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                                                                    EXHIBIT 10.2

                CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

     THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of
__________, 2005, is entered into among Teekay Shipping Corporation, a Marshall
Islands corporation ("Teekay"); Teekay GP L.L.C., a Marshall Islands limited
liability company ("GP LLC"); Teekay LNG Partners L.P., a Marshall Islands
limited partnership (the "MLP"); Teekay LNG Operating L.L.C., a Marshall Islands
limited liability company (the "OLLC"); and Teekay Shipping Spain S.L., a
Spanish company ("Teekay Spain"). The foregoing shall be referred to
individually as a "Party" and collectively as the "Parties." Certain capitalized
terms have the meanings assigned to them in Article I hereof.

                                    RECITALS

     A. Teekay and GP LLC have formed the MLP pursuant to the Marshall Islands
Limited Partnership Act for the purpose of, among other things, acquiring,
owning and operating substantially all the assets of certain subsidiaries of
Teekay used in the business of providing crude oil and liquefied natural gas
("LNG") marine transportation services.

     B. To accomplish the objectives and purposes in the preceding recital, the
following actions have been taken prior to the date hereof:

     1.   Teekay formed GP LLC under the terms of the Marshall Islands Limited
          Liability Company Act (the "Marshall Islands LLC Act") and contributed
          $1,000 in exchange for all of the member interests in GP LLC.

     2.   GP LLC and Teekay formed the MLP, to which GP LLC contributed $20 and
          Teekay contributed $980 in exchange for a 2% general partner interest
          and 98% limited partner interest, respectively.

     3.   Each of Teekay Shipping Spain, S.A., Naviera Teekay Gas, S.A., Naviera
          Teekay Gas II, S.A., Naviera Teekay Gas III, S.A., Naviera Teekay Gas
          IV, S.A. and Teekay Servicos Maritimos, S.A. converted from a Spanish
          sociedad anonima to a Spanish sociedad de responsabilidad limitada
          named Teekay Spain, Naviera Teekay Gas, S.L. ("Gas I"), Naviera Teekay
          Gas II, S.L. ("Gas II"), Naviera Teekay Gas III, S.L. ("Gas III"),
          Naviera Teekay Gas IV, S.L. ("Gas IV") and Teekay Servicos Maritimos,
          S.L. (collectively, the "Subs").

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     4.   Teekay formed the OLLC pursuant to the Marshall Islands LLC Act and
          contributed $[100] in exchange for all of the member interests in the
          OLLC.

     C. Shortly before the consummation of the transactions contemplated hereby:

     1.   Teekay made a $___ million loan to Luxco in exchange for a (a) $__
          million note and (b) $___ million note.

     2.   Teekay Luxembourg S.a.r.l. ("Luxco") invested $__ million in shares of
          Teekay Spain, S.L. ("SpainCo"), and Luxco and SpainCo made loans
          to the Subs in an aggregate amount of $__ million.

     3.   The Subs used the funds received as a result of the actions described
          in Recital C.2 above, as well as existing cash of $____ million, to
          repay debt outstanding of $____ million and make $___ million in swap
          cancellation payments.

     4.   Teekay contributed (a) all of Teekay's interest in Luxco, (b) a note
          receivable in the amount of $____ million due to Teekay from Luxco,
          and (c) all of Teekay's interest in Granada Spirit L.L.C., a Marshall
          Islands limited liability company ("Granada"), an indirect, wholly
          owned subsidiary of Teekay that owns the Suezmax tanker the Granada
          Spirit to the OLLC as a capital contribution and in exchange for a
          $___ million note payable.

     5.   Teekay made a capital contribution to the GP LLC of a member interest
          in the OLLC with an aggregate value equal to 2% of the equity value of
          the MLP (the "Initial OLLC Interest").

     6.   The GP LLC contributed the Initial OLLC Interest to the MLP in
          exchange for (a) a continued 2% general partner interest in the MLP
          and (b) the Incentive Distribution Rights.

     7.   Teekay contributed to the MLP all of its remaining member interest in
          the OLLC (the "Remaining OLLC Interest") in exchange for (a) a
          continued 98% limited partner interest in the MLP and (b) a $___
          million note payable (the "Note").

     8    Each of the Subs, Luxco, SpainCo, Granada, Teekay II Iberia S.L., and
          the OLLC filed elections to be disregarded for United States federal
          tax purposes.

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     9.   Teekay Spain and Gas I will enter into an amendment and restatement of
          the Existing Credit Facility that will be used for general working
          capital purposes and distributions.

     D. Concurrently with the consummation of the transactions contemplated
hereby, each of the following matters shall occur:

     1.   Teekay's limited partner interest in the MLP will be converted to (a)
          8,984,572 Common Units, representing a 30.4% limited partner interest
          in the MLP, and (b) 14,484,572 Subordinated Units, representing a 49%
          limited partner interest in the MLP.

     2.   The public, through the underwriters of the Offering (the
          "Underwriters"), will contribute $115.5 million (the "Offering
          Proceeds") in cash to the MLP in exchange for 5,500,000 Common Units
          in the MLP.

     3.   The MLP will use the Offering Proceeds to (a) pay the underwriting
          discounts and commissions of $8.1 million, (b) pay other transaction
          expenses incurred by the MLP in connection with the Offering of
          approximately $3.4 million and (c) repay the Note.

     4.   The agreements of limited partnership and the limited liability
          company agreements of the aforementioned entities will be amended and
          restated to the extent necessary to reflect the applicable matters set
          forth above and in Article III and Article IV of this Agreement.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the Parties undertake and agree as follows:

                                    ARTICLE I
                            DEFINITIONS; RECORDATION

     1.1 DEFINITIONS. The following capitalized terms have the meanings given
below.

     "Acts" shall mean collectively the Marshall Islands Limited Partnership Act
and the Marshall Islands LLC Act.

     "Agreement" means this Contribution, Conveyance and Assumption Agreement.

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     "Assets" means the assets, rights and interests contributed and conveyed
(or intended so to be) as reflected in this Agreement.

     "Attorney-In-Fact" has the meaning assigned to such term in Section 7.2.

     "Bank Credit Facility" has the meaning assigned to such term in Section
2.5.

     "Beneficial Owner" has the meaning assigned to such term in Section 8.2.

     "Common Units" has the meaning assigned to such term in the Partnership
Agreement.

     "Conveyed Assets" has the meaning assigned to such term in Section 7.2.

     "Conveying Parties" has the meaning assigned to such term in Section 7.2.

     "Effective Date" means _________________, 2005.

     "Effective Time" means the time when the transactions contemplated by
Article III hereof have been consummated.

     "Existing Credit Facility" means the Agreement dated as of February 22,
2001, by and among Naviera Teekay Gas, S.L., as the borrower, the Banks named
therein, Chase Manhattan International Limited, as agent, and the other parties
thereto.

     "Hazardous Substances" has the meaning assigned to such term in the Omnibus
Agreement.

     "GP LLC" has the meaning assigned to such term in the first paragraph of
this Agreement.

     "Incentive Distribution Rights" has the meaning assigned to such term in
the Partnership Agreement.

     "Initial OLLC Interest" has the meaning assigned to such term in Recital
C.5.

     "Initial OLLC Liabilities" shall mean all of the liabilities and
obligations of the OLLC relating to the Initial OLLC Interest.

     "LNG" has the meaning assigned to such term in Recital A to this Agreement.

     "Laws" means any and all laws, statutes, ordinances, rules or regulations
promulgated by a governmental authority, orders of a governmental authority,
judicial decisions, decisions of arbitrators or determinations of any
governmental authority or court.

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     "Luxco" has the meaning assigned to such term in Recital C.2 of this
Agreement.

     "MLP" has the meaning assigned to such term in the first paragraph of this
Agreement.

     "Marshall Islands LLC Act" has the meaning assigned to such term in Recital
B.1 of this Agreement.

     "Offering" means the initial public offering and transfer of title of
5,500,000 Common Units by the MLP to the public.

     "Offering Proceeds" has the meaning assigned to such term in Recital D.2 of
this Agreement.

     "OLLC" has the meaning assigned to such term in the first paragraph of this
Agreement.

     "Omnibus Agreement" means the Omnibus Agreement dated of even date
herewith, by and among Teekay, GP LLC, the OLLC and the MLP.

     "Partnership Agreement" means the First Amended and Restated Agreement of
Limited Partnership of the MLP, as it may be amended from time to time.

     "Partnership Group" has the meaning assigned to such term in the Omnibus
Agreement.

     "Party and Parties" have the meanings assigned to such terms in the first
paragraph of this Agreement.

