Document:

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                                                                    EXHIBIT 10.4

                    FORM OF ADMINISTRATIVE SERVICES AGREEMENT

THIS AGREEMENT made effective the ____ day of December 2006;

BY AND BETWEEN:

      TEEKAY OFFSHORE OPERATING PARTNERS L.P., a limited partnership duly
      organized and existing under the laws of the Marshall Islands with its
      registered office at Bayside House, Bayside Executive Park, West Bay
      Street & Blake Road, P.O. Box AP-59213, Nassau, The Bahamas.

      ("TKLP")

AND:

      TEEKAY SHIPPING LIMITED, a Bahamas company with its registered office at
      Bayside House, Bayside Executive Park, West Bay Street & Blake Road, P.O.
      Box AP-59212, Nassau, The Bahamas

      ("TK Bahamas")

WHEREAS:

      A.    TKLP, a limited partnership whose units are listed and will trade on
            the New York Stock Exchange, requires certain non-strategic
            administrative and clerical services; and

      B.    TKLP wishes to engage TK Bahamas to provide such non-strategic
            administrative and clerical services to TKLP on the terms set out
            herein;

NOW THEREFORE, the parties agree that, in consideration of the fees set forth in
Schedule "B" to this Agreement (the "Fees") and subject to the Terms and
Conditions attached hereto, TK Bahamas shall provide the non-strategic
administrative and clerical services set forth in Schedule "A" to this Agreement
(the "Services").

IN WITNESS WHEREOF the Parties have executed this Agreement by their duly
authorized signatories with effect on the date first above written.

TEEKAY OFFSHORE OPERATING                       TEEKAY SHIPPING LIMITED
PARTNERS L.P. BY ITS GENERAL PARTNER
TEEKAY OFFSHORE OPERATING GP L.L.C.

By: __________________________                  By: __________________________
Name:                                           Name:
Title:                                          Title:

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                              TERMS AND CONDITIONS

1.    DEFINITIONS

In this Agreement: the term:

"Change of Control" means with respect to any entity, an event in which
securities of any class entitling the holders thereof to elect a majority of the
members of the board of directors or other similar governing body of the entity
are acquired, directly or indirectly, by a person who did not immediately before
such acquisition own securities of the entity entitling such person to elect
such majority (and for the purpose of this definition, any such securities held
by another person who is related to such person shall be deemed to be owned by
such person);

"Limited Partnership Agreement" means the amended and restated agreement of
limited partnership of TKLP dated as of [DATE], as from time to time amended;

"TKGP" means Teekay GP L.L.C., a Marshall Islands limited liability company that
is the general partner of TKLP;

"TKLP Group" means TKLP, TKGP and subsidiaries of TKLP; and

"Unitholders" means holders of limited partnership units in TKLP.

2.    GENERAL

TK Bahamas shall provide all or such portion of the Services, in a commercially
reasonable manner, as TKLP, may from time to time reasonably request or direct,
all under the supervision of TKLP, as represented by TKGP in its capacity as the
general partner of TKLP.

3.    COVENANTS

During the term of this Agreement TK Bahamas shall:

(a)   diligently provide or subcontract for the provision of (in accordance with
      Section 18 hereof) the Services to TKLP (unless the provision of such
      Services would materially interfere with Teekay Shipping Corporation's
      operations) as an independent contractor, and be responsible to TKLP for
      the due and proper performance of same;

(b)   retain at all times a qualified staff so as to maintain a level of
      expertise sufficient to provide the Services; and

(c)   keep full and proper books, records and accounts showing clearly all
      transactions relating to its provision of Services in accordance with
      established general commercial practices and in accordance with United
      States generally accepted accounting principles, and allow TKLP and its
      representatives to audit and examine such books, records and accounts at
      any time during customary business hours.

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4.    NON-EXCLUSIVITY

TK Bahamas and its employees may provide services of a nature similar to the
Services to any other person. There is no obligation for TK Bahamas to provide
the Services to TKLP on an exclusive basis.

5.    CONFIDENTIAL INFORMATION

TK Bahamas shall be obligated to keep confidential, both during and after the
term of this Agreement, all information it has acquired or developed in the
course of providing Services under this Agreement. TKLP shall be entitled to any
equitable remedy available at law or equity, including specific performance,
against a breach by TK Bahamas of this obligation. TK Bahamas shall not resist
such application for relief on the basis that TKLP has an adequate remedy at
law, and TK Bahamas shall waive any requirement for the securing or posting of
any bond in connection with such remedy.

