income tax basis in his
    common units, a unitholder will be required to translate into
    his own functional currency items of income, gain, loss or
    deduction of such QBU and his share of such QBU&#146;s
    liabilities. We intend to provide such information based on
    generally applicable U.S.&#160;exchange rates as is necessary
    for unitholders to comply with the requirements of the
    Section&#160;987 Proposed Regulations as part of the
    U.S.&#160;federal income tax information we will furnish
    unitholders each year. Please read
    &#147;&#151;&#160;Administrative Matters&#160;&#151; Information
    Returns and Audit Procedures.&#148; However, a unitholder may be
    entitled to make an election to apply an alternative exchange
    rate with respect to the foreign currency translation of certain
    items. Unitholders who desire to make such an election should
    consult their own tax advisors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based upon our current projections of the capital invested in
    and profits of the
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar</FONT>
    QBUs, we believe that unitholders will be required to recognize
    only a nominal amount of foreign currency translation gain or
    loss each year and upon their sale of units. Nonetheless, the
    rules for determining the amount of translation gain or loss are
    not entirely clear at present as the Section&#160;987 Proposed
    Regulations
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    68
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    currently are not effective. Please consult your own tax advisor
    for specific advice regarding the application of the rules for
    recognizing foreign currency translation gain or loss under your
    own circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to a unitholder&#146;s recognition of foreign
    currency translation gain or loss, the U.S.&#160;dollar QBU will
    engage in certain transactions denominated in the Euro, which
    will give rise to a certain amount of foreign currency exchange
    gain or loss each year. This foreign currency exchange gain or
    loss will be treated as ordinary income or loss.
</DIV>
<A name='166'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Administrative
    Matters</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Information Returns and Audit
    Procedures.</I></B>&#160;&#160;We intend to furnish to each
    unitholder, within 90&#160;days after the close of each calendar
    year, specific U.S.&#160;federal income tax information,
    including a document in the form of IRS Form&#160;1065,
    Schedule&#160;K-1, which sets forth his share of our income,
    gain, loss, deductions and credits as computed for
    U.S.&#160;federal income tax purposes for our preceding taxable
    year. In preparing this information, which will not be reviewed
    by counsel, we will take various accounting and reporting
    positions, some of which have been mentioned earlier, to
    determine his share of such income, gain, loss, deduction and
    credit. We cannot assure you that those positions will yield a
    result that conforms to the requirements of the Internal Revenue
    Code, Treasury Regulations or administrative interpretations of
    the IRS. Neither we nor Perkins Coie LLP can assure prospective
    unitholders that the IRS will not successfully contend that
    those positions are impermissible. Any challenge by the IRS
    could negatively affect the value of the units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will be obligated to file U.S.&#160;federal income tax
    information returns with the IRS for any year in which we earn
    any U.S.&#160;source income or U.S.&#160;effectively connected
    income. In the event we were obligated to file a
    U.S.&#160;federal income tax information return but failed to do
    so, unitholders would not be entitled to claim any deductions,
    losses or credits for U.S.&#160;federal income tax purposes
    relating to us. Consequently, we may file U.S.&#160;federal
    income tax information returns for any given year. The IRS may
    audit any such information returns that we file. Adjustments
    resulting from an IRS audit of our return may require each
    unitholder to adjust a prior year&#146;s tax liability, and may
    result in an audit of his return. Any audit of a
    unitholder&#146;s return could result in adjustments not related
    to our returns as well as those related to our returns. Any IRS
    audit relating to our items of income, gain, loss, deduction or
    credit for years in which we are not required to file and do not
    file a U.S.&#160;federal income tax information return would be
    conducted at the partner-level, and each unitholder may be
    subject to separate audit proceedings relating to such items.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For years in which we file or are required to file
    U.S.&#160;federal income tax information returns, we will be
    treated as a separate entity for purposes of any
    U.S.&#160;federal income tax audits, as well as for purposes of
    judicial review of administrative adjustments by the IRS and tax
    settlement proceedings. For such years, the tax treatment of
    partnership items of income, gain, loss, deduction and credit
    will be determined in a partnership proceeding rather than in
    separate proceedings with the partners. The Internal Revenue
    Code requires that one partner be designated as the &#147;Tax
    Matters Partner&#148; for these purposes. The partnership
    agreement names Teekay GP L.L.C. as our Tax Matters Partner.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Tax Matters Partner will make some U.S.&#160;federal tax
    elections on our behalf and on behalf of unitholders. In
    addition, the Tax Matters Partner can extend the statute of
    limitations for assessment of tax deficiencies against
    unitholders for items reported in the information returns we
    file. The Tax Matters Partner may bind a unitholder with less
    than a 1% profits interest in us to a settlement with the IRS
    with respect to these items unless that unitholder elects, by
    filing a statement with the IRS, not to give that authority to
    the Tax Matters Partner. The Tax Matters Partner may seek
    judicial review, by which all the unitholders are bound, of a
    final partnership administrative adjustment and, if the Tax
    Matters Partner fails to seek judicial review, judicial review
    may be sought by any unitholder having at least a 1% interest in
    profits or by any group of unitholders having in the aggregate
    at least a 5% interest in profits. However, only one action for
    judicial review will go forward, and each unitholder with an
    interest in the outcome may participate.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    69
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A unitholder must file a statement with the IRS identifying the
    treatment of any item on his U.S.&#160;federal income tax return
    that is not consistent with the treatment of the item on an
    information return that we file. Intentional or negligent
    disregard of this consistency requirement may subject a
    unitholder to substantial penalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Special Reporting Requirements for Owners of
    <FONT style="white-space: nowrap">Non-U.S.&#160;Partnerships.</FONT></I></B>&#160;&#160;A
    U.S.&#160;person who either contributes more than $100,000 to us
    (when added to the value of any other property contributed to us
    by such person or a related person during the previous
    12&#160;months), or following a contribution owns, directly,