     "Registration Statement" means the registration statement on Form F-1 (File
No. 333-120727) filed by the MLP relating to the Offering, as it may be amended.

     "Remaining OLLC Interest" has the meaning assigned to such term in Recital
C.7 of this Agreement.

     "Remaining OLLC Liabilities" means all of the liabilities and obligations
of the OLLC relating to the Remaining OLLC Interest.

     "Restriction" has the meaning assigned to such term in Section 8.2.

     "Restriction Asset" has the meaning assigned to such term in Section 8.2.

     "Specific Conveyances" has the meaning assigned to such term in Section
3.5.

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     "Subordinated Units" has the meaning assigned to such term in the
Partnership Agreement.

     "Subs" has the meaning assigned to such term in Recital B.3 of this
Agreement.

     "Teekay" has the meaning assigned to such term in the first paragraph of
this Agreement.

     "Teekay Spain" has the meaning assigned to such term in the first paragraph
of this Agreement.

     "Underwriters" has the meaning assigned to such term in Recital D.2 of this
Agreement.

                                   ARTICLE II
                      THE OFFERING AND RELATED TRANSACTIONS

     The Parties acknowledge that each of the following actions is occurring
prior to the completion of the transactions contemplated in Article III hereof.

     2.1 CONTRIBUTION BY TEEKAY TO GP LLC OF INITIAL OLLC INTEREST. The Parties
acknowledge Teekay's contribution of the Initial OLLC Interest to GP LLC.

     2.2 CONTRIBUTION BY GP LLC TO THE MLP OF THE INITIAL OLLC INTEREST. The
Parties acknowledge GP LLC's contribution of the Initial OLLC Interest to the
MLP prior to the Offering, and GP LLC acknowledges receipt of the following in
exchange for its contribution of the Initial OLLC Interest to the MLP as an
additional contribution to the capital of the MLP: (a) a continuation of its 2%
general partner interest in the MLP and (b) the Incentive Distribution Rights in
the MLP.

     2.3 CONTRIBUTION BY TEEKAY TO THE MLP OF THE REMAINING OLLC INTEREST AND
CASH. The Parties acknowledge Teekay's contribution of the Remaining OLLC
Interest to the MLP prior to the Offering, and Teekay acknowledges (a) the
continuation of its 98% limited partner interest in the MLP in exchange for its
contribution to the MLP of the Remaining OLLC Interest and (b) the Note.

     2.4 AMENDMENT AND RESTATEMENT OF EXISTING CREDIT FACILITY. Teekay Spain and
Gas I have amended and restated the Existing Credit Facility, pursuant to which
the MLP, the OLLC and certain of the OLLC's subsidiaries shall have a working
capital line of credit (such amended and restated credit facility, and any
extension, renewal or refinancing thereof, being the "Bank Credit Facility").

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                                   ARTICLE III
                             CONCURRENT TRANSACTIONS

     The Parties acknowledge that each of the following actions is occurring
concurrently with the closing of the Offering and the completion of the actions
set forth in Article II above.

     3.1 CONVERSION OF TEEKAY'S LIMITED PARTNER INTEREST. The MLP hereby
converts Teekay's limited partner interest in the MLP into (a) 8,984,572 Common
Units, representing a 30.4% limited partner interest in the MLP, and (b)
14,484,572 Subordinated Units, representing a 49% limited partner interest in
the MLP.

     3.2 MLP RECEIPT OF CASH CONTRIBUTION. In exchange for the MLP's issuance of
5,500,000 Common Units, the MLP acknowledges receipt of the Offering Proceeds in
cash as a capital contribution to the MLP, and the Parties acknowledge that the
MLP has used all of such capital contribution to (a) pay the Underwriters'
discounts and commissions of $8.1 million (which may be withheld by the
Underwriters from the Offering Proceeds as payment thereof), (b) pay other
Offering expenses incurred by the MLP of approximately $3.4 million and (c)
repay the Note.

     3.3 SPECIFIC CONVEYANCES. To further evidence the contributions of the
Assets reflected in this Agreement, each party making such contribution may have
executed and delivered to the party receiving such contribution certain
conveyance, assignment and bill of sale instruments (the "Specific
Conveyances"). The Specific Conveyances shall evidence and perfect such sale and
contribution made by this Agreement and shall not constitute a second conveyance
of any assets or interests therein and shall be subject to the terms of this
Agreement.

                                   ARTICLE IV
                        ASSUMPTION OF CERTAIN LIABILITIES

     4.1 ASSUMPTION OF INITIAL OLLC LIABILITIES BY GP LLC. In connection with
the contribution by Teekay of the Initial OLLC Interest to GP LLC, as described
in Section 2.1 above, GP LLC hereby assumes and agrees to duly and timely pay,
perform and discharge all of the Initial OLLC Liabilities, to the full extent
that Teekay has been heretofore or would have been in the future obligated to
pay, perform and discharge the Initial OLLC Liabilities were it not for the
execution and delivery of this Agreement; provided, however, that such
assumption and agreement to duly and timely pay, perform and discharge the
Initial OLLC Liabilities shall not (a) increase the obligation of GP LLC with
respect to the Initial OLLC Liabilities beyond that of Teekay, (b) waive any
valid defense that was available to Teekay with respect to the Initial OLLC
Liabilities or (c) enlarge any rights or remedies of any third party under or
with respect to any of the Initial OLLC Liabilities.

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

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     4.2 ASSUMPTION OF INITIAL OLLC LIABILITIES BY THE MLP. In connection with
the contribution by GP LLC to the MLP of the Initial OLLC Interest as described
in Section 2.2 above, the MLP hereby assumes and agrees to duly and timely pay,
perform and discharge all of the Initial OLLC Liabilities, to the full extent
that GP LLC has been heretofore or would have been in the future obligated to
pay, perform and discharge such obligations and liabilities were it not for the
execution and delivery of this Agreement; provided, however, that such
assumption and agreement to duly and timely pay, perform and discharge the
Initial OLLC Liabilities shall not (a) increase the obligation of the MLP with
respect to the Initial OLLC Liabilities beyond that of GP LLC, (b) waive any
valid defense that was available to GP LLC with respect to the Initial OLLC
Liabilities or (c) enlarge any rights or remedies of any third party under or
with respect to any of the Initial OLLC Liabilities.

     4.3 ASSUMPTION OF REMAINING OLLC LIABILITIES BY THE MLP. In connection with
the contribution by Teekay to the MLP of the Remaining OLLC Interest as
described in Section 2.3 above, the MLP hereby assumes and agrees to duly and
timely pay, perform and discharge all of the Remaining OLLC Liabilities, to the
full extent that Teekay has been heretofore or would have been in the future
obligated to pay, perform and discharge such obligations and liabilities were it
not for the execution and delivery of this Agreement; provided, however, that
such assumption and agreement to duly and timely pay, perform and discharge the
Remaining OLLC Liabilities shall not (a) increase the obligation of the MLP with
respect to the Remaining OLLC Liabilities beyond that of Teekay, (b) waive any
valid defense that was available to Teekay with respect to the Remaining OLLC
Liabilities or (c) enlarge any rights or remedies of any third party under or
with respect to any of the Remaining OLLC Liabilities.

     4.4 GENERAL PROVISIONS RELATING TO ASSUMPTION OF LIABILITIES.
Notwithstanding anything to the contrary contained in this Agreement, including,
without limitation, the terms and provisions of this Article IV, none of the
Parties shall be deemed to have assumed, and none of the Assets have been or are
being contributed subject to, [(a) any liens or security interests securing
consensual indebtedness covering any of the Assets, except for liens and
security interests securing borrowings under the Existing Credit Facility, the
Bank Credit Facility and all such liens and security interests disclosed in the
Registration Statement or normally associated with oil and LNG shipping vessels,
and all such liens and security interests (except such liens set forth above)
shall be deemed to be excluded from the assumptions of liabilities made under
this Article IV or (b) ]any of the liabilities covered by the indemnities set
forth in the Omnibus Agreement to the extent such liabilities are covered by
such indemnities, and all such liabilities shall be deemed to be excluded from
the assumptions of liabilities made under this Article IV to the extent that
such liabilities are covered by such indemnities.

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

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                                    ARTICLE V
                             ADDITIONAL TRANSACTION

     5.1 EXERCISE OF THE OVER-ALLOTMENT OPTION. The Parties acknowledge that in
the event the Underwriters exercise their over-allotment option, the MLP shall
contribute to the OLLC any net proceeds therefrom for debt repayment by the
OLLC.