6.    SERVICE FEE

In consideration for TK Bahamas providing the Services, TKLP shall pay TK
Bahamas the Fees as determined and by installments as set out in Schedule "B" to
this Agreement.

7.    GENERAL RELATIONSHIP BETWEEN THE PARTIES

The relationship between the parties is that of independent contractor. The
parties to this Agreement do not intend, and nothing herein shall be interpreted
so as, to create a partnership, joint venture, employee or agency relationship
between TK Bahamas and any one or more of TKLP, TKGP in its capacity as general
partner on behalf of TKLP or any member of the TKLP Group.

8.    INDEMNITY

TKLP shall indemnify and hold harmless TK Bahamas and its employees and agents
against all actions, proceedings, claims, demands or liabilities which may be
brought against them due to this Agreement including, without limitation, all
actions, proceedings, claims, demands or liabilities brought under the
environmental laws of any jurisdiction, and against and in respect of all costs
and expenses (including legal costs and expenses on a full indemnity basis) they
may suffer or incur due to defending or settling same, provided however that
such indemnity shall exclude any or all losses, actions, proceedings, claims,
demands, costs, damages, expenses and liabilities whatsoever which may be caused
by or due to the gross negligence or willful misconduct of TK Bahamas or its
employees or agents.

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9.    TERM AND TERMINATION

This Agreement shall commence as of the date first above written and shall
continue for successive one year terms unless terminated by either party hereto
on not less than sixty (60) days notice. A party may at any time terminate this
Agreement forthwith if:

(a)   in the case of TKLP, there is a Change of Control of TK Bahamas and in the
      case of TK Bahamas, if there is a Change of Control of TKGP ;

(b)   the other party breaches this Agreement;

(c)   a receiver is appointed for all or substantially all of the property of
      the other party;

(d)   an order is made to wind-up the other party;

(e)   a final judgment, order or decree which materially and adversely affects
      the ability of the other party to perform this Agreement shall have been
      obtained or entered against that party and such judgment, order or decree
      shall not have been vacated, discharged or stayed; or

(f)   the other party makes a general assignment for the benefit of its
      creditors, files a petition in bankruptcy or for liquidation, is adjudged
      insolvent or bankrupt, commences any proceeding for a reorganization or
      arrangement of debts, dissolution or liquidation under any law or statute
      or of any jurisdiction applicable thereto or if any such proceeding shall
      be commenced.

10.   FEES UPON TERMINATION

Upon termination of this Agreement, the Fee shall be adjusted as at the
effective date of termination. Any overpayment shall forthwith be refunded to
TKLP and any underpayment shall forthwith be paid to TK Bahamas.

11.   SURRENDER OF BOOKS AND RECORDS

Upon termination of this Agreement, TK Bahamas shall forthwith surrender to TKLP
any and all books, records, documents and other property in the possession or
control of TK Bahamas relating to this Agreement and to the business, finance,
technology, trademarks or affairs of TKLP and any member of the TKLP Group and,
except as required by law, shall not retain any copies of same.

12.   FORCE MAJEURE

Neither party shall be liable for any failure to perform this Agreement due to
any cause beyond its reasonable control.

13.   ENTIRE AGREEMENT

This Agreement forms the entire agreement between the parties with respect to
the subject matter hereof and supersedes and replaces all previous agreements,
written or oral, with respect to the subject matter hereof.

14.   SEVERABILITY

If any provision herein is held to be void or unenforceable, the validity and
enforceability of the remaining provisions herein shall remain unaffected and
enforceable.

15.   CURRENCY

Unless stated otherwise, all currency references herein are to United States
Dollars.

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16.   LAW AND ARBITRATION

This Agreement shall be governed by the laws of The Bahamas. Any dispute under
this Agreement shall be put to arbitration in The Bahamas, a jurisdiction to
which the parties hereby irrevocably submit.

