---

PROSPECTUS

5,500,000 Common Units

Representing Limited Partner Interests

Citigroup    

UBS Investment Bank    

SUMMARY

      This summary highlights information contained elsewhere in this prospectus. Unless we otherwise specify, all references to information and data in this prospectus about our business and fleet refer to the business and fleet that will be contributed to us on the closing of this offering. You should read the entire prospectus carefully, including the historical and pro forma financial statements and the notes to those financial statements. The information presented in this prospectus assumes (a) an initial public offering price of $20.00 per unit and (b) that the underwriters’ over-allotment option is not exercised. You should read “— Summary of Risk Factors” and “Risk Factors” for information about important factors that you should consider before buying the common units. We include a glossary of some of the terms used in this prospectus in Appendix C. Unless otherwise indicated, all references to “dollars” and “$” in this prospectus are to, and amounts are presented in, U.S. Dollars.

Teekay LNG Partners L.P.

      We are an international provider of liquefied natural gas (or LNG ) and crude oil marine transportation services. We were formed by Teekay Shipping Corporation, the world’s largest owner and operator of medium-sized crude oil tankers, as part of its strategy to expand its operations in the LNG shipping sector. We plan to leverage the expertise, relationships and reputation of Teekay Shipping Corporation and its affiliates to pursue significant growth opportunities in this sector.

      Our fleet consists of three LNG carriers and five Suezmax class crude oil tankers. All of our vessels are double-hulled, other than the Granada Spirit, a Suezmax tanker that Teekay Shipping Corporation has agreed to purchase from us upon delivery of our new Suezmax tanker scheduled for the third quarter of 2005.

      Our fleet is young, with an average age of approximately one year for our LNG carriers and approximately three years for our Suezmax tankers (excluding the Granada Spirit ), compared to world averages of 13.7 years and 9.3 years, respectively, as of October 1, 2004.

      All of our vessels operate under long-term, fixed-rate time charters with major energy and utility companies, other than the Granada Spirit. The average remaining term for our long-term charters is approximately 20 years for our LNG carriers and approximately 17 years for our Suezmax tankers, subject, in certain circumstances, to termination and vessel purchase rights. Until its sale, the Granada Spirit will operate on a short-term, fixed-rate time charter to Teekay Shipping Corporation.

      We also have contracted to acquire an additional new LNG carrier and an additional new Suezmax tanker, which are scheduled for delivery in the fourth quarter of 2004 and the third quarter of 2005. In addition, we have agreed to acquire from Teekay Shipping Corporation all of its interest in three new LNG carriers, which interest will be no less than 70%. We expect to take delivery of the three LNG newbuildings between the fourth quarter of 2006 and the first half of 2007. Upon their delivery, the three LNG carriers will provide transportation services to Ras Laffan Liquefied Natural Gas Co. Limited (II) (or RasGas II ), a joint venture between Qatar Petroleum and ExxonMobil RasGas Inc., a subsidiary of ExxonMobil Corporation, established for the purpose of expanding LNG production in Qatar.

      All of our newbuildings will be double-hulled and will operate under long-term, fixed-rate time charters with major energy and utility companies. The term of each of our charters for our LNG and Suezmax newbuildings is 20 years from delivery of the vessel.

      Our fleet was established by Naviera F. Tapias S.A. (or Tapias ), a Spanish company founded in 1991. Teekay Shipping Corporation acquired Tapias in April 2004 and changed its name to Teekay Shipping Spain S.A. (or Teekay Spain ).