    indirectly or by attribution from certain related persons, at
    least a 10% interest in us, is required to file IRS
    Form&#160;8865 with his U.S.&#160;federal income tax return for
    the year of the contribution to report the contribution and
    provide certain details about himself and certain related
    persons, us and any persons that own a 10% or greater direct
    interest in us. We will provide each unitholder with the
    necessary information about us and those persons who own a 10%
    or greater direct interest in us along with the
    Schedule&#160;K-1 information described previously.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the foregoing, a U.S.&#160;person who directly
    owns at least a 10% interest in us may be required to make
    additional disclosures on IRS Form&#160;8865 in the event such
    person acquires, disposes or has his interest in us
    substantially increased or reduced. Further, a U.S.&#160;person
    who directly, indirectly or by attribution from certain related
    persons, owns at least a 10% interest in us may be required to
    make additional disclosures on IRS Form&#160;8865 in the event
    such person, when considered together with any other
    U.S.&#160;persons who own at least a 10% interest in us, owns a
    greater than 50% interest in us. For these purposes, an
    &#147;interest&#148; in us generally is defined to include an
    interest in our capital or profits or an interest in our
    deductions or losses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Significant penalties may apply for failing to satisfy IRS
    Form&#160;8865 filing requirements and thus unitholders are
    advised to contact their tax advisors to determine the
    application of these filing requirements under their own
    circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>Accuracy-related Penalties.</I></B>&#160;&#160;An
    additional tax equal to 20% of the amount of any portion of an
    underpayment of U.S.&#160;federal income tax attributable to one
    or more specified causes, including negligence or disregard of
    rules or regulations and substantial understatements of income
    tax, is imposed by the Internal Revenue Code. No penalty will be
    imposed, however, for any portion of an underpayment if it is
    shown that there was a reasonable cause for that portion and
    that the taxpayer acted in good faith regarding that portion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial understatement of income tax in any taxable year
    exists if the amount of the understatement exceeds the greater
    of 10% of the tax required to be shown on the return for the
    taxable year or $5,000. The amount of any understatement subject
    to penalty generally is reduced if any portion is attributable
    to a position adopted on the return:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;for which there is, or was, &#147;substantial
    authority&#148;;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;as to which there is a reasonable basis and the
    pertinent facts of that position are disclosed on the return.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    More stringent rules, including additional penalties and
    extended statutes of limitations, may apply as a result of our
    participation in &#147;listed transactions&#148; or
    &#147;reportable transactions with a significant tax avoidance
    purpose.&#148; While we do not anticipate participating in such
    transactions, if any item of income, gain, loss, deduction or
    credit included in the distributive shares of unitholders for a
    given year might result in an &#147;understatement&#148; of
    income relating to such a transaction, we will disclose the
    pertinent facts on a U.S.&#160;federal income tax information
    return for such year. In such event, we also will make a
    reasonable effort to furnish sufficient information for
    unitholders to make adequate disclosure on their returns and to
    take other actions as may be appropriate to permit unitholders
    to avoid liability for penalties.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    70
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='167'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Possible
    Classification as a Corporation</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to meet the Qualifying Income Exception described
    previously with respect to our classification as a partnership
    for U.S.&#160;federal income tax purposes, other than a failure
    that is determined by the IRS to be inadvertent and that is
    cured within a reasonable time after discovery, we will be
    treated as a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    for U.S.&#160;federal income tax purposes. If previously treated
    as a partnership, our change in status would be deemed to have
    been effected by our transfer of all of our assets, subject to
    liabilities, to a newly formed
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation,</FONT>
    in return for stock in that corporation, and then our
    distribution of that stock to our unitholders and other owners
    in liquidation of their interests in us. Unitholders that are
    U.S.&#160;persons would be required to file IRS Form&#160;926 to
    report these deemed transfers and any other transfers they made
    to us while we were treated as a corporation and may be required
    to recognize income or gain for U.S.&#160;federal income tax
    purposes to the extent of certain prior deductions or losses and
    other items. Substantial penalties may apply for failure to
    satisfy these reporting requirements, unless the person
    otherwise required to report shows such failure was due to
    reasonable cause and not willful neglect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were treated as a corporation in any taxable year, either
    as a result of a failure to meet the Qualifying Income Exception
    or otherwise, our items of income, gain, loss, deduction and
    credit would not pass through to unitholders. Instead, we would
    be subject to U.S.&#160;federal income tax based on the rules
    applicable to foreign corporations, not partnerships, and such
    items would be treated as our own. Any distribution made to a
    unitholder would be treated as taxable dividend income to the
    extent of our current or accumulated earnings and profits, a
    nontaxable return of capital to the extent of the
    unitholder&#146;s tax basis in his common units, and taxable
    capital gain thereafter. Section&#160;743(b) adjustments to the
    basis of our assets would no longer be available to purchasers
    in the marketplace. Please read &#147;&#151;&#160;Consequences
    of Unit Ownership&#160;&#151; Section&#160;754 Election.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Operating Income</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event we were treated as a corporation, our operating
    income may be subject to U.S.&#160;federal income taxation under
    one of two alternative tax regimes (the 4% gross basis tax or
    the net basis tax, as described below).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The 4%
    Gross Basis Tax</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be subject to a 4% U.S.&#160;federal income tax on the
    U.S.&#160;source portion of our gross income (without benefit of
    deductions) attributable to transportation that begins or ends
    (but not both) in the United States, unless the Section&#160;883
    Exemption applies (as more fully described below under
    &#147;&#151;&#160;The Section&#160;883 Exemption&#148;) and we
    file a U.S.&#160;federal income tax return to claim that