17.   NOTICE

Notice under this Agreement shall be given (via hand delivery or facsimile) as
follows:

     If to TKLP:
     Bayside House
     Bayside Executive Park
     West Bay Street & Blake Road
     P.O. Box AP-59212
     Nassau
     The Bahamas
     Attn: Teekay Offshore GP L.L.C., as represented by its Director

     Fax: +1 242 502 8840

     If to TK Bahamas:
     Bayside House
     Bayside Executive Park
     West Bay Street & Blake Road
     P.O. Box AP-59212
     Nassau
     The Bahamas
     Attn: Director
     Fax: +1 242 502 8840

18.   SUBCONTRACTING AND ASSIGNMENT

TK Bahamas shall not assign, sub-contract or sub-license or assign this
Agreement to any party that is not a subsidiary or affiliate of Teekay Shipping
Corporation except upon written consent of TKLP.

19.   WAIVER

The failure of either party to enforce any term of this Agreement shall not act
as a waiver. Any waiver must be specifically stated as such in writing.

20.   AFFILIATES

This Agreement shall be binding upon and inure to the benefit of the affiliates
of TKLP and/or TK Bahamas.

21.   COUNTERPARTS

This Agreement may be executed in one or more signed counterparts, facsimile or
otherwise, which shall together form one instrument.

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                                   SCHEDULE A

                                    SERVICES

TK Bahamas shall provide such of the following non-strategic administrative and
clerical services (the "Services") to TKLP, as TKGP may from time to time
request and direct TK Bahamas to provide pursuant to Section 2:

      (a)   Keep and maintain at all times books, records and accounts which
            shall contain particulars of receipts and disbursements relating to
            the assets and liabilities of TKLP and such books, records and
            accounts shall be kept pursuant to normal commercial practices that
            will permit TKLP to prepare or cause to be prepared financial
            statements in accordance with US generally accepted accounting
            principles and in each case shall also be in accordance with those
            required to be kept by TKLP under applicable securities legislation
            in the US and as TKLP is required under the US Internal Revenue Code
            of 1986 and the regulations applicable with respect thereto, all as
            amended from time to time;

      (b)   Prepare all such returns, filings and documents, for review and
            approval by TKLP as may be required under the Limited Partnership
            Agreement together with such other returns, filings, documents and
            instruments as may from time to time be requested or instructed by
            TKLP;

      (c)   Provide, or arrange for the provision of, advisory services to TKLP
            with respect to TKLP's obligations under applicable securities
            legislation in the US and assist TKLP in arranging for compliance
            with continuous disclosure obligations under applicable securities
            legislation including the preparation for review, approval and
            filing by TKLP of reports and other documents with all applicable
            regulatory authorities, providing that nothing herein shall permit
            or authorize TK Bahamas to act for or on behalf of TKLP in its
            relationship with regulatory authorities except to the extent that
            specific authorization may from time to time be given by TKLP;

      (d)   Provide advisory and clerical services to assist and support TKLP in
            its communications with its Unitholders, as TKLP may from time to
            time request or direct, provided that nothing herein shall permit or
            authorize TK Bahamas to determine the content of any such
            communications by TKLP to its Unitholders;

      (e)   At the request and under the direction of TKLP, handle all
            administrative and clerical matters in respect of (i) the call and
            arrangement of all annual and/or special meetings of the Unitholders
            pursuant to the Limited Partnership Agreement, (ii) the preparation
            of all materials (including notices of meetings and information
            circulars) in respect thereof and (iii) the submission of all such
            materials to TKLP in sufficient time prior to the dates upon which
            they must be mailed, filed or otherwise relied upon so that TKLP has
            full opportunity to review them, approve them, execute them and
            return them to TK Bahamas for filing or mailing or other disposition
            as TKLP may require or direct;

      (f)   Provide or secure sufficient and necessary office space, equipment
            and personnel including all accounting, clerical, secretarial,
            corporate and administrative services as may be reasonably necessary
            for the performance of the Services;