Business Opportunities

      We believe the following industry dynamics create a favorable environment in which to expand our LNG business:

	•	Strong increase in demand for LNG vessels. Natural gas represented approximately 23% of world energy consumption in 2001 and is the fastest-growing primary energy source according to the U.S. Department of Energy. Due to the vast distances between many areas of natural gas production and consumption and related impracticalities of building a pipeline, seaborne transportation of LNG provides either the only or the most cost-effective means of transporting natural gas to many consuming regions. To meet projected LNG shipping demand, the International Energy Agency estimates that the world LNG carrier fleet must expand to approximately 296 vessels by 2010 from its current size of 169 existing vessels and 102 vessels under order or construction as of October 1, 2004.
	•	Globalization of LNG trade routes. We believe more opportunities to transport LNG are arising outside traditional trade routes. We expect the Middle East and Africa to continue to be increasingly important LNG exporting areas and Russia, with its vast natural gas reserves, to become an LNG exporter. We also expect Europe and North America to be among the major LNG importers. We believe that the increase in the number and scope of LNG trade routes will result in greater accessibility to LNG and lead to increased LNG demand.
	•	Increasing ownership of world LNG carrier fleet by independent owners. Until recently, major private and state-owned energy companies owned most of the world LNG carrier fleet. We believe that the increasing ownership of the world LNG fleet by independent owners is attributable in part to the desire of some major energy companies to limit their commitment to:

	•	the transportation business, which is non-core to their operations, and
	•	the cost of financing new LNG carriers in addition to the high construction costs of LNG facilities.

	•	Stringent customer standards favor high-quality operators. Major energy companies are highly selective in their choice of LNG transportation partners and impose increasingly stringent pre-qualification operational and financial standards that LNG vessel operators must meet prior to bidding on nearly all significant LNG transportation contracts. We believe that these rigorous and comprehensive standards will increase our ability, relative to less qualified or experienced operators, to compete effectively for new LNG contracts.

Business Strategies

      Our primary business objective is to increase distributable cash flow per unit by executing the following strategies:

	•	Continue our practice of acquiring LNG carriers after long-term, fixed-rate time charters have been awarded for an LNG project, rather than ordering vessels on a speculative basis.
	•	Expand our LNG operations globally by selectively targeting long-term, fixed-rate time charters, joint ventures and acquisitions of vessels or other LNG shipping businesses.
	•	Leverage our own and Teekay Shipping Corporation’s operational expertise to create a sustainable competitive advantage with consistent delivery of superior customer service by maintaining high reliability, safety, environmental and quality standards.
	•	Manage our fleet of Suezmax tankers to provide stable cash flows and a source of funding for expansion of our LNG operations.

Competitive Strengths

      We believe the following competitive strengths will enable us to successfully execute our business strategies:

	•	We have a strategic platform from which to expand our presence in the rapidly growing LNG shipping sector.
	•	Our management and personnel of Teekay Shipping Corporation subsidiaries who will provide services to us have extensive experience in fleet expansion.
	•	We believe our relationship with Teekay Shipping Corporation and its prominence and extensive customer relationships in the shipping industry will significantly enhance our growth opportunities.
	•	We will supplement our operational experience through continued access to Teekay Shipping Corporation’s expertise in various functions critical to our vessel operations.
	•	We have financial flexibility to pursue acquisitions and other expansion opportunities through additional debt borrowings and the issuance of additional partnership units.

Summary of Risk Factors

      An investment in our common units involves risks associated with our business, our partnership structure and the tax characteristics of our common units. Those risks are described under the caption “Risk Factors” beginning on page 20 and include:

Risks Inherent in Our Business

	•	We may not have sufficient cash from operations to enable us to pay the minimum quarterly distribution on our common units following the establishment of cash reserves and payment of fees and expenses.
	•	The assumptions underlying the forecast of cash available for distribution we include in “Cash Available for Distribution — Forecasted Available Cash From Operating Surplus” are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those forecasted.
	•	We must make substantial capital expenditures to maintain the operating capacity of our fleet, which will reduce our cash available for distribution. In addition, each quarter our general partner is required to deduct estimated maintenance capital expenditures from operating surplus, which may result in less cash available to unitholders than if actual maintenance capital expenditures were deducted.
	•	We will be required to make substantial capital expenditures to expand the size of our fleet. We generally will be required to make significant installment payments for acquisitions of newbuilding vessels prior to their delivery and generation of revenue. Depending on whether we finance our expenditures through cash from operations or by issuing debt or equity securities, our ability to make cash distributions may be diminished or our financial leverage could increase or our unitholders could be diluted.
	•	Our substantial debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.
	•	We derive a substantial majority of our revenues from three customers, and the loss of any customer, time charter or vessel could result in a significant loss of revenues and cash flow.
	•	We depend on Teekay Shipping Corporation to assist us in operating our business, competing in our markets, and providing interim financing for three new LNG carriers.
	•	Our growth depends on continued growth in demand for LNG and LNG shipping.