                                   ARTICLE VI
                                  TITLE MATTERS

     6.1 ENCUMBRANCES.

     (a) Except to the extent provided in Article IV or any other document
executed in connection with this Agreement or the Offering, including, without
limitation, the Omnibus Agreement, the contribution and conveyance (by operation
of law or otherwise) of the various Assets are made expressly subject to all
recorded encumbrances, agreements, defects, restrictions, and adverse claims
covering the respective Assets and all Laws of governmental authorities or
tribunals having or asserting jurisdiction over the Assets and operations
conducted thereon or therewith, in each case to the extent the same are valid
and enforceable and affect the Assets, including, without limitation, (i) all
matters that a visual inspection of the Assets would reflect, (ii) the
applicable liabilities assumed in Article IV, and (iii) all matters contained in
the Specific Conveyances.

     (b) To the extent that certain jurisdictions in which the Assets are
located or deemed to be located may require that documents be recorded in order
to evidence the transfers of title reflected in this Agreement, then the
provisions set forth in Section 6.1(a) immediately above shall also be
applicable to the conveyances under such documents.

     6.2 DISCLAIMER OF WARRANTIES; SUBROGATION; WAIVER OF BULK SALES LAWS.

         (a) EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING, INCLUDING, WITHOUT
LIMITATION, THE OMNIBUS AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE THAT NONE
OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES
AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS
OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR
STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE,
QUALITY OR CONDITION OF THE ASSETS, INCLUDING, WITHOUT

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LIMITATION, THE ENVIRONMENTAL CONDITION OF THE ASSETS GENERALLY, INCLUDING,
WITHOUT LIMITATION, THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER
MATTERS ON THE ASSETS, (B) THE INCOME TO BE DERIVED FROM THE ASSETS, (C) THE
SUITABILITY OF THE ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE
CONDUCTED THEREON OR THEREWITH, (D) THE COMPLIANCE OF OR BY THE ASSETS OR THEIR
OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR
REQUIREMENTS), OR (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS. EXCEPT TO THE
EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH
THIS AGREEMENT OR THE OFFERING INCLUDING, WITHOUT LIMITATION, THE OMNIBUS
AGREEMENT, EACH PARTY ACKNOWLEDGES AND AGREES THAT SUCH PARTY HAS HAD THE
OPPORTUNITY TO INSPECT THE RESPECTIVE ASSETS, AND SUCH PARTY IS RELYING SOLELY
ON ITS OWN INVESTIGATION OF THE RESPECTIVE ASSETS AND NOT ON ANY INFORMATION
PROVIDED OR TO BE PROVIDED BY ANY OF THE OTHER PARTIES. EXCEPT TO THE EXTENT
PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS
AGREEMENT OR THE OFFERING, INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT,
NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE ASSETS FURNISHED BY
ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN
ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR
THE OFFERING, INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT, EACH OF THE
PARTIES ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
CONTRIBUTION OF THE ASSETS AS PROVIDED FOR HEREIN IS MADE IN AN "AS IS," "WHERE
IS" CONDITION WITH ALL FAULTS, AND THE ASSETS ARE CONTRIBUTED AND CONVEYED
SUBJECT TO ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL
SURVIVE SUCH CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT.
THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE
CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH

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RESPECT TO THE ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN
EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
OFFERING, INCLUDING, WITHOUT LIMITATION, THE OMNIBUS AGREEMENT.

     (b) To the extent that certain jurisdictions in which the Assets are
located or deemed to be located may require that documents be recorded in order
to evidence the transfers of title reflected in this Agreement, then the
disclaimers set forth in Section 6.2(a) immediately above shall also be
applicable to the conveyances under such documents.

     (c) The contributions of the Assets made under this Agreement are made with
full rights of substitution and subrogation of the respective Parties receiving
such contributions, and all persons claiming by, through and under such Parties,
to the extent assignable, in and to all covenants and warranties by the
predecessors-in-title of the Parties contributing the Assets, and with full
subrogation of all rights accruing under applicable statutes of limitation and
all rights of action of warranty against all former owners of the Assets.

     (d) Each of the Parties agrees that the disclaimers contained in this
Section 6.2 are "conspicuous" disclaimers. Any covenants implied by Law by the
use of the words "grant," "convey," "bargain," "sell," "assign," "transfer,"
"deliver," or "set over" or any of them, or any other words used in this
Agreement or any exhibits hereto, are hereby expressly disclaimed, waived and
negated.

     (e) Each of the Parties hereby waives compliance with any applicable bulk
sales law or any similar law in any applicable jurisdiction in respect of the
transactions contemplated by this Agreement.

                                   ARTICLE VII
                               FURTHER ASSURANCES

     7.1 FURTHER ASSURANCES. From time to time after the date hereof, and
without any further consideration, the Parties agree to execute, acknowledge and
deliver all such additional deeds, assignments, bills of sale, conveyances,
instruments, notices, releases, acquittances and other documents, and will do
all such other acts and things, all in accordance with applicable Law, as may be
necessary or appropriate (a) more fully to assure that the applicable Parties
own all of the properties, rights, titles, interests, estates, remedies, powers
and privileges granted by this Agreement, or which are intended to be so
granted, (b) more fully and effectively to vest in the applicable Parties and
their respective successors and assigns beneficial and record

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title to the interests contributed and assigned by this Agreement or intended so
to be and (c) to more fully and effectively carry out the purposes and intent of
this Agreement.

     7.2 POWER OF ATTORNEY. Each Party that has conveyed any Assets (the
"Conveyed Assets") as reflected by this Agreement (collectively, the "Conveying
Parties") hereby constitutes and appoints GP LLC (the "Attorney-in-Fact") its
true and lawful attorney-in-fact with full power of substitution for it and in
its name, place and stead or otherwise on behalf of the applicable Conveying
Party and its successors and assigns, and for the benefit of the
Attorney-in-Fact to demand and receive from time to time the Conveyed Assets
contributed and conveyed by this Agreement (or intended so to be) and to execute
in the name of the applicable Conveying Party and its successors and assigns
instruments of conveyance, instruments of further assurance and to give receipts
and releases in respect of the same, and from time to time to institute and
prosecute in the name of the applicable Conveying Party for the benefit of the
Attorney-in-Fact, any and all proceedings at law, in equity or otherwise which
the Attorney-in-Fact may deem proper in order to (a) collect, assert or enforce
any claims, rights or titles of any kind in and to the Conveyed Assets, (b)
defend and compromise any and all actions, suits or proceedings in respect of
any of the Conveyed Assets, and (c) do any and all such acts and things in
furtherance of this Agreement as the Attorney-in-Fact shall deem advisable. Each
Conveying Party hereby declares that the appointment hereby made and the powers
hereby granted are coupled with an interest and are and shall be irrevocable and
perpetual and shall not be terminated by any act of any Conveying Party or its
successors or assigns or by operation of law.

     7.3 OTHER ASSURANCES. From time to time after the date hereof, and without
any further consideration, each of the Parties shall execute, acknowledge and
deliver all such additional instruments, notices and other documents, and will
do all such other acts and things, all in accordance with applicable Law, as may
be necessary or appropriate to more fully and effectively carry out the purposes
and intent of this Agreement. It is the express intent of the Parties that the
MLP or its subsidiaries own all assets necessary to operate the Assets that are
identified in this Agreement and in the Registration Statement. To the extent
any assets were not identified but are necessary to the operation of such Assets
that were identified, then the intent of the Parties is that all such
unidentified assets are intended to be conveyed to the appropriate members of
the Partnership Group. To the extent such assets are identified at a later date,
the Parties shall take the appropriate actions required in order to convey all
such assets to the appropriate members of the Partnership Group. Likewise, to
the extent that assets are identified at a later date that were not intended by
the parties to be conveyed as reflected in this Agreement or the Registration

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Statement, the Parties shall take the appropriate actions required in order to
convey all such assets to the appropriate party.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     8.1 ORDER OF COMPLETION OF TRANSACTIONS. The transactions provided for in
Articles II, III, IV and V of this Agreement shall be completed [on] the
Effective Date in the following order:

     First, the transactions provided for in Articles II and IV shall be
completed in the order set forth therein;

     Second, the transactions provided for in Article III shall be completed in
the order set forth therein; and

     Fourth, the transactions provided for in Article V shall be completed in
the order set forth therein.