      (f)   Arrange for the provision of such audit, accounting, engineering,
            legal, insurance and other professional services as are reasonably
            required by TKLP from time to time in connection with the discharge
            of its responsibilities under the Limited Partnership Agreement, to
            the extent such advice and analysis can be reasonably provided or
            arranged by TK Bahamas, provided that nothing herein shall permit TK
            Bahamas to select the auditor of TKLP, which shall be selected in
            accordance with the provisions for the appointment of the auditor
            pursuant to the Limited Partnership Agreement or as otherwise be
            required by law governing TKLP, or to communicate with the auditor
            other than in the ordinary course of making such books and records
            available for review as the auditors may require and to respond to
            queries from the auditors with respect to the accounts and
            statements prepared by, or arranged by, TK Bahamas, and in
            particular TK Bahamas will not have any of the authorities, rights
            or responsibilities of the audit committee of TKGP, but shall
            provide information to such committee as may from time to time be
            required or requested; and provided further that nothing herein
            shall entitled TK Bahamas to retain legal counsel for TKLP unless
            such selection is specifically approved by TKGP;

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      (g)   Provide such assistance and support as TKLP may from time to time
            request in connection with any new or existing financing for TKLP,
            such assistance and support to be provided in accordance with the
            direction, and under the supervision of TKLP, as represented by TKGP
            in its capacity as the general partner of TKLP;

      (h)   Provide such administrative and clerical services as may be required
            by TKLP to support and assist TKLP in considering any future
            acquisitions or divestments of assets of TKLP, all under the
            direction and under the supervision of TKLP, as represented by TKGP
            in its capacity as the general partner of TKLP ;

      (i)   Provide such support and assistance to TKLP as TKLP may from time to
            time request in connection with any future offerings of Units that
            TKLP may at any time determine is desirable for TKLP, all under the
            direction and supervision of TKLP, as represented by TKGP, in its
            capacity as the general partner of TKLP;

      (j)   Provide, at the request and under the direction of TKLP, such
            communications to the transfer agent for TKLP as may be necessary or
            desirable;

      (k)   Prepare and provide regular cash reports and other accounting
            information for review by TKLP, so as to permit and enable TKLP to
            make all determinations of financial matters required to be made
            pursuant to the Limited Partnership Agreement, including the
            determination of amounts available for distribution by TKLP to its
            Unitholders, and to assist TKLP in making arrangements with the
            transfer agent for TKLP for the payment of distributions to the
            Unitholders in accordance with the Limited Partnership Agreement;

      (l)   Provide such assistance to TKLP as TKLP may request or direct with
            respect to the performance of the obligations to the Unitholders
            under the Limited Partnership Agreement and to provide monitoring of
            various obligations and rights under agreements entered into by TKLP
            and provide advance reports on a timely basis to TKLP advising of
            steps, procedures and compliance issues under such agreements, so as
            to enable TKLP, through its general partner to make all such
            decisions as would be necessary or desirable thereunder; and

      (m)   Provide such additional administrative and clerical services
            pertaining to TKLP, the assets and liabilities of TKLP and the
            Unitholders and matters incidental thereto as may be reasonably
            requested by TKLP from time to time.

      TK Bahamas shall provide quarterly reports to TKLP outlining the nature
      and details of the foregoing services that have been provided.

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                                   SCHEDULE B

                                      FEES

In consideration for the provision of services by TK Bahamas to TKLP, TKLP shall
pay TK Bahamas an annual Fee for each calendar year during the term of this
Agreement divided into twelve (12) equal monthly installments payable in advance
and which is equal to the annual aggregate amount of such costs and expenses
(the "Costs and Expenses") as TK Bahamas may reasonably incur in connection with
the provision of the Services plus a reasonable profit mark-up to be agreed upon
and reviewed annually by the parties and which shall be consistent with the
Organization for Economic Development's guidelines for transfer pricing levels
as well as local rules and regulations.

In respect of each calendar year during the term of this Agreement, TK Bahamas
shall prepare an estimate of the Costs and Expenses it reasonably expects to
incur during such year and shall submit such estimate to TKLP within ten (10)
Bahamian banking days of the last day of the immediately preceding year.

The calculation of TK Bahamas' aforesaid estimated Costs and Expenses may be
adjusted from time to time by agreement between the parties, and the Fee payable
by TKLP shall be re-calculated accordingly.

Within sixty (60) Bahamian banking days (or such longer period as the parties
shall agree) after the end of each year, TK Bahamas shall submit to TKLP an
accounting of the Costs and Expenses it has incurred in that year (the "actual
Costs and Expenses").