    exemption. For this purpose, gross income attributable to
    transportation (or <I>transportation income</I>) includes income
    from the use, hiring or leasing of a vessel to transport cargo,
    or the performance of services directly related to the use of
    any vessel to transport cargo, and thus includes time charter or
    bareboat charter income. The U.S.&#160;source portion of our
    transportation income is deemed to be 50% of the income
    attributable to voyages that begin or end (but not both) in the
    United States. Generally, no amount of the income from voyages
    that begin and end outside the United States is treated as
    U.S.&#160;source, and consequently none of the transportation
    income attributable to such voyages is subject to
    U.S.&#160;federal income tax. Although the entire amount of
    transportation income from voyages that begin and end in the
    United States would be fully taxable in the United States, we
    currently do not expect to have any transportation income from
    voyages that begin and end in the United States; however, there
    is no assurance that such voyages will not occur.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Net
    Income Tax and Branch Tax Regime</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently do not expect to have a fixed place of business in
    the United States. Nonetheless, if this were to change or we
    otherwise were treated as having such a fixed place of business
    involved in earning U.S.&#160;source transportation income, such
    transportation income may be treated as U.S. effectively
    connected income. Any income that we earn that is treated as
    U.S.&#160;effectively connected income would be subject to
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    71
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    U.S.&#160;federal corporate income tax (the highest statutory
    rate is currently 35%), unless the Section&#160;883 Exemption
    (as discussed below) applied. The 4% U.S.&#160;federal income
    tax described above is inapplicable to U.S.&#160;effectively
    connected income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the Section&#160;883 Exemption applied, a 30% branch
    profits tax imposed under Section&#160;884 of the Internal
    Revenue Code also would apply to our earnings that result from
    U.S.&#160;effectively connected income, and a branch interest
    tax could be imposed on certain interest paid or deemed paid by
    us. Furthermore, on the sale of a vessel that has produced
    U.S.&#160;effectively connected income, we could be subject to
    the net basis corporate income tax and to the 30% branch profits
    tax with respect to our gain not in excess of certain prior
    deductions for depreciation that reduced U.S.&#160;effectively
    connected income. Otherwise, we would not be subject to
    U.S.&#160;federal income tax with respect to gain realized on
    sale of a vessel because it is expected that any sale of a
    vessel will be structured so that it is considered to occur
    outside of the United States and so that it is not attributable
    to an office or other fixed place of business in the United
    States.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    Section&#160;883 Exemption</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, if a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    satisfies the requirements of Section&#160;883 of the Internal
    Revenue Code and the regulations thereunder (or the Final
    Section&#160;883 Regulations), it will not be subject to the 4%
    gross basis tax or the net basis tax described above on its
    U.S.&#160;source transportation income attributable to voyages
    that begin or end (but not both) in the United States (or
    <I>U.S.&#160;Source International Shipping Income</I>).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    will qualify for the Section&#160;883 Exemption if, among other
    things, it is organized in a jurisdiction outside the United
    States that grants an equivalent exemption from tax to
    corporations organized in the United States (or an <I>Equivalent
    Exemption</I>), it meets one of three tests described below:
    (1)&#160;the more than 50% ownership test (or the <I>Ownership
    Test</I>); (2)&#160;the <I>&#147;Publicly Traded Test&#148;</I>;
    or (3)&#160;the controlled foreign corporation test (or the
    <I>CFC Test</I>)&#160;&#151; and certain substantiation,
    reporting and other requirements are met.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to satisfy the Ownership Test, a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    must be able to substantiate that more than 50% of the value of
    its stock is owned, directly or indirectly applying attribution
    rules, by &#147;qualified shareholders&#148; for at least half
    of the number of days in the
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation&#146;s</FONT>
    taxable year, and the
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    must comply with certain substantiation and reporting
    requirements. For this purpose, qualified shareholders are
    individuals who are residents (as defined for U.S.&#160;federal
    income tax purposes) of countries that grant an Equivalent
    Exemption,
    <FONT style="white-space: nowrap">non-U.S.&#160;corporations</FONT>
    that meet the Publicly Traded Test of the Final Section&#160;883
    Regulations and are organized in countries that grant an
    Equivalent Exemption, or certain foreign governments, non profit
    organizations and certain beneficiaries of foreign pension
    funds. Unitholders who are citizens or residents of the United
    States or are domestic corporations are not qualified
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, a corporation claiming the Section&#160;883
    Exemption based on the Ownership Test must obtain statements
    from the holders relied upon to satisfy the Ownership Test,
    signed under penalty of perjury, including the owner&#146;s
    name, permanent address and country where the individual is
    fully liable to tax, if any, a description of the owner&#146;s
    ownership interest in the
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation,</FONT>
    including information regarding ownership in any intermediate
    entities, and certain other information. In addition, we would
    be required to file a U.S.&#160;federal income tax return and
    list on our U.S.&#160;federal income tax return the name and
    address of each unitholder holding 5% or more of the value of
    our units who is relied upon to meet the Ownership Test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Publicly Traded Test requires that one or more classes of
    equity representing more than 50% of the voting power and value
    in a
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    be &#147;primarily and regularly traded&#148; on an established
    securities market either in the U.S.&#160;or in a foreign
    country that grants an Equivalent Exemption. For this purpose,
    if one or more 5% shareholders (i.e., a shareholder holding,
    actually or constructively, at least 5% of the vote and value of
    a class of equity) own in the aggregate 50% or more of the vote
    and value of a class of equity, such class of equity will not be
    treated as primarily and regularly traded on an established
    securities market.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    72
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The CFC Test requires that the
    <FONT style="white-space: nowrap">non-U.S.&#160;corporation</FONT>
    be treated as a controlled foreign corporation for
    U.S.&#160;federal income tax purposes and a qualified U.S.