     8.2 CONSENTS; RESTRICTION ON ASSIGNMENT. If there are prohibitions against
or conditions to the contribution and conveyance of one or more of the Assets
without the prior written consent of third parties, including, without
limitation, governmental agencies (other than consents of a ministerial nature
which are normally granted in the ordinary course of business), which if not
satisfied would result in a breach of such prohibitions or conditions or would
give an outside party the right to terminate rights of the Party to whom the
applicable Assets were intended to be conveyed (the "Beneficial Owner") with
respect to such portion of the Assets (herein called a "Restriction"), then any
provision contained in this Agreement to the contrary notwithstanding, the
transfer of title to or interest in each such portion of the Assets (herein
called the "Restriction Asset") pursuant to this Agreement shall not become
effective unless and until such Restriction is satisfied, waived or no longer
applies. When and if such a Restriction is so satisfied, waived or no longer
applies, to the extent permitted by applicable Law and any applicable
contractual provisions, the assignment of the Restriction Asset subject thereto
shall become effective automatically as of the Effective Time (in the
appropriate order indicated by Section 8.1), without further action on the part
of any Party. Each of the applicable Parties that were involved with the
conveyance of a Restriction Asset agree to use commercially reasonable efforts
to obtain on a timely basis satisfaction of any Restriction applicable to any
Restriction Asset conveyed by or acquired by any of them. The description of any
portion of the Assets as a "Restriction Asset" shall not be construed as an
admission that any Restriction exists with respect to the transfer of such
portion of the Assets. In the event that any Restriction Asset exists, the
applicable Party agrees to continue to hold such Restriction Asset in trust for
the

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                                      -13-
<PAGE>

exclusive benefit of the applicable Party to whom such Restriction Asset was
intended to be conveyed and to otherwise use commercially reasonable efforts to
provide such other Party with the benefits thereof, and the party holding such
Restriction Asset will enter into other agreements, or take such other action as
it may deem necessary, in order to ensure that the applicable Party to whom such
Restriction Asset was intended to be conveyed has the assets and concomitant
rights necessary to enable the applicable Party to operate such Restriction
Asset in all material respects as it was operated prior to the Effective Time.
Furthermore, in such event the applicable Party to whom such Restriction Asset
was intended to be conveyed agrees to assume such liabilities and perform such
obligations relating to such Restriction Asset as if it had been conveyed at the
Effective Time.

     8.3 COSTS. The MLP shall pay any and all sales, use and similar taxes
arising out of the contributions, conveyances and deliveries to be made
hereunder, and shall pay all documentary, filing, recording, transfer, deed, and
conveyance taxes and fees required in connection therewith. In addition, the MLP
shall be responsible for all costs, liabilities and expenses (including, without
limitation, court costs and reasonable attorneys' fees) incurred in connection
with the satisfaction or waiver of any Restriction pursuant to Section 8.2 to
the extent such Restriction was disclosed to the MLP on or before the Effective
Date.

     8.4 HEADINGS; REFERENCES; INTERPRETATION. All Article and Section headings
in this Agreement are for convenience only and shall not be deemed to control or
affect the meaning or construction of any of the provisions hereof. The words
"hereof," "herein" and "hereunder" and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All references herein to Articles and
Sections shall, unless the context requires a different construction, be deemed
to be references to the Articles and Sections of this Agreement, respectively.
All personal pronouns used in this Agreement, whether used in the masculine,
feminine or neuter gender, shall include all other genders, and the singular
shall include the plural and vice versa. The use herein of the word "including"
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as "without limitation," "but not limited to," or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter.

     8.5 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and assigns.

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                                      -14-
<PAGE>

     8.6 NO THIRD PARTY RIGHTS. The provisions of this Agreement are intended to
bind the Parties as to each other and are not intended to and do not create
rights in any other person or confer upon any other person any benefits, rights
or remedies and no person is or is intended to be a third party beneficiary of
any of the provisions of this Agreement.

     8.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

     8.8 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the [Republic of the Marshall Islands] applicable
to contracts made and to be performed wholly within such jurisdiction without
giving effect to conflict of law principles thereof, except to the extent that
it is mandatory that the law of some other jurisdiction, wherein the Assets are
located, shall apply.

     8.9 SEVERABILITY. If any of the provisions of this Agreement are held by
any court of competent jurisdiction to contravene, or to be invalid under, the
laws of any governmental body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect, as
nearly as possible, to the intention of the Parties as expressed in this
Agreement at the time of execution of this Agreement.

     8.10 DEED; BILL OF SALE; ASSIGNMENT. To the extent required and permitted
by applicable Law, this Agreement shall also constitute a "deed," "bill of sale"
or "assignment" of the Assets.

     8.11 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
from time to time only by the written agreement of all the Parties hereto.

     8.12 INTEGRATION. This Agreement and the instruments referenced herein
supersede all previous understandings or agreements among the Parties, whether
oral or written, with respect to its subject matter hereof. This Agreement and
such instruments contain the entire understanding of the Parties with respect to
the subject matter hereof and thereof. No understanding, representation, promise
or agreement, whether oral or written, is intended to be or shall be included in
or form part of this Agreement unless it is contained in a written amendment
hereto executed by the Parties hereto after the date of this Agreement.

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                                      -15-
<PAGE>

     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.

                                    TEEKAY SHIPPING CORPORATION, a
                                    Marshall Islands corporation

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                                       "Teekay"

                                    TEEKAY GP L.L.C., a Marshall Islands
                                    limited liability company

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                                       "GP LLC"

                                    TEEKAY LNG PARTNERS L.P., a
                                    Marshall Islands limited partnership

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                                       "MLP"

                                    TEEKAY LNG OPERATING L.L.C., a
                                    Marshall Islands limited liability company

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                                       "OLLC"

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                                      -16-
<PAGE>

                                    TEEKAY SHIPPING SPAIN S.L., a
                                    Spanish company

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                                       "Teekay Spain"

CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

                                      -17-<PAGE>
                                                                    Exhibit 10.4

================================================================================

                                OMNIBUS AGREEMENT

                                      AMONG

                           TEEKAY SHIPPING CORPORATION

                                TEEKAY GP L.L.C.

                           TEEKAY LNG OPERATING L.L.C.

                                       AND

                            TEEKAY LNG PARTNERS L.P.

================================================================================
<PAGE>

                                OMNIBUS AGREEMENT

      THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the
Closing Date (as defined herein), among Teekay Shipping Corporation, a Marshall
Islands corporation ("Teekay"), Teekay GP L.L.C., a Marshall Islands limited
liability company (including any permitted successors and assigns under the MLP
Agreement (as defined herein), the "General Partner"), for itself and on behalf
of the MLP in its capacity as general partner, Teekay LNG Operating L.L.C., a
Marshall Islands limited liability company (the "OLLC"), and Teekay LNG Partners
L.P., a Marshall Islands limited partnership (the "MLP").

                                R E C I T A L S:

      1.    The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles II and IV, with respect
to (a) those business opportunities that the Teekay Entities (as defined herein)
will not pursue during the term of this Agreement and (b) the procedures whereby
such business opportunities are to be offered to the Partnership Group (as
defined herein) and accepted or declined.

      2.    The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles III and IV, with
respect to (a) those business opportunities that the Partnership Group will not
pursue during the term of this Agreement and (b) the procedures whereby such
business opportunities are to be offered to Teekay and accepted or declined.

      3.    The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article V, with respect to (a)
Teekay's right of first offer relating to certain Crude Oil Assets (as defined
herein) and (b) the MLP's right of first offer relating to certain LNG Assets
(as defined herein).

      4.    The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VI, with respect to
certain indemnification obligations of Teekay.

      In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

      1.1    DEFINITIONS.

      As used in this Agreement, the following terms shall have the respective
meanings set forth below:

      "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with,

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
<PAGE>

the Person in question. As used herein, the term "control" means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

      "Agreement" means this Omnibus Agreement, as it may be amended, modified,
or supplemented from time to time in accordance with Section 7.6 hereof.

      "Acquiring Party" has the meaning given such term in Section 4.1(a).

      "Bid LNG Assets" has the meaning given such term in Section 2.2(b).

      "Break-up Costs" means the aggregate amount of any and all additional
taxes and other similar costs to (a) the Teekay Entities that would be required
to transfer LNG Assets acquired by the Teekay Entities as part of a larger
transaction to a Partnership Group Member pursuant to Section 2.2(a) or (b) the
Partnership Group that would be required to transfer Crude Oil Assets acquired
by the Partnership Group as part of a larger transaction to a Teekay Entity
pursuant to Section 3.2(b).