Ten (10) Bahamian banking days (or such longer period as the parties shall
agree) after the date on which TK Bahamas delivers such accounting of its actual
Costs and Expenses:

            (a)   where the aggregate of all Fees paid in the relevant year is
                  less than the agreed mark-up of the actual Costs and Expenses,
                  TKLP shall pay an Adjustment to TK Bahamas; and

            (b)   where the aggregate of all Fees paid in the relevant year is
                  greater than the agreed mark-up of the actual Costs and
                  Expenses, TK Bahamas shall pay an Adjustment to TKLP.

Where the aggregate of all Fees paid in a year is equal to the agreed mark-up of
the actual Costs and Expenses, no Adjustment is payable.

For the purposes hereof "ADJUSTMENT" means a payment (made in accordance with
the foregoing) in the amount of the difference between the aggregate of all Fees
paid in a year and the agreed mark-up of the actual Costs and Expenses incurred
in that year.

                                       8<PAGE>

                                                                    EXHIBIT 10.5

            ADVISORY, TECHNICAL AND ADMINISTRATIVE SERVICES AGREEMENT

THIS AGREEMENT made effective the ____ day of December 2006;

BY AND BETWEEN:

     [OPCO OPERATING SUBSIDIARY],
     (together with its subsidiaries,"Operating Sub")

AND:

      TEEKAY SHIPPING LIMITED, a Bahamas company with its registered office at
      Bayside House, Bayside Executive Park, West Bay Street & Blake Road, P.O.
      Box AP-59212, Nassau, The Bahamas

     ("TK Bahamas")

WHEREAS:

      A.    Operating Sub operates vessels, requires certain advisory, technical
            and administrative services to supplement the existing capabilities
            of its employees; and

      B.    Operating Sub wishes to engage TK Bahamas to provide such advisory,
            technical and administrative services to Operating Sub on the terms
            set out herein;

NOW THEREFORE, the parties agree that, in consideration of the fees set forth in
Schedule "B" to this Agreement (the "Fees") and subject to the Terms and
Conditions attached hereto, TK Bahamas shall provide the advisory, technical and
administrative services set forth in Schedule "A" to this Agreement (the
"Services").

IN WITNESS WHEREOF the Parties have executed this Agreement by their duly
authorized signatories with effect on the date first above written.

[OPERATING SUB]                                      TEEKAY SHIPPING LIMITED

By: __________________________                       By: ______________________
Name:                                                Name:
Title:                                               Title:

<PAGE>

                              TERMS AND CONDITIONS

1.    DEFINITIONS

In this Agreement: the term "Change of Control" means with respect to any
entity, an event in which securities of any class entitling the holders thereof
to elect a majority of the members of the board of directors or other similar
governing body of the entity are acquired, directly or indirectly, by a person
who did not immediately before such acquisition own securities of the entity
entitling such person to elect such majority (and for the purpose of this
definition, any such securities held by another person who is related to such
person shall be deemed to be owned by such person);

2.    GENERAL

TK Bahamas shall provide all or such portion of the Services, in a commercially
reasonable manner, as OPERATING SUB, may from time to time reasonably request or
direct.

3.    COVENANTS

During the term of this Agreement TK Bahamas shall:

(a)   diligently provide or subcontract for the provision of (in accordance with
      Section 18 hereof) the Services to OPERATING SUB (unless the provision of
      such Services would materially interfere with Teekay Shipping
      Corporation's operations) as an independent contractor, and be responsible
      to OPERATING SUB for the due and proper performance of same;

(b)   retain at all times a qualified staff so as to maintain a level of
      expertise sufficient to provide the Services; and

(c)   keep full and proper books, records and accounts showing clearly all
      transactions relating to its provision of Services in accordance with
      established general commercial practices and in accordance with United
      States generally accepted accounting principles, and allow OPERATING SUB
      and its representatives to audit and examine such books, records and
      accounts at any time during customary business hours.

4.    NON-EXCLUSIVITY

TK Bahamas and its employees may provide services of a nature similar to the
Services to any other person. There is no obligation for TK Bahamas to provide
the Services to OPERATING SUB on an exclusive basis.

5.    CONFIDENTIAL INFORMATION

TK Bahamas shall be obligated to keep confidential, both during and after the
term of this Agreement, all information it has acquired or developed in the
course of providing Services under this Agreement. OPERATING SUB shall be
entitled to any equitable remedy available at law or equity, including specific
performance, against a breach by TK Bahamas of this obligation. TK Bahamas shall
not resist such application for relief on the basis that OPERATING SUB has an
adequate remedy at law, and TK Bahamas shall waive any requirement for the
securing or posting of any bond in connection with such remedy.