    person ownership test is met (for the definition of
    &#147;controlled foreign corporation&#148; please read the
    discussion below under &#147;&#151;&#160;Consequences of
    Possible Controlled Foreign Corporation Classification&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are organized under the laws of the Republic of The Marshall
    Islands. The U.S.&#160;Treasury Department has recognized the
    Republic of The Marshall Islands as a jurisdiction that grants
    an Equivalent Exemption. Consequently, in the event we were
    treated as a corporation for U.S.&#160;federal income tax
    purposes, our U.S.&#160;Source International Shipping Income
    (including for this purpose, any such income earned by our
    subsidiaries that have properly elected to be treated as
    partnerships or disregarded as entities separate from us for
    U.S.&#160;federal income tax purposes), would be exempt from
    U.S.&#160;federal income taxation provided we meet the Ownership
    Test or we satisfy either the CFC Test or the Publicly Traded
    Test. We do not believe that we will meet the CFC Test, as we do
    not expect to be a CFC (please read below under
    &#147;&#151;&#160;Consequences of Possible Controlled Foreign
    Corporation Classification&#148;), and while not completely
    clear, we may not meet the Publicly Traded Test due to Teekay
    Shipping Corporation&#146;s substantial indirect ownership of
    us. Nonetheless, as of the date of this prospectus, we believe
    that we should satisfy the Ownership Test based upon the
    ownership immediately after the offering of more than 50% of the
    value of us by Teekay Shipping Corporation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based on information provided by Teekay Shipping Corporation,
    Teekay Shipping Corporation is organized in the Republic of The
    Marshall Islands and meets the Publicly Traded Test under
    current law and under the Final Section&#160;883 Regulations. As
    long as Teekay Shipping Corporation owns more than 50% of the
    value of us and satisfies the Publicly Traded Test, we will
    satisfy the Ownership Test and will qualify for the
    Section&#160;883 Exemption, provided that Teekay Shipping
    Corporation provides properly completed ownership statements to
    us as required under the Final Section&#160;883 Regulations and
    we satisfy certain substantiation and documentation
    requirements. As of the date hereof, Teekay Shipping Corporation
    would be willing to provide us with such ownership statements as
    long as it is a qualifying shareholder. There is no assurance
    that Teekay Shipping Corporation will continue to satisfy the
    requirements for being a qualified shareholder of us (i.e., it
    will meet the Publicly Traded Test) or that it alone will own
    more than 50% of the value of our units. At some time in the
    future, it may become necessary for us to look to our other
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholders</FONT>
    to determine whether more than 50% of our units, by value, are
    owned by
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholders</FONT>
    who are qualifying shareholders and certain
    <FONT style="white-space: nowrap">non-U.S.&#160;unitholders</FONT>
    may be asked to provide ownership statements, signed under
    penalty of perjury, with respect to their investment in our
    units in order for us to qualify for the Section&#160;883
    Exemption. If we cannot obtain these statements from unitholders
    holding, in the aggregate, more than 50% of the value of our
    units, under the Final Section&#160;883 Regulations, we may not
    be eligible to claim the Section&#160;883 Exemption, and,
    therefore, we would be required to pay a 4% tax on the gross
    amount of our U.S.&#160;Source International Shipping Income,
    thereby reducing the amount of cash available for distribution
    to unitholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The determination of whether we will satisfy the Ownership Test
    at any given time depends upon a multitude of factors, including
    Teekay Shipping Corporation&#146;s ownership of us, whether
    Teekay Shipping Corporation&#146;s stock is publicly traded, the
    concentration of ownership of Teekay Shipping Corporation&#146;s
    own stock and the satisfaction of various substantiation and
    documentation requirements. There can be no assurance that we
    will satisfy these requirements at any given time and thus that
    our U.S.&#160;Source International Shipping Income would be
    exempt from U.S.&#160;federal income taxation by reason of
    Section&#160;883 in any of our taxable years if we were treated
    as a corporation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Consequences
    of Possible PFIC Classification</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A non-United States entity treated as a corporation for
    U.S.&#160;federal income tax purposes will be a PFIC in any
    taxable year in which, after taking into account the income and
    assets of the corporation and certain subsidiaries pursuant to a
    &#147;look through&#148; rule, either (1)&#160;at least 75% of
    its gross income is &#147;passive&#148; income (or the <I>income
    test</I>) or (2)&#160;at least 50% of the average value of its
    assets is attributable to assets that produce passive income or
    are held for the production of passive income (or the <I>assets
    test</I>).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    73
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based upon our current assets and operations, we do not believe
    that we would be considered to be a PFIC even if we were treated
    as a corporation. However, legal uncertainties are involved and,
    in addition, there is no assurance that the nature of our
    assets, income and operations will remain the same in the
    future. We are not relying on an opinion of counsel on this
    issue. There is a meaningful risk that the IRS would consider us
    to be a PFIC, and no assurance can be given that we would not
    become a PFIC in the future, in the event we were treated as a
    corporation for U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we were classified as a PFIC, for any year during which a
    unitholder owns units, he generally will be subject to special
    rules (regardless of whether we continue thereafter to be a
    PFIC) with respect to (1)&#160;any &#147;excess
    distribution&#148; (generally, any distribution received by a
    unitholder in a taxable year that is greater than 125% of the
    average annual distributions received by the unitholder in the
    three preceding taxable years or, if shorter, the
    unitholder&#146;s holding period for the units) and (2)&#160;any
    gain realized upon the sale or other disposition of units. Under
    these rules:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the excess distribution or gain will be allocated ratably over
    the unitholder&#146;s holding period;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount allocated to the current taxable year and any year
    prior to the first year in which we were a PFIC will be taxed as
    ordinary income in the current year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount allocated to each of the other taxable years in the
    unitholder&#146;s holding period will be subject to
    U.S.&#160;federal income tax at the highest rate in effect for
    the applicable class of taxpayer for that year;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an interest charge for the deemed deferral benefit will be
    imposed with respect to the resulting tax attributable to each
    of these other taxable years.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain elections, such as a qualified electing fund (or
    <I>QEF</I>) election or mark to market election, may be
    available to a unitholder if we were classified as a PFIC. If we
    determine that we are or will be a PFIC, we will provide
    unitholders with information concerning the potential
    availability of such elections.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under current law, dividends received by individual citizens or
    residents of the United States from domestic corporations and
    qualified foreign corporations generally are treated as net
    capital gains and subject to U.S.&#160;federal income tax at
    reduced rates (generally 15%). However, if we were classified as
    a PFIC for our taxable year in which we pay a dividend, we would
    not be considered a qualified foreign corporation, and
    individuals receiving such dividends would not be eligible for
    the reduced rate of U.S.&#160;federal income tax.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;</FONT></I></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Consequences
    of Possible Controlled Foreign Corporation
    Classification</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If more than 50% of either the total combined voting power of
    our outstanding units entitled to vote or the total value of all
    of our outstanding units were owned, actually or constructively,
    by citizens or residents of the United States,
    U.S.&#160;partnerships or corporations, or U.S.&#160;estates or
    trusts (as defined for U.S.&#160;federal income tax purposes),
    each of which owned, actually or constructively, 10% or more of
    the total combined voting power of our outstanding units
    entitled to vote (each, a <I>U.S.&#160;Shareholder</I>), we
    could be treated as a controlled foreign corporation (or
    <I>CFC</I>) at any such time as we are properly classified as a
    corporation for U.S.&#160;federal income tax purposes.