      "Change of Control" means, with respect to any Person (the "Applicable
Person"), any of the following events: (a) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the Applicable Person's assets to any other Person, unless
immediately following such sale, lease, exchange or other transfer such assets
are owned, directly or indirectly, by the Applicable Person; (b) the
consolidation or merger of the Applicable Person with or into another Person
pursuant to a transaction in which the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Securities of the Applicable Person are changed into or exchanged for Voting
Securities of the surviving Person or its parent and (ii) the holders of the
Voting Securities of the Applicable Person immediately prior to such transaction
own, directly or indirectly, not less than a majority of the outstanding Voting
Securities of the surviving Person or its parent immediately after such
transaction; and (c) a "person" or "group" (within the meaning of Sections 13(d)
or 14(d)(2) of the Exchange Act) other than Teekay or its Affiliates, with
respect to the General Partner, being or becoming the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all
of the then outstanding Voting Securities of the Applicable Person, except in a
merger or consolidation which would not constitute a Change of Control under
clause (b) above.

      "Closing Date" means the date of the closing of the initial public
offering of common units representing limited partner interests in the MLP.

      "Conflicts Committee" means the Conflicts Committee of the Board of
Directors of the General Partner.

      "Contribution Agreement" means that certain Contribution, Conveyance and
Assumption Agreement, dated as of the Closing Date, among Teekay, the General
Partner, the MLP, the

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -2-
<PAGE>

OLLC and Teekay Shipping Spain, S.L., together with the additional conveyance
documents and instruments contemplated or referenced thereunder.

      "Contribution Assets" has the meaning given such term in Section 6.1.

      "control" means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.

      "Covered Environmental Losses" means all environmental and toxic tort
Losses suffered or incurred by the Partnership Group by reason of or arising out
of:

      (i)   any violation or correction of violation of Environmental Laws; or

      (ii)  any event or condition associated with ownership or operation by the
Teekay Entities of the Contribution Assets (including, without limitation, the
presence of Hazardous Substances on, under, about or migrating to or from the
Contribution Assets or the disposal or release of Hazardous Substances generated
by operation of the Contribution Assets), including, without limitation, (A) the
cost and expense of any investigation, assessment, evaluation, monitoring,
containment, cleanup, repair, restoration, remediation or other corrective
action required or necessary under Environmental Laws, (B) the cost or expense
of the preparation and implementation of any closure, remedial, corrective
action or other plans required or necessary under Environmental Laws and (C) the
cost and expense for any environmental or toxic tort pre-trial, trial or
appellate legal or litigation support work;

but only to the extent that such violation complained of under clause (i), or
such events or conditions included in clause (ii), occurred before the Closing
Date; and, provided that, in no event shall Losses to the extent arising from a
change in any Environmental Law after the Closing Date be deemed "Covered
Environmental Losses."

      "Crude Oil Assets" means crude oil tankers and related charters.

      "Crude Oil Restricted Business" has the meaning given such term in
Section 3.1.

      "Environmental Laws" means all federal, state, foreign and local laws,
statutes, rules, regulations, orders, judgments and ordinances relating to
protection of health and safety and the environment, including, without
limitation, the United States federal Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Oil Pollution Act of 1990, the Hazardous Materials
Transportation Act, the Marine Mammal Protection Act, the Endangered Species
Act, the National Environmental Policy Act, and other environmental conservation
and protection laws, each as amended through the Closing Date.

      "Event of Loss" means any of the following events: (a) the actual or
constructive total loss of a Suezmax Asset or the agreed or compromised total
loss of a Suezmax Asset; (b) the

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -3-
<PAGE>

destruction of a Suezmax Asset; (c) the damage to a Suezmax Asset to an extent,
determined in good faith by the Conflicts Committee within 90 days after the
occurrence of such damage, as shall make repair thereof uneconomical or shall
render such Suezmax Asset permanently unfit for normal use (other than
obsolescence); or (d) the condemnation, confiscation, requisition, seizure,
forfeiture or other taking of title to or use of a Suezmax Asset that shall not
be revoked within six months. An Event of Loss shall be deemed to have occurred:
(i) in the event of the destruction or other actual total loss of a Suezmax
Asset, on the date of such loss; (ii) in the event of a constructive, agreed or
compromised total loss of a Suezmax Asset, on the date of determination of such
total loss pursuant to the relevant insurance policy; (iii) in the case of any
event referred to in clause (c) above, upon such determination by the General
Partner; or (iv) in the case of any event referred in clause (d) above, on the
date six months after the occurrence of such event.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "First Offer Negotiation Period" has the meaning given such term in
Section 5.2.

      "Fully-Built-Up Cost"" means, with respect to an LNG Asset to be acquired
or leased (pursuant to a capitalized lease obligation) by a Partnership Group
Member, the aggregate amount of all expenditures incurred (or to be incurred
prior to delivery to the Partnership Group Member) to acquire or construct and
bring such LNG Asset to the condition and location necessary for its intended
use by the Partnership Group Member.

      "General Partner" is defined in the introduction to this Agreement.

      "Hazardous Substances" means (a) substances which contain substances
defined in or regulated under applicable Environmental Laws; (b) petroleum and
petroleum products, including crude oil and any fractions thereof; (c) natural
gas, synthetic gas and any mixtures thereof; (d) any substances with respect to
which a federal, state, foreign or local agency requires environmental
investigation, monitoring, reporting or remediation; (e) any hazardous waste or
solid waste, within the meaning of any Environmental Law; (f) any solid,
hazardous, dangerous or toxic chemical, material, waste or substance, within the
meaning of and regulated by any Environmental Law; (g) any radioactive material;
and (h) any asbestos-containing materials that represent a health hazard.

      "LNG" means liquefied natural gas.

      "LNG Assets" means LNG carriers and related time charters.

      "LNG Restricted Business" has the meaning given such term in Section 2.1.

      "Losses" means losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs and expenses (including,
without limitation, court costs and reasonable attorneys' and experts' fees) of
any and every kind or character; provided,

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -4-
<PAGE>

however, that such term shall not include any special, indirect, incidental or
consequential damages.

      "MLP" is defined in the introduction to this Agreement.

      "MLP Agreement" means the First Amended and Restated Agreement of Limited
Partnership of the MLP, dated as of the Closing Date, as such agreement is in
effect on the Closing Date, to which reference is hereby made for all purposes
of this Agreement. No amendment or modification to the MLP Agreement subsequent
to the Closing Date shall be given effect for purposes of this Agreement unless
consented to by each of the Parties to this Agreement.

      "Offer" has the meaning given such term in Section 4.1.

      "Offered Assets" has the meaning given such term in Section 4.1.

      "Offeree" has the meaning given such term in Section 4.1.

      "Offer Period" has the meaning given such term in Section 4.1.

      "OLLC" is defined in the introduction to this Agreement.

      "Parties" means the parties to this Agreement and their successors and
permitted assigns.

      "Partnership Entities" means the General Partner, the MLP, the OLLC and
any Person controlled by any such entity.

      "Partnership Group" means the MLP, the OLLC and any Person controlled by
any such entity.

      "Partnership Group Member" means any Person in the Partnership Group.

      "Person" means an individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or any other
entity.

      "Potential Transferee" has the meaning given such term in Section 5.2.

      "Re-Charter" means the chartering of an LNG Asset or a Crude Oil Asset
pursuant to a time charter contract with a term of at least three (3) years in
the event that its existing charter expires or is terminated early (including,
without limitation, the chartering of any Replacement Suezmax Asset but only if
the charter party for the Replacement Suezmax Asset is not the same charter
party (or an Affiliate of such charter party) as for the replaced Suezmax
Asset).

      "Replacement Suezmax Assets" means any Suezmax tankers that replace any
Suezmax Assets upon (a) an Event of Loss or (b) the replacement of a
time-charter arrangement existing as of the Closing Date where the original
Suezmax Asset which was subject to such time charter

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -5-
<PAGE>

has been sold or transferred due to the exercise by the charter party of its
right under the time charter to cause such sale or transfer.

      "Restricted Business" means, as applicable, the LNG Restricted Business or
the Crude Oil Restricted Business.

      "Sale Assets" has the meaning given such term in Section 5.2.

      "Suezmax Assets" means the Suezmax tankers included in the Contribution
Assets and any Replacement Suezmax Assets relating to such original Suezmax
tankers.

      "Teekay Entities" means Teekay and any Person controlled, directly or
indirectly, by Teekay other than the Partnership Entities.

      "Transfer" means any transfer, assignment, sale or other disposition of
any LNG Assets by a Teekay Entity or of any Crude Oil Assets by a Partnership
Group Member; provided, however, that such term shall not include: (a)
transfers, assignments, sales or other dispositions from a Teekay Entity to
another Teekay Entity or from a Partnership Group Member to another Partnership
Group Member; (b) transfers, assignments, sales or other dispositions pursuant
to the terms of any related charter or other agreement with a charter party; (c)
transfers, assignments, sales or other dispositions pursuant to Article II or
III of this Agreement; or (d) grants of security interests in or mortgages or
liens on such LNG Assets or Crude Oil Assets in favor of a bona fide third-party
lender (but not the foreclosing of any such security interest, mortgage or
lien).