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<PAGE>

6.    SERVICE FEE

In consideration for TK Bahamas providing the Services, OPERATING SUB shall pay
TK Bahamas the Fees as determined and by installments as set out in Schedule "B"
to this Agreement.

7.    GENERAL RELATIONSHIP BETWEEN THE PARTIES

The relationship between the parties is that of independent contractor. The
parties to this Agreement do not intend, and nothing herein shall be interpreted
so as, to create a partnership, joint venture, employee or agency relationship
between TK Bahamas and OPERATING SUB.

8.    INDEMNITY

OPERATING SUB shall indemnify and hold harmless TK Bahamas and its employees and
agents against all actions, proceedings, claims, demands or liabilities which
may be brought against them due to this Agreement including, without limitation,
all actions, proceedings, claims, demands or liabilities brought under the
environmental laws of any jurisdiction, and against and in respect of all costs
and expenses (including legal costs and expenses on a full indemnity basis) they
may suffer or incur due to defending or settling same, provided however that
such indemnity shall exclude any or all losses, actions, proceedings, claims,
demands, costs, damages, expenses and liabilities whatsoever which may be caused
by or due to the gross negligence or willful misconduct of TK Bahamas or its
employees or agents.

9.    TERM AND TERMINATION

This Agreement shall commence as of the date first above written and shall
continue for successive one year terms unless terminated by either party hereto
on not less than sixty (60) days notice. A party may at any time terminate this
Agreement forthwith if:

(a)   in the case of OPERATING SUB, there is a Change of Control of TK Bahamas
      and in the case of TK Bahamas, if there is a Change of Control of
      Operating Sub;

(b)   the other party breaches this Agreement;

(c)   a receiver is appointed for all or substantially all of the property of
      the other party;

(d)   an order is made to wind-up the other party;

(e)   a final judgment, order or decree which materially and adversely affects
      the ability of the other party to perform this Agreement shall have been
      obtained or entered against that party and such judgment, order or decree
      shall not have been vacated, discharged or stayed; or

(f)   the other party makes a general assignment for the benefit of its
      creditors, files a petition in bankruptcy or for liquidation, is adjudged
      insolvent or bankrupt, commences any proceeding for a reorganization or
      arrangement of debts, dissolution or liquidation under any law or statute
      or of any jurisdiction applicable thereto or if any such proceeding shall
      be commenced.

10.   FEES UPON TERMINATION

Upon termination of this Agreement, the Fee shall be adjusted as at the
effective date of termination. Any overpayment shall forthwith be refunded to
OPERATING SUB and any underpayment shall forthwith be paid to TK Bahamas.

11.   SURRENDER OF BOOKS AND RECORDS

Upon termination of this Agreement, TK Bahamas shall forthwith surrender to
OPERATING SUB any and all books, records, documents and other property in the
possession or control of TK Bahamas relating to this Agreement and to the

                                       3
<PAGE>

business, finance, technology, trademarks or affairs of OPERATING SUB and any
member of the OPERATING SUB Group and, except as required by law, shall not
retain any copies of same.

12.   FORCE MAJEURE

Neither party shall be liable for any failure to perform this Agreement due to
any cause beyond its reasonable control.

13.   ENTIRE AGREEMENT

This Agreement forms the entire agreement between the parties with respect to
the subject matter hereof and supersedes and replaces all previous agreements,
written or oral, with respect to the subject matter hereof.

14.   SEVERABILITY

If any provision herein is held to be void or unenforceable, the validity and
enforceability of the remaining provisions herein shall remain unaffected and
enforceable.

15.   CURRENCY

Unless stated otherwise, all currency references herein are to United States
Dollars.

16.   LAW AND ARBITRATION

This Agreement shall be governed by the laws of The Bahamas. Any dispute under
this Agreement shall be put to arbitration in The Bahamas, a jurisdiction to
which the parties hereby irrevocably submit.