    U.S.&#160;Shareholders of a CFC are treated as receiving current
    distributions of their shares of certain income of the CFC (not
    including, under current law, certain undistributed earnings
    attributable to shipping income) without regard to any actual
    distributions and are subject to other burdensome
    U.S.&#160;federal income tax and administrative requirements but
    generally are not also subject to the requirements generally
    applicable to owners of a PFIC. Although we do not believe we
    will be a CFC following the Offering, U.S.&#160;persons
    purchasing a substantial interest in us should consider the
    potential implications of being treated as a
    U.S.&#160;Shareholder in the event we were a CFC in the future.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    74
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='168'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Consequences of Ownership of Debt Securities</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A description of the material federal income tax consequences of
    the acquisition, ownership and disposition of debt securities
    will be set forth in the prospectus supplement relating to the
    offering of any debt securities.
</DIV>
<A name='169'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NON-UNITED
    STATES TAX CONSEQUENCES</FONT></B>
</DIV>
</A>
<A name='170'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Marshall
    Islands Tax Consequences</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion is based upon the opinion of Watson,
    Farley&#160;&#038; Williams (New York) LLP, our counsel as to
    matters of the laws of the Republic of The Marshall Islands,
    regarding the material Marshall Islands tax consequences of our
    activities to holders of our common units who do not reside in,
    maintain offices in or engage in business in the Marshall
    Islands.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we and our subsidiaries do not, and we do not expect
    that we and our subsidiaries will, conduct business or
    operations in the Marshall Islands, and because all
    documentation related to this offering will be executed outside
    of the Marshall Islands, under current Marshall Islands law
    holders of our common units will not be subject to Marshall
    Islands taxation or withholding on distributions, including upon
    a return of capital, we make to our unitholders. In addition,
    our unitholders will not be subject to Marshall Islands stamp,
    capital gains or other taxes on the purchase, ownership or
    disposition of common units, and they will not be required by
    the Republic of The Marshall Islands to file a tax return
    relating to the common units.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is the responsibility of each unitholder to investigate the
    legal and tax consequences, under the laws of pertinent
    jurisdictions, including the Marshall Islands, of his investment
    in us. Accordingly, each prospective unitholder is urged to
    consult, and depend upon, his tax counsel or other advisor with
    regard to those matters. Further, it is the responsibility of
    each unitholder to file all state, local and
    <FONT style="white-space: nowrap">non-U.S.,</FONT> as
    well as U.S.&#160;federal tax returns, that may be required of
    him.
</DIV>
<A name='171'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Canadian
    Federal Income Tax Consequences</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion is a summary of the material Canadian
    federal income tax consequences under the Income Tax Act
    (Canada) (or the <I>Canada Tax Act</I>), as of the date of this
    prospectus, that we believe are relevant to holders of our
    common units who are, at all relevant times, for the purposes of
    the Canada Tax Act and the Canada-United States Tax Convention
    1980 (or the <I>Canada-U.S.&#160;Treaty</I>) resident in the
    United States and who deal at arm&#146;s length with us and
    Teekay Shipping Corporation (or <I>U.S.&#160;Resident
    Holders</I>).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Canada Tax Act, no taxes on income (including taxable
    capital gains) are payable by U.S.&#160;Resident Holders in
    respect of the acquisition, holding, disposition or redemption
    of the common units, provided that we do not carry on business
    in Canada and such U.S.&#160;Resident Holders do not, for the
    purposes of the Canada-U.S.&#160;Treaty, otherwise have a
    permanent establishment or fixed base in Canada to which such
    common units pertain and, in addition, do not use or hold and
    are not deemed or considered to use or hold such common units in
    the course of carrying on a business in Canada and, in the case
    of any U.S.&#160;Resident Holders that carry on an insurance
    business in Canada and elsewhere, such U.S.&#160;Resident
    Holders establish that the common units are not effectively
    connected with their insurance business carried on in Canada.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this connection, we believe that our activities and affairs
    can be conducted in a manner that we will not be carrying on
    business in Canada and that U.S.&#160;Resident Holders should
    not be considered to be carrying on business in Canada for
    purposes of the Canada Tax Act solely by reason of the
    acquisition, holding, disposition or redemption of their common
    units. We intend that this is and continues to be the case,
    notwithstanding that certain services will be provided to Teekay
    LNG Partners L.P., indirectly through arrangements with Teekay
    Shipping Limited (a subsidiary of Teekay Shipping Corporation
    that is resident and based in the Bahamas), by Canadian service
    providers, as discussed below.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Canada Tax Act, a resident of Canada (which may
    include a foreign corporation the central management and control
    of which is in Canada) is subject to Canadian tax on its
    world-wide income, subject to any relief that may be provided by
    any relevant tax treaty. A non-resident corporation or
    individual that carries on a business in Canada directly or
    through a partnership is, subject to any relevant tax treaty,
    subject to tax in Canada on income attributable to its business
    (or that of the partnership&#146;s, as the case may be) carried
    on in Canada. The Canada Tax Act contains special rules that
    provide assurance to qualifying international shipping
    corporations that they will not be considered resident in Canada
    even if they are, in whole or in part, managed from Canada.