      "Transfer Notice" has the meaning given such term in Section 5.2.

      "Transferring Party" has the meaning given such term in Section 5.2.

      "Voting Securities" means securities of any class of Person entitling the
holders thereof to vote in the election of members of the board of directors or
other similar governing body of the Person.

                                   ARTICLE II
                      LNG RESTRICTED BUSINESS OPPORTUNITIES

      2.1   LNG RESTRICTED BUSINESSES. Subject to Section 7.4 and except as
permitted by Section 2.2, each of the Teekay Entities shall be prohibited from
engaging in or acquiring or investing in any business (each an "LNG Restricted
Business") that owns, operates or charters LNG Assets.

      2.2   PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1
to the contrary, the Teekay Entities may engage in the following activities
under any of the following circumstances:

            (a) the ownership and/or operation of any LNG Assets that they
acquire after the date of this Agreement if:

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -6-
<PAGE>

                  (i)   such LNG Assets are acquired as part of a business in a
      transaction in which the fair market value of such LNG Assets represents
      less than a majority of the fair market value (as determined in good faith
      by the board of directors of Teekay) of the total assets or business
      acquired; and

                  (ii)  the Teekay Entity has offered the General Partner the
      opportunity for any of the Partnership Group Members to purchase such LNG
      Assets in accordance with the procedures set forth in Section 4.1 and the
      General Partner, with the approval of the Conflicts Committee, has elected
      not to cause any Partnership Group Member to purchase such LNG Assets;

            (b) the ownership, operation and/or chartering of LNG Assets that
(i) are subject to an offer to purchase by a Teekay Entity as described in
Section 2.2(a)(ii) or (ii) subject to Section 4.1, relate to a tender, bid or
award for a proposed LNG project that a Teekay Entity has submitted or received
(or hereafter submits or receives) (such LNG Assets in clause (ii) being
referred to herein as "Bid LNG Assets"), in each case pending the applicable
offer of such LNG Assets to the General Partner and the General Partner's
determination pursuant to Section 4.1 whether to purchase the LNG Assets and, if
the General Partner's Conflicts Committee determines to cause a Partnership
Group Member to purchase such LNG Assets, pending the closing of such purchase;

            (c) the provision by Teekay Entities of ship management services
relating to an LNG Restricted Business;

            (d) the acquisition of up to a 9.9% equity ownership, voting or
profit participation interest in any publicly traded Person (other than the MLP)
that engages in an LNG Restricted Business;

            (e) the ownership, operation and/or chartering of any LNG Assets
with respect to which the General Partner has advised Teekay that the General
Partner has elected, with the approval of the Conflicts Committee, not to cause
a Partnership Group Member to acquire (or seek to acquire); or

            (f) the ownership and/or operation by Teekay Entities of the LNG
Assets subject to the Stock Purchase Agreement dated as of ___________, 2005,
between Teekay and the MLP if the MLP fails to perform its obligations to
purchase (or to cause other Partnership Group Members to purchase) such LNG
Assets under such agreement.

                                  ARTICLE III
                   CRUDE OIL RESTRICTED BUSINESS OPPORTUNITIES

      3.1   CRUDE OIL RESTRICTED BUSINESSES. Subject to Section 7.4 and except
as permitted by Section 3.2, each Partnership Group Member shall be prohibited
from engaging in or acquiring or investing in any business (each a "Crude Oil
Restricted Business") that owns, operates or charters Crude Oil Assets.

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -7-
<PAGE>

      3.2   PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 3.1
to the contrary, the Partnership Group Members may
engage in the following activities under any of the following circumstances:

            (a) the ownership, operation and/or chartering of any of the Suezmax
Assets, including any Replacement Suezmax Assets;

            (b) the ownership and/or operation of any Crude Oil Assets that it
acquires after the date of this Agreement if:

                  (i)   such Crude Oil Assets are acquired as part of a business
      in a transaction in which the fair market value of such Crude Oil Assets
      represents less than a majority of the fair market value (as determined in
      good faith by the General Partner's Conflicts Committee) of the total
      assets or business acquired; and

                  (ii)  the Partnership Group Member has offered Teekay the
      opportunity for Teekay or any other Teekay Entity to purchase such Crude
      Oil Assets in accordance with the procedures set forth in Section 4.1 and
      Teekay has elected not to purchase and not to cause another Teekay Entity
      to purchase such Crude Oil Assets;

            (c) the ownership, operation and/or chartering of Crude Oil Assets
that are subject to an offer by a Partnership Group Member as described in
Section 3.2(b) pending Teekay's determination whether to purchase the Crude Oil
Assets and, if Teekay determines to cause a Teekay Entity to purchase such Crude
Oil Assets, pending the closing of such purchase;

            (d) the acquisition of up to a 9.9% equity ownership, voting or
profit participation interest in any publicly traded Person that engages in a
Crude Oil Restricted Business; or

            (e) the ownership and/or operation by a Partnership Group Member of
any Crude Oil Assets with respect to which Teekay has previously advised the
General Partner that Teekay has elected not to cause a Teekay Entity to acquire
(or seek to acquire).

                                   ARTICLE IV
                        BUSINESS OPPORTUNITIES PROCEDURES

      4.1   PROCEDURES. In the event that (a) a Partnership Group Member
acquires Crude Oil Assets as part of a larger transaction in accordance with
Section 3.2(b), (b) a Teekay Entity acquires LNG Assets as part of a larger
transaction in accordance with Section 2.2(a), or (c) a Teekay Entity is awarded
a contract for the transportation requirements for all or any portion of any
proposed LNG project for which a Teekay Entity has tendered or submitted a bid,
then (i) not later than 30 days after the consummation of the acquisition (in
the case of clause (a) or (b) above) or (ii) not later than 180 days before the
scheduled delivery date of the relevant Bid LNG Asset (in the case of clause (c)
above), such acquiring Party (the "Acquiring Party") shall notify (A) Teekay, in
the case of an acquisition by a Partnership Group Member of Crude Oil Assets or
(B) the General Partner, in the case of an acquisition by a Teekay Entity of LNG
Assets or proposed acquisition of Bid LNG Assets of such acquisition (or
proposed acquisition) and offer

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -8-
<PAGE>

such party to be notified (each an "Offeree") the opportunity for the Offeree
(or, in the case of Teekay or the General Partner, any other Teekay Entity or
Partnership Group Member, as applicable) to purchase such Crude Oil Assets, LNG
Assets or Bid LNG Assets, as applicable (the "Offered Assets"), for (I) their
fair market value (plus any Break-up Costs), in the case of clause (a) or (b)
above) or (II) their Fully-Built-Up Cost, in the case of clause (c) above, in
each case on commercially reasonable terms in accordance with this Section (the
"Offer"). The Offer shall set forth the Acquiring Party's proposed terms
relating to the purchase of the Offered Assets by the Offeree (or, in the case
of Teekay or the General Partner, any other Teekay Entity or Partnership Group
Member, as applicable), including any liabilities to be assumed by the Offeree
as part of the Offer. As soon as practicable after the Offer is made, The
Acquiring Party will deliver to the Offeree all information prepared by or on
behalf of or in the possession of such Acquiring Party relating to the Offered
Assets and reasonably requested by the Offeree. As soon as practicable, but in
any event, within 90 days after receipt of such notification, the Offeree shall
notify the Acquiring Party in writing that either:

            (a)   the Offeree (with the concurrence of the Conflicts Committee
if the Offeree is the General Partner) has elected not to purchase (or not to
cause any of its permitted Affiliates to purchase) such Offered Assets, in which
event the Acquiring Party and its Affiliates shall, subject to the other terms
of this Agreement, be forever free to continue to own, operate and charter such
Offered Assets; or

            (b)   the Offeree (with the concurrence of the Conflicts Committee
if the Offeree is the General Partner) has elected to purchase (or to cause any
of its permitted Affiliates to purchase) such Offered Assets, in which event the
following procedures shall be followed:

                  (i)   After the receipt of the Offer by the Offeree, the
      Acquiring Party and the Offeree shall negotiate in good faith, the fair
      market value (and any Break-up Costs) or the Fully-Built-Up Cost, as
      applicable, of the Offered Assets that are subject to the Offer and the
      other terms of the Offer on which the Offered Assets will be sold to the
      Offeree. If the Acquiring Party and the Offeree agree (with the
      concurrence of the Conflicts Committee) on the fair market value (and any
      Break-up Costs) or the Fully-Built-Up Cost, as applicable, of the Offered
      Assets that are subject to the Offer and the other terms of the Offer
      during the 30-day period (the "Offer Period") after receipt by the
      Acquiring Party of the Offeree's election to purchase (or to cause any
      permitted Affiliate of the Offeree to purchase) the Offered Assets, the
      Offeree shall purchase (or cause any of its permitted Affiliates to
      purchase) the Offered Assets on such terms as soon as commercially
      practicable after such agreement has been reached.