17.   NOTICE

Notice under this Agreement shall be given (via hand delivery or facsimile) as
follows:

     If to OPERATING SUB:
     [Address]
     Attn:

     If to TK Bahamas:
     TK House
     Bayside Executive Park
     West Bay Street & Blake Road
     P.O. Box AP-59212
     Nassau
     The Bahamas
     Attn: Director
     Fax: +1 242 502 8840

18.   SUBCONTRACTING AND ASSIGNMENT

TK Bahamas shall not assign, sub-contract or sub-license or assign this
Agreement to any party that is not a subsidiary or affiliate of Teekay Shipping
Corporation except upon written consent of OPERATING SUB.

19.   WAIVER

The failure of either party to enforce any term of this Agreement shall not act
as a waiver. Any waiver must be specifically stated as such in writing.

                                       4
<PAGE>

20.   AFFILIATES

This Agreement shall be binding upon and inure to the benefit of the affiliates
of OPERATING SUB and/or TK Bahamas.

21.   COUNTERPARTS

This Agreement may be executed in one or more signed counterparts, facsimile or
otherwise, which shall together form one instrument.

                                       5
<PAGE>

                                   SCHEDULE A

                                    SERVICES

TK Bahamas shall provide such of the following advisory, technical and
administrative services (the "Services") to OPERATING SUB, as OPERATING SUB may
from time to time reasonably request and direct TK Bahamas to provide pursuant
to Section 2:

1.    negotiating loan and credit terms with lenders and monitoring and
      maintaining compliance therewith;

2.    negotiating and arranging for interest rate swap agreements, foreign
      currency contracts and forward exchange contracts;

3.    cash management, including arranging for the deposit of funds;

4.    monitoring the performance of investment managers;

5.    exercising of due diligence to:

      (a)   maintain and preserve each Vessel and her equipment in good
            condition, running order and repair, so that each Vessel shall be,
            insofar as due diligence can make her so, tight, staunch, strong and
            well and sufficiently tackled, appareled, furnished, equipped and in
            every respect seaworthy and in good operating condition; and

      (b)   keep each Vessel in such condition as will entitle her to the
            highest classification and rating from the classification society
            chosen by her owner or disponent owner for vessels of the class, age
            and type;

6.    handling of each Vessel while in ports or transiting canals either
      directly or by use of vessel agents;

7.    storing, victualing and supplying of each Vessel and the arranging for the
      purchase of certain stores, supplies and parts;

8.    procuring and arrangement for port entrance and clearance, pilots, vessel
      agents, consular approvals, and other services necessary or desirable for
      the management and safe operation of each Vessel;

9.    preparing, issuing or causing to be issued to shippers the customary
      freight contract, cargo receipts and/or bills of lading;

10.   performance of all usual and customary duties concerned with the loading
      and discharging of cargoes at all ports;

11.   naming of vessel agents for the transaction of each Vessel's business;

12.   adjustment and the negotiating of settlements, with or on behalf of
      claimants or underwriters, of any claim, damages for which are recoverable
      under policies of insurance;

13.   arrangement or the prompt dispatch of each Vessel from loading and
      discharging ports and for transit through canals;

14.   arrangement for employment of counsel, and the investigation, follow-up
      and negotiating of the settlement of all claims arising in connection with
      the operation of each Vessel;

15.   arrangement for the appointment of an adjuster and assistance in preparing
      the average account, taking proper security for the cargo's and freight's
      proportion of average, and in all ways reasonably possible protecting the
      interest of each Vessel and her owner;

                                       6
<PAGE>

16.   negotiating of the settlement of insurance claims of Vessel owner's or
      disponent owner's protection and indemnity insurance and the arranging for
      the making of disbursements accordingly for owner's or disponent owner's
      account;

17.   attendance to all matters involving each Vessel's crew, including, but not
      limited to, the following:

            (a)   arranging for the procurement and enlistment for each Vessel,
                  as required by applicable law, of competent, reliable and duly
                  licenced personnel (hereinafter referred to as 'crew
                  members'), and all replacements therefore as from time to time
                  may be required;

            (b)   arranging for all transportation, board and lodging for the
                  crew members as and when required at rates and types of
                  accommodations as customary in the industry;

            (c)   keeping and maintaining full and complete records of any
                  labour agreements which may be entered into between owner or
                  disponent owner and the crew members and the prompt reporting
                  to owner or disponent owner as soon as notice or knowledge
                  thereof is received of any change or proposed change in labour
                  agreements or other regulations relating to the master and the
                  crew members;