    Further, the Canada Tax Act and many of the tax treaties to
    which Canada is a party also contain special exemptions for
    profits derived from international shipping operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have entered into an agreement with Teekay Shipping Limited
    for the provision of administrative services, and certain of our
    operating subsidiaries have entered into agreements with:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Teekay Shipping Limited for the provision of advisory,
    technical, ship management and administrative services;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Teekay LNG Projects Ltd., a Canadian subsidiary of Teekay
    Shipping Corporation, for the provision of strategic advisory
    and consulting services.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the services that Teekay Shipping Limited provides to
    us and our operating subsidiaries under the services agreements
    are and will be obtained by Teekay Shipping Limited through
    subcontracts with a Canadian subsidiary of Teekay Shipping
    Corporation. The special rules in the Canada Tax Act and various
    relevant tax treaties relating to qualifying international
    shipping corporations and income from international shipping
    operations may provide relief to our operating subsidiaries to
    the extent that the services provided to them by Canadian
    entities would otherwise result in such operating subsidiaries
    being considered to be resident in Canada or to be taxable in
    Canada on income from such operations by virtue of carrying on
    business in Canada. However, such rules would not apply to us,
    as a holding limited partnership, or to our general partner or
    unitholders. While we do not believe it to be the case, if the
    arrangements we have entered into result in our being considered
    to carry on business in Canada for purposes of the Canada Tax
    Act, our unitholders would be considered to be carrying on
    business in Canada and would be required to file Canadian tax
    returns and, subject to any relief provided in any relevant
    treaty (including, in the case of U.S.&#160;Resident Holders,
    the Canada-U.S.&#160;treaty), would be subject to taxation in
    Canada on any income that is considered to be attributable to
    the business carried on by us in Canada.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that we can conduct our activities and affairs in a
    manner so that our unitholders should not be considered to be
    carrying on business in Canada solely as a consequence of the
    acquisition, holding, disposition or redemption of our common
    units. Consequently, we believe our unitholders should not be
    subject to tax filing or other tax obligations in Canada under
    the Canada Tax Act. However, although we do not intend to do so,
    there can be no assurance that the manner in which we carry on
    our activities will not change from time to time as
    circumstances dictate or warrant in a manner that may cause our
    unitholders to be carrying on business in Canada for purposes of
    the Canada Tax Act. Further, the relevant Canadian federal
    income tax law may change by legislation or judicial
    interpretation and the Canadian taxing authorities may take a
    different view than we have of the current law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is the responsibility of each unitholder to investigate the
    legal and tax consequences, under the laws of pertinent
    jurisdictions, including Canada, of an investment in us.
    Accordingly, each prospective unitholder is urged to consult,
    and depend upon, the unitholder&#146;s tax counsel or other
    advisor with regard to those matters. Further, it is the
    responsibility of each unitholder to file all state, local and
    <FONT style="white-space: nowrap">non-U.S.,</FONT> as
    well as U.S.&#160;federal tax returns, that may be required of
    the unitholder.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='172'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may sell the securities offered by this prospectus and
    applicable prospectus supplements:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    through underwriters or dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    through agents;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    directly to purchasers;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    through a combination of any such methods of sale.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If underwriters are used to sell securities, we will enter into
    an underwriting agreement or similar agreement with them at the
    time of the sale to them. In that connection, underwriters may
    receive compensation from us in the form of underwriting
    discounts or commissions and may also receive commissions from
    purchasers of the securities for whom they may act as agent. Any
    such underwriter, dealer or agent may be deemed to be an
    underwriter within the meaning of the U.S.&#160;Securities Act
    of 1933.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The applicable prospectus supplement relating to the securities
    will set forth, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the offering terms, including the name or names of any
    underwriters, dealers or agents;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the purchase price of the securities and the proceeds to us from
    such sale;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any underwriting discounts, concessions, commissions and other
    items constituting compensation to underwriters, dealers or
    agents;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any initial public offering price;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any discounts or concessions allowed or reallowed or paid by
    underwriters or dealers to other dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of debt securities, the interest rate, maturity and
    any redemption provisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of debt securities that are convertible into or
    exchangeable for other securities, the conversion or exchange
    rate and other terms, conditions and features;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any securities exchanges on which the securities may be listed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If underwriters or dealers are used in the sale, the securities
    will be acquired by the underwriters or dealers for their own
    account and may be resold from time to time in one or more
    transactions in accordance with the rules of the New York Stock
    Exchange:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at a fixed price or prices that may be changed;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at market prices prevailing at the time of sale;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at prices related to such prevailing market prices;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    at negotiated prices.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The securities may be offered to the public either through
    underwriting syndicates represented by one or more managing
    underwriters or directly by one or more of such firms. Unless
    otherwise set forth in an applicable prospectus supplement, the
    obligations of underwriters or dealers to purchase the
    securities will be subject to certain conditions precedent and
    the underwriters or dealers will be obligated to purchase all
    the securities if any are purchased. Any public offering price
    and any discounts or concessions allowed or reallowed or paid by
    underwriters or dealers to other dealers may be changed from
    time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities may be sold directly by us or through agents
    designated by us from time to time. Any agent involved in the
    offer or sale of the securities in respect of which this
    prospectus and a prospectus supplement is delivered will be
    named, and any commissions payable by us to such agent will be
    set forth, in the prospectus supplement. Unless otherwise
    indicated in the prospectus supplement, any such agent will be
    acting on a best efforts basis for the period of its appointment.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If so indicated in the prospectus supplement, we will authorize
    underwriters, dealers or agents to solicit offers from certain
    specified institutions to purchase securities from us at the
    public offering price set forth in the prospectus supplement
    pursuant to delayed delivery contracts providing for payment and
    delivery on a specified date in the future. Such contracts will
    be subject to any conditions set forth in the prospectus
    supplement and the prospectus supplement will set forth the
    commissions payable for solicitation of such contracts. The
    underwriters and other persons soliciting such contracts will
    have no responsibility for the validity or performance of any
    such contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Underwriters, dealers and agents may be entitled under
    agreements entered into with us to be indemnified by us against
    certain civil liabilities, including liabilities under the
    U.S.&#160;Securities Act of 1933, or to contribution by us to
    payments which they may be required to make. The terms and
    conditions of such indemnification will be described in an
    applicable prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Underwriters, dealers and agents may be customers of, engage in
    transactions with, or perform services for us or our affiliates
    in the ordinary course of business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any underwriters to whom securities are sold by us for public
    offering and sale may make a market in such securities, but such
    underwriters will not be obligated to do so and may discontinue
    any market making at any time without notice. No assurance can
    be given as to the liquidity of the trading market for any
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain persons participating in any offering of securities may
    engage in transactions that stabilize, maintain or otherwise
    affect the price of the securities offered. In connection with
    any such offering, the underwriters or agents, as the case may
    be, may purchase and sell securities in the open market. These
    transactions may include over-allotment and stabilizing
    transactions and purchases to cover syndicate short positions
    created in connection with the offering. Stabilizing
    transactions consist of certain bids or purchases for the
    purpose of preventing or retarding a decline in the market price
    of the securities and syndicate short positions involve the sale
    by the underwriters or agents, as the case may be, of a greater
    number of securities than they are required to purchase from us
    in the offering. The underwriters may also impose a penalty bid,
    whereby selling concessions allowed to syndicate members or
    other broker-dealers for the securities sold for their account
    may be reclaimed by the syndicate if such securities are
    repurchased by the syndicate in stabilizing or covering
    transactions. These activities may stabilize, maintain or
    otherwise affect the market price of the securities, which may
    be higher than the price that might otherwise prevail in the
    open market, and if commenced, may be discontinued at any time.