                  (ii)  If the Acquiring Party and the Offeree are unable to
      agree on the fair market value (and any Break-up Costs) or the
      Fully-Built-Up Cost, as applicable, of the Offered Assets that are subject
      to the Offer or on any other terms of the Offer during the Offer Period,
      the Acquiring Party and the Offeree will engage an independent ship broker
      and/or an independent investment banking firm prior to the end of the
      Offer Period to determine the fair market value (and any Break-up Costs)
      or the Fully-Built-Up Cost, as applicable, of the Offered Assets and/or
      the other terms on which the Acquiring

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -9-
<PAGE>

      Party and the Offeree are unable to agree. In determining the fair market
      value or the Fully-Built-Up Cost of the Offered Assets and other terms on
      which the Offered Assets are to be sold, the ship broker or investment
      banking firm, as applicable, will have access to the proposed sale and
      purchase values and terms for the Offer submitted by the Acquiring Party
      and the Offeree, respectively, and to all information prepared by or on
      behalf of the Acquiring Party relating to the Offered Assets and
      reasonably requested by such ship broker or investment banking firm. Such
      ship broker or investment banking firm will determine the fair market
      value (and any Break-up Costs) or Fully-Built-Up Cost of the Offered
      Assets and/or the other terms on which the Acquiring Party and the Offeree
      are unable to agree within 60 days of its engagement and furnish the
      Acquiring Party and the Offeree its determination. The fees and expenses
      of the ship broker or investment banking firm, as applicable, will be
      divided equally between the Acquiring Party and the Offeree. Upon receipt
      of such determination, the Offeree will have the option, but not the
      obligation, to (with the concurrence of the Conflicts Committee if the
      Offeree is the General Partner):

                        (A)   purchase the Offered Assets for the fair market
            value (and any Break-up Costs) or Fully-Built-Up Cost, as
            applicable, and on the other terms determined by the ship broker or
            investment banking firm, as soon as commercially practicable after
            determinations have been made; or

                        (B)   elect not to purchase such Offered Assets, in
            which event the Acquiring Party and its Affiliates shall, subject to
            the other terms of this Agreement, be forever free to continue to
            own and operate such Offered Assets.

      4.2   SCOPE OF PROHIBITION. If any Party or its Affiliates engages in the
ownership or operation of a Restricted Business pursuant to any of the
exceptions described in Section 2.2 or 3.2, as applicable, the Party and its
Affiliates may not subsequently expand that portion of their business other than
pursuant to the exceptions contained in such Section 2.2 or 3.2. Except as
otherwise provided in this Agreement and the MLP Agreement, each Party and its
Affiliates shall be free to engage in any business activity whatsoever,
including those that may be in direct competition with the Teekay Entities or
the Partnership Group.

      4.3   ENFORCEMENT. Each Party agrees and acknowledges that the other
Parties do not have an adequate remedy at law for the breach by any such Party
of its covenants and agreements set forth in this Article IV, and that any
breach by any such Party of its covenants and agreements set forth in this
Article IV would result in irreparable injury to such other Parties. Each Party
further agrees and acknowledges that any other Party may, in addition to the
other remedies which may be available to such other Party, file a suit in equity
to enjoin such Party from such breach, and consent to the issuance of injunctive
relief to enforce the provisions of Article IV of this Agreement.

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -10-
<PAGE>

                                   ARTICLE V
                              RIGHTS OF FIRST OFFER

      5.1   RIGHTS OF FIRST OFFER.

            (a) The Partnership Group hereby grants Teekay a right of first
offer on any proposed Transfer or Re-Charter by any Partnership Group Member of
any Crude Oil Assets owned or acquired by any Partnership Group Member. The
Teekay Entities hereby grant the MLP a right of first offer on any proposed
Transfer or Re-Charter of any LNG Assets owned or acquired by any Teekay Entity.

            (b) The Parties acknowledge that all potential Transfers or
Re-Charters of Crude Oil Assets or LNG Assets pursuant to this Article V are
subject to obtaining any and all written consents of governmental authorities
and other non-affiliated third parties and to the terms of all existing
agreements in respect of such Crude Oil Assets or LNG Assets, as applicable.

      5.2   PROCEDURES FOR RIGHTS OF FIRST OFFER. In the event that a
Partnership Group Member or a Teekay Entity (as applicable, the "Transferring
Party") proposes to Transfer or Re-Charter any Crude Oil Assets or LNG Assets,
as applicable (the "Sale Assets"), prior to engaging in any negotiation for such
Transfer or Re-Charter with any non-affiliated third party or otherwise offering
to Transfer or Re-Charter the Sale Assets to any non-affiliated third party,
such Transferring Party shall give Teekay or the MLP, as applicable (the
"Potential Transferee"), written notice setting forth all material terms and
conditions (including, without limitation, the purchase price (in the event of a
Transfer) or the terms of the charter agreement (in the event of a Re-Charter)
and a description of the Sale Asset(s) on which such Transferring Party desires
to Transfer or Re-Charter the Sale Assets (the "Transfer Notice"). The material
terms set forth in the Transfer Notice shall have been approved, in any case
where a Partnership Group Member is the Transferring Party, by the Conflicts
Committee of the General Partner. The Transferring Party then shall be obligated
to negotiate in good faith for a 30-day period following the delivery by the
Transferring Party of the Transfer Notice (the "First Offer Negotiation Period")
to reach an agreement for the Transfer or Re-Charter of such Sale Assets to the
Potential Transferee or any of its Affiliates on the terms and conditions set
forth in the Transfer Notice. If no such agreement with respect to the Sale
Assets is reached during the First Offer Negotiation Period, and the
Transferring Party has not Transferred or Re-Chartered, or agreed in writing to
Transfer or Re-Charter, such Sale Assets to a third party within 180 days after
the end of the First Offer Negotiation Period on terms generally no less
favorable to the Transferring Party than those include in the Transfer Notice,
then the Transferring Party shall not thereafter Transfer or Re-Charter any of
the Sale Assets without first offering such assets to the applicable Potential
Transferee in the manner provided above.

                                   ARTICLE VI
                                 INDEMNIFICATION

      6.1   TEEKAY INDEMNIFICATION. Subject to the provisions of Section 6.2 and
Section 6.3, Teekay shall indemnify, defend and hold harmless the Partnership
Group from and against:

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -11-
<PAGE>

(a) any Covered Environmental Losses relating to the assets contributed by the
Teekay Entities to the Partnership Group prior to or on the Closing Date (the
"Contribution Assets") to the extent that Teekay is notified by the General
Partner of any such Covered Environmental Losses within five (5) years after the
Closing Date; (b) Losses to the Partnership Group arising from (i) the failure
of the Partnership Group, immediately after the Closing Date, to be the owner of
such valid leasehold interests or fee ownership interests in and to the
Contribution Assets as are necessary to enable the Partnership Entities to own
and operate the Contribution Assets in substantially the same manner that the
Contribution Assets were owned and operated by the Teekay Entities immediately
prior to the Closing Date or (ii) the failure of the Partnership Entities to
have on the Closing Date any consent or governmental permit necessary to allow
the Partnership Entities to own or operate the Contribution Assets in
substantially the same manner that the Contribution Assets were owned and
operated by the Teekay Entities immediately prior to the Closing Date, in each
of clauses (i) and (ii) above, to the extent that Teekay is notified by the
General Partner of such Losses within two (2) years after the Closing Date; and
(d) all federal, state, foreign and local income tax liabilities attributable to
the operation of the Contribution Assets prior to the Closing Date, including
any such income tax liabilities of the Teekay Entities that may result from the
consummation of the formation transactions for the Partnership Group and the
General Partner, but excluding any federal, state, foreign and local income
taxes reserved on the books of the Partnership Group on the Closing Date.