            (d)   negotiating the settlement of all wages with the crew members
                  during the course of and upon termination of their employment;

            (e)   the handling of all details and negotiating the settlement of
                  any and all claims of the crew members including, but not
                  limited to, those arising out of accidents, sickness, or
                  death, loss of personal effects, disputes under articles or
                  contracts of enlistment, policies of insurance and fines;

            (f)   keeping and maintaining all administrative and financial
                  records relating to the crew members as required by law,
                  labour agreements, owner or disponent owner, and rendering to
                  owner or disponent owner any and all reports when, as and in
                  such form as requested by owner or disponent owner; and

            (g)   the performance of any other function in connection with crew
                  members as may be requested by owner or disponent owner;

18.   payment of all charges incurred in connection with the management of each
      Vessel, including, but not limited to, the cost of the items listed in 5
      to 17 above, canal tolls, repair charges and port charges, and any amounts
      due to any governmental agency with respect to the Vessel crews;

19.   in such form and on such terms as may be requested by Operating Sub, the
      prompt reporting to Operating Sub or Shipco of each Vessel's movement,
      position at sea, arrival and departure dates, casualties and damages
      received or caused by each Vessel;

20.   arrangement and retention in full force and affect of all customary
      insurance pertaining to each Vessel as instructed by owner or disponent
      owner and all such policies of insurance, including but not limited to
      protection and indemnity, hull and machinery, war risk and oil pollution
      covering each Vessel;

21.   if requested by owner or disponent owner, making application for
      certificates of financial responsibility on behalf of Vessels covered
      hereunder;

For the purposes hereof, "Shipcos" means vessel owning corporations, each such
corporation being the owner or charterer of one vessel; and "Vessels" means
vessels which are primarily either liquefied natural gas tankers or crude oil
tankers owned or chartered by Shipcos.

                                       7
<PAGE>

TK Bahamas shall provide quarterly reports to Operating Sub outlining the nature
and details of the foregoing services that have been provided.

                                       8
<PAGE>

                                   SCHEDULE B

                                      FEES

In consideration for the provision of services by TK Bahamas to OPERATING SUB,
OPERATING SUB shall pay TK Bahamas an annual Fee for each calendar year during
the term of this Agreement divided into twelve (12) equal monthly installments
payable in advance and which is equal to the annual aggregate amount of such
costs and expenses (the "Costs and Expenses") as TK Bahamas may reasonably incur
in connection with the provision of the Services plus a reasonable profit
mark-up to be agreed upon and reviewed annually by the parties and which shall
be consistent with the Organization for Economic Development's guidelines for
transfer pricing levels as well as local rules and regulations.

In respect of each calendar year during the term of this Agreement, TK Bahamas
shall prepare an estimate of the Costs and Expenses it reasonably expects to
incur during such year and shall submit such estimate to OPERATING SUB within
ten (10) Bahamian banking days of the last day of the immediately preceding
year.

The calculation of TK Bahamas' aforesaid estimated Costs and Expenses may be
adjusted from time to time by agreement between the parties, and the Fee payable
by OPERATING SUB shall be re-calculated accordingly.

Within sixty (60) Bahamian banking days (or such longer period as the parties
shall agree) after the end of each year, TK Bahamas shall submit to OPERATING
SUB an accounting of the Costs and Expenses it has incurred in that year (the
"actual Costs and Expenses").

Ten (10) Bahamian banking days (or such longer period as the parties shall
agree) after the date on which TK Bahamas delivers such accounting of its actual
Costs and Expenses:

            (a)   where the aggregate of all Fees paid in the relevant year is
                  less than the agreed mark-up of the actual Costs and Expenses,
                  OPERATING SUB shall pay an Adjustment to TK Bahamas; and

            (b)   where the aggregate of all Fees paid in the relevant year is
                  greater than the agreed mark-up of the actual Costs and
                  Expenses, TK Bahamas shall pay an Adjustment to OPERATING SUB.

Where the aggregate of all Fees paid in a year is equal to the agreed mark-up of
the actual Costs and Expenses, no Adjustment is payable.

For the purposes hereof "ADJUSTMENT" means a payment (made in accordance with
the foregoing) in the amount of the difference between the aggregate of all Fees
paid in a year and the agreed mark-up of the actual Costs and Expenses incurred
in that year.

                                       9

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