    These transactions may be effected on the New York Stock
    Exchange, in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    market or otherwise. These activities will be described in more
    detail in the applicable prospectus supplement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    78
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='173'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SERVICE
    OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Teekay LNG Partners L.P. is organized under the laws of the
    Marshall Islands as a limited partnership. Our general partner
    is organized under the laws of the Marshall Islands as a limited
    liability company. The Marshall Islands has a less developed
    body of securities laws as compared to the United States and
    provides protections for investors to a significantly lesser
    extent. Teekay LNG Finance Corp. and some of the Subsidiary
    Guarantors are also incorporated or organized under the laws of
    the Marshall Islands. Other Subsidiary Guarantors are organized
    under the laws of Spain and Luxembourg.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Most of the directors and officers of our general partner and
    those of our subsidiaries are residents of countries other than
    the United States. Substantially all of our and our
    subsidiaries&#146; assets and a substantial portion of the
    assets of the directors and officers of our general partner are
    located outside the United States. As a result, it may be
    difficult or impossible for United States investors to effect
    service of process within the United States upon us, our general
    partner, our subsidiaries or the directors and officers of our
    general partner or to realize against us or them judgments
    obtained in United States courts, including judgments predicated
    upon the civil liability provisions of the securities laws of
    the United States or any state in the United States. However,
    we, Teekay LNG Finance Corp. and the Subsidiary Guarantors have
    expressly submitted to the jurisdiction of the U.S.&#160;federal
    and New York state courts sitting in the City of New York for
    the purpose of any suit, action or proceeding arising under the
    securities laws of the United States or any state in the United
    States, and we have appointed Watson, Farley&#160;&#038;
    Williams (New York) LLP to accept service of process on our
    behalf in any such action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Watson, Farley&#160;&#038; Williams (New York) LLP, our counsel
    as to Marshall Islands law, Noble&#160;&#038; Schneidecker, our
    counsel as to Luxembourg law and Ur&#237;a, Men&#233;ndez y
    CIA., Abogados, S.C., our counsel as to Spanish law, have
    advised us that there is uncertainty as to whether the courts of
    the Marshall Islands, Luxembourg and Spain, respectively, would
    (1)&#160;recognize or enforce against us, our general partner,
    Teekay LNG Finance Corp., the Subsidiary Guarantors or the
    directors, officers, managers or partners of such entities
    judgments of courts of the United States based on civil
    liability provisions of applicable U.S.&#160;federal and state
    securities laws or (2)&#160;impose liabilities against us, such
    other entities or the directors, officers, managers or partners
    of such entities in original actions brought in the Marshall
    Islands, Luxembourg or Spain based on these respective laws.
</DIV>
<A name='174'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise stated in the applicable prospectus supplement,
    (a)&#160;the validity of the securities and certain other legal
    matters with respect to the laws of The Republic of the Marshall
    Islands will be passed upon for us by our counsel as to Marshall
    Islands law, Watson, Farley&#160;&#038; Williams (New York) LLP,
    (b)&#160;the validity of the debt securities under New York law
    and certain other legal matters will be passed upon for us by
    Perkins Coie LLP, which may rely on the opinions of Watson,
    Farley&#160;&#038; Williams (New York) LLP for all matters of
    Marshall Islands law, (c)&#160;the validity of the guarantee of
    Teekay Luxembourg S.a.r.l. under Luxembourg law will be passed
    upon for us by Noble&#160;&#038; Schneidecker and (d)&#160;the
    validity of guarantees of certain other Subsidiary Guarantors
    under the laws of Spain will be passed upon for us by Ur&#237;a,
    Men&#233;ndez y CIA., Abogados, S.C. Any underwriter will be
    advised about other issues relating to any offering by its own
    legal counsel.