      6.2   LIMITATION REGARDING INDEMNIFICATION.

The aggregate liability of Teekay under Section 6.1(a) above shall not exceed
$10 million. Furthermore, no claim may be made against Teekay for
indemnification pursuant to Section 6.1(a) unless the aggregate dollar amount of
all claims for indemnification pursuant to such section shall exceed $500,000,
in which case Teekay shall be liable for claims for indemnification only to the
extent such aggregate amount exceeds $500,000.

      6.3   INDEMNIFICATION PROCEDURES.

            (a) The Partnership Group Members agree that within a reasonable
period of time after they become aware of facts giving rise to a claim for
indemnification pursuant to Section 6.1, they will provide notice thereof in
writing to Teekay specifying the nature of and specific basis for such claim.

            (b) Teekay shall have the right to control all aspects of the
defense of (and any counterclaims with respect to) any claims brought against
the Partnership Group that are covered by the indemnification set forth in
Section 6.1, including, without limitation, the selection of counsel,
determination of whether to appeal any decision of any court and the settling of
any such matter or any issues relating thereto; provided, however, that no such
settlement shall be entered into without the consent (which consent shall not be
unreasonably withheld) of the Partnership Group (with the concurrence of the
Conflicts Committee) unless it includes a full release of the Partnership Group
from such matter or issues, as the case may be.

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -12-
<PAGE>

            (c) The Partnership Group Members agree to cooperate fully with
Teekay with respect to all aspects of the defense of any claims covered by the
indemnification set forth in Section 6.1, including, without limitation, the
prompt furnishing to Teekay of any correspondence or other notice relating
thereto that the Partnership Group may receive, permitting the names of the
members of the Partnership Group to be utilized in connection with such defense,
the making available to Teekay of any files, records or other information of the
Partnership Group that Teekay considers relevant to such defense and the making
available to Teekay of any employees of the Partnership Group; provided,
however, that in connection therewith Teekay agrees to use reasonable efforts to
minimize the impact thereof on the operations of the Partnership Group and
further agrees to maintain the confidentiality of all files, records and other
information furnished by a Partnership Group Member pursuant to this Section
6.3. In no event shall the obligation of the Partnership Group to cooperate with
Teekay as set forth in the immediately preceding sentence be construed as
imposing upon the Partnership Group an obligation to hire and pay for counsel in
connection with the defense of any claims covered by the indemnification set
forth in this Article VI; provided, however, that the Partnership Group Members
may, at their own option, cost and expense, hire and pay for counsel in
connection with any such defense. Teekay agrees to keep any such counsel hired
by the Partnership Group reasonably informed as to the status of any such
defense (including providing such counsel with such information related to any
such defense as such counsel may reasonably request) but Teekay shall have the
right to retain sole control over such defense.

In determining the amount of any Loss for which any of the members of the
Partnership Group is entitled to indemnification under this Agreement, the gross
amount of the indemnification will be reduced by (i) any insurance proceeds
realized by the Partnership Group, and such correlative insurance benefit shall
be net of any incremental insurance premium that becomes due and payable by the
Partnership Group as a result of such claim, and (ii) all amounts recovered by
the Partnership Group under contractual indemnities from third Persons. The
Partnership hereby agrees to use commercially reasonable efforts to realize any
applicable insurance proceeds or amounts recoverable under such contractual
indemnities; provided, however, that the costs and expenses (including, without
limitation, court costs and reasonable attorneys' fees) of the Partnership Group
in connection with such efforts shall be promptly reimbursed by Teekay in
advance of any determination of whether such insurance proceeds or other amounts
will be recoverable.

                                  ARTICLE VII
                                 MISCELLANEOUS

      7.1   CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
subject to and governed by the laws of the State of New York, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another jurisdiction. Each party
hereby submits to the jurisdiction of the state and federal courts located in
the State of New York and to venue in New York, New York.

      7.2   NOTICE. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the mail,

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -13-
<PAGE>

addressed to the Person to be notified, postpaid, and registered or certified
with return receipt requested or by delivering such notice in person or by
private-courier, prepaid, or by telecopier to such party. Notice given by
personal delivery or mail shall be effective upon actual receipt. Couriered
notices shall be deemed delivered on the date the courier represents that
delivery will occur. Notice given by telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below such party's signature to this Agreement, or at such other address as such
party may stipulate to the other parties in the manner provided in this Section.

      7.3   ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein.

      7.4   TERMINATION. The provisions of Articles II, III, IV and V of this
Agreement (but not less than all of such Articles) may be terminated by (a)
Teekay upon notice to the other Parties upon a Change of Control of Teekay and
(b) the General Partner upon notice to the other Parties upon a Change of
Control of the General Partner.

      7.5   WAIVER; EFFECT OF WAIVER OR CONSENT. Any party hereto may (a) extend
the time for the performance of any obligation or other act of any other party
hereto or (b) waive compliance with any agreement or condition contained herein.
Except as otherwise specifically provided herein, any such extension or waiver
shall be valid only if set forth in a written instrument duly executed by the
party or parties to be bound thereby; provided, however, that the MLP and the
OLLC may not, without the prior approval of the Conflicts Committee, agree to
any extension or waiver of this Agreement that, in the reasonable discretion of
the General Partner, will adversely affect the holders of common units of the
MLP. No waiver or consent, express or implied, by any party of or to any breach
or default by any Person in the performance by such Person of its obligations
hereunder shall be deemed or construed to be a waiver or consent of or to any
other breach or default in the performance by such Person of the same or any
other obligations of such Person hereunder. Failure on the part of a party to
complain of any act of any Person or to declare any Person in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such party of its rights hereunder until the applicable statute of
limitations period has run.

      7.6   AMENDMENT OR MODIFICATION. This Agreement may be amended or modified
from time to time only by the written agreement of all the parties hereto;
provided, however, that the MLP and the OLLC may not, without the prior approval
of the Conflicts Committee, agree to any amendment or modification of this
Agreement that, in the reasonable discretion of the General Partner, will
adversely affect the holders of common units of the MLP.

      7.7   ASSIGNMENT. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -14-
<PAGE>

      7.8   COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.

      7.9   SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

      7.10  GENDER, PARTS, ARTICLES AND SECTIONS. Whenever the context requires,
the gender of all words used in this Agreement shall include the masculine,
feminine and neuter, and the number of all words shall include the singular and
plural. All references to Article numbers and Section numbers refer to Articles
and Sections of this Agreement.

      7.11  FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

      7.12  WITHHOLDING OR GRANTING OF CONSENT. Each party may, with respect to
any consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall
deem appropriate.

      7.13  LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party to this Agreement shall be required to take
any act, or fail to take any act, under this Agreement if the effect thereof
would be to cause such party to be in violation of any applicable law, statute,
rule or regulation.

      7.14  INCENTIVE FEES. Nothing in this Agreement shall prohibit the MLP
from paying to Teekay or any other Teekay Entity certain incentive fees that are
approved by the Conflicts Committee, in its sole discretion, and which relate to
LNG projects provided to the MLP by Teekay or other Teekay Entities.

      7.15  NEGOTIATION OF RIGHTS OF TEEKAY, LIMITED PARTNERS, ASSIGNEES, AND
THIRD PARTIES. The provisions of this Agreement are enforceable solely by the
parties to this Agreement, and no shareholder of Teekay and no limited partner,
member, assignee or other Person of the MLP or the OLLC shall have the right,
separate and apart from Teekay, the MLP or the OLLC, to enforce any provision of
this Agreement or to compel any party to this Agreement to comply with the terms
of this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                      -15-

<PAGE>

      IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.

                                       TEEKAY SHIPPING CORPORATION

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       Address for Notice:

                                       [                    ]
                                       Phone:  [            ]
                                       Fax:  [              ]
                                       Attention:  [        ]

                                       TEEKAY GP L.L.C.

                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       Address for Notice:

                                       [                    ]
                                       Phone:  [            ]
                                       Fax:  [              ]
                                       Attention:  [        ]

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                                      TEEKAY LNG OPERATING L.L.C.

                                      By:  Teekay LNG Partners L.P.,
                                           its sole member

                                           By:  Teekay GP L.L.C.,
                                                its general partner

                                           By:
                                                --------------------------------
                                                Name:
                                                Title:

                                      Address for Notice:

                                      [                    ]
                                      Phone:  [            ]
                                      Fax:  [              ]
                                      Attention:  [        ]

                                      TEEKAY LNG PARTNERS L.P.

                                      By:  Teekay GP L.L.C., its general partner

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                      Address for Notice:

                                      [                    ]
                                      Phone:  [            ]
                                      Fax:  [              ]
                                      Attention:  [        ]

                            TEEKAY LNG PARTNERS, L.P.
                                OMNIBUS AGREEMENT
                                 SIGNATURE PAGE

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