</DIV>
<A name='175'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The financial statements incorporated in this prospectus by
    reference to Teekay LNG Partners&#146; Annual Report on
    <FONT style="white-space: nowrap">Form&#160;20-F</FONT>
    for the year ended December&#160;31, 2005 have been so
    incorporated in reliance on the report of Ernst&#160;&#038;
    Young LLP, an independent registered public accounting firm,
    given on the authority of such firm as experts in auditing and
    accounting. You may contact Ernst&#160;&#038; Young LLP at
    700&#160;West Georgia Street, Vancouver, British Columbia, V7Y
    1C7, Canada.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='176'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth costs and expenses, other than
    any underwriting discounts and commissions, we expect to incur
    in connection with the issuance and distribution of the
    securities covered by this prospectus. All amounts are estimated
    except the SEC registration fee.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="7%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    U.S.&#160;Securities and Exchange Commission registration fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    $42,800
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NASD filing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Rating agency fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer agent fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Trustee fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    *
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    $&#160;&#160;&#160;&#160;&#160;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    *&#160;</TD>
    <TD align="left">
    To be provided in a prospectus supplement or in a Report on
    <FONT style="white-space: nowrap">Form&#160;6-K</FONT>
    subsequently incorporated by reference into this prospectus.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    80
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="o40020o4002099.gif" alt="(TEEKAY LNG PARTNERS L.P. LOGO)">
</DIV>

<DIV style="margin-top: 30pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 24pt">Teekay LNG Partners
    L.P.</FONT></B>
</DIV>
<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV>
<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">5,000,000
    Common Units</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Representing Limited Partner
    Interests</FONT></B>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=72 -->
<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">PROSPECTUS SUPPLEMENT</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">April&#160;&#160;&#160;,
    2008</FONT></B>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=72 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Citi</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Wachovia Securities</FONT></B>
</DIV>
<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=72 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">UBS
    Investment Bank</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Raymond James</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Deutsche Bank
    Securities</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Dahlman Rose&#160;&#038;
    Company</FONT></B>
</DIV>

<DIV style="margin-top: 30pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>o40020o4002099.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 o40020o4002099.gif
M1TE&.#EAM`!/`-4@`,#`P("`@)>7ET!`0&)B8N#@X&!@8!`0$/#P\//S\]#0
MT#L[.W!P<*"@H"`@(,O+R]C8V#`P,+Z^OI"0D+"PL.;FYHJ*BE!04$A(2*2D
MI%555;&QL7U]?2XN+B\O+P```/___P``````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````````````````````"'Y!`$``"``+`````"T`$\```;_
M0$)G2"P:C\BD<GF$6)C0(@1$K5JOV*QVR^UZN<*H>$SN"![EI>#+;KO?['!Z
M3B<D,/0C`<[O^[UR'H*#A(6&AXB)AT0+%1Q%BHF,"7^5EGZ!D9J;G$49$I"<
MA$42EZ:G7YFBJZQ%=@M$K()%%JBVMU>JLKN*DPRAK4,8E+C%J+J\R:-$$AG`
MJU+&TJ;(RLE%#!6P0[M%:]/@?]76W4,+"7(=LD4:X>Y]X^30S`+/HHP5[_IN
M\?*;11P@V.M$),.^@ZEB^2O789B&@9JP(9P(1N'">4,>/+&(\1S%CUCZ75Q$
MQ`(:CO>8@5Q91>3(0D0P5,##;5U)ECA=OIQ%Y,$O_Y0$&Q+#"5+G2V^@@/XC
M,H7H2J,7V278IL[FD&].B]*QB@1".J[MLC[=&@R)`&=*(YK+)U;K'*ZNM*6-
MY*FM72YS)66\\C`O(HEW`V/Q2[+#`ROU"!?V*+@Q%<4P]U(1"#GRD%*.'5<>
MU)-*@KXUR^[)K#ET2L-4-IK&V*$IZ<";>:(^N5KT:\&Q/?2\D]MRAPVW[^;N
M^;.V5<;!LPX?HKJJ-5K)Q2XWLC!:=*+3(5X;,OHZR^S&E14![GTE^)V3RH,\
M?_2F>HK9=\IN_7[B=/F<N=='>!^_;B+D[??.<O[EUP%R`H(S7($&=E!+@N'T
MQF"#KD%HC(3S;-=!=Q86@__A:;R,U^&%X56'87HCWO*A6MJQ:$:**I8H#Q(A
M$L$6C*:LV`L1H#EG&XXYRB@>$0)0)J1>EP%YB8Z%=1!68D?^)<Q02O;!I"'6
M@=`C0R]6Z<>5RPQA4!5R1=GDC5Z^`>9\'%*!EIE8ZI<F'&O^=R":+;6X8Y)S
MNK%F75E,)6%,5/;911Y1,,!%4H@2:2@;C2Z!8!;%18KGHUE$J@1F7`BJ:9N8
M8B'`J*26:NJIJ)8ZIA</I.KJJX6&*NNLM-9JZZVXYJKKKKSVZNNOP`8K[+"Y
M`F"LL06`4,"Q`"```@+,)@L"``HH2VT5"@`@;;;.0EOM%=E:`2T`SVJ+[004
M.(O_Q;+(6I'MM^6V2P6SYGI;KK3,?INML5<`$`"Y62RK[KK'#LS'!P@C'``(
M`23\`;D`.+PP"!\,`$($'U!0!<(6,_R!H@Q\,+$5`WQ@1<0?+"LR%1,D?(#!
M5#2<\,@8'U`%R@I3X?#***L\L<,=EXSP`=(:D/`%630,,!8R(]R`'P$8[<"_
M'@\00`#)1FPUU10/T#+2\R9,!0('O%PVS""4?#+"!D0\L0,?-%#R!$Q_8$`#
M!YC\;,+XVHVWWE=_,#7$"#/@MLXB!_!TV@\;;8#.!P"`\=)5**U%PW=_8+,?
M6E>^\LV?;QS!V9YC_*W1)3^.A=J@(TS!YX)/.\#B5C2\_W#)U;Z>]^*'X[YQ
MQ],._?K/>E>A=N<41UZ`M%=8GO3*&/^!O,<Y!\_QQFR3_$'+="O+=Q:LAYUW
MR3\/P"[SG@]@].8AMZRZUA=H;D7%H.<=/_$(&R\RW!.'_,$%:/,8Y6I7,:E)
MCWXQ$]SLPN:``2@*<0ACW@<B4(#_5<%Q6@A?\!B0-]A9K7H$1)@#-'8QDQW`
M`6%+&.40&#RC58]CP!-:Q0;6`+B]K&X#]!S"(@`O/DS/=FL;&>0P:+VA>4Z(
MV@NB_WX6`0`8#8D>$R("=I8UD<6/=ET#7=1>6#PJE*R"*(P7`C"&Q03F,(%0
M]"$+,=>NB+7-7%VK8,I`T+((#'L`;M\"(O@>=BVWR7%B>:/`_>HFQ-<U$&Y/
M<]OK@)?%L&&-B\;ZEMI*IC$%"*X`\2,A`2=P+88M3H_*4IP:@=<TGDE,9Q;#
M8/RJQ3TT9C!A%CO<$ZG@/Q`>T0HA2^3'@K<PN$D0>+V#'2R]:+(&(-"%FD-;
*TSJ&0%!J+0@`.S\_
`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