	•	Growth of the LNG market may be limited by infrastructure constraints.
	•	Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition.
	•	Delays in deliveries of newbuildings could harm our operating results and lead to the termination of related time charters.
	•	We may have more difficulty entering into long-term, fixed-rate time charters if an active short-term or spot LNG shipping market develops.
	•	Over time, vessel values may fluctuate substantially and, if these values are lower at a time when we are attempting to dispose of a vessel, we may incur a loss.
	•	We may be unable to make or realize expected benefits from acquisitions, and implementing our growth strategy through acquisitions may harm our business, financial condition and operating results.
	•	Terrorist attacks, increased hostilities or war could lead to further economic instability, increased costs and disruption of our business.
	•	Our substantial operations outside the United States expose us to political, governmental and economic instability, which could harm our operations.
	•	Our insurance may be insufficient to cover losses that may occur to our property or result from our operations.
	•	The marine energy transportation industry is subject to substantial environmental and other regulations, which may significantly limit our operations or increase our expenses.
	•	Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results.

Risks Inherent in an Investment in Us

	•	Teekay Shipping Corporation and its affiliates may engage in competition with us.
	•	Our general partner and its other affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to your detriment.
	•	Our partnership agreement limits our general partner’s fiduciary duties to our unitholders and restricts the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty.
	•	Fees and cost reimbursements, which our general partner will determine for services provided to us and certain of our subsidiaries, will be substantial and will reduce our cash available for distribution to you.
	•	Even if unitholders are dissatisfied, they cannot remove our general partner without its consent.
	•	The control of our general partner may be transferred to a third party without unitholder consent.
	•	You will experience immediate and substantial dilution of $5.45 per common unit.
	•	We may issue additional common units without your approval, which would dilute your ownership interests.
	•	In establishing cash reserves, our general partner may reduce the amount of cash available for distribution to you.
	•	We have been organized as a limited partnership under the laws of the Republic of the Marshall Islands, which does not have a well-developed body of partnership law.

	•	Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management. Please read “Enforcement of Civil Liabilities.”

Tax Risks

	•	You may be required to pay U.S. taxes on your share of our income even if you do not receive any cash distributions from us.
	•	U.S. tax gain or loss on the disposition of our common units could be different than expected.
	•	The after-tax benefit of an investment in the common units may be reduced if we are not treated as a partnership for U.S. federal income tax purposes.
	•	If the IRS were to treat us as a corporation, we may also be considered a passive foreign investment company, which may result in adverse U.S. tax consequences to you.
	•	You may be subject to income tax in one or more non-U.S. countries as a result of owning our common units if, under the laws of any such country, we are considered to be carrying on business there. Such laws may require you to file a tax return with and pay taxes to those countries. Any foreign taxes imposed on us or any of our subsidiaries will reduce our cash available for distribution to you.

The Transactions

General

      We were recently formed as a Marshall Islands limited partnership to hold interests in entities that own and operate certain LNG carriers and Suezmax oil tankers operated by Teekay Spain and its subsidiaries.

      Prior to the closing of this offering, Teekay Shipping Corporation will contribute $196.4 million to Teekay Spain and loan it $99.3 million. Teekay Spain will use the $295.7 million in funds from Teekay Shipping Corporation to repay debt associated with two of its LNG carriers.

      At the closing of this offering, the following transactions will occur:

	•	Teekay Shipping Corporation will contribute to us:

	•	the capital stock and notes receivable of Teekay Luxembourg S.a.r.l., which owns Teekay Spain; and
	•	the capital stock of its subsidiary that owns the Granada Spirit .

	•	We will issue to Teekay Shipping Corporation 6,705,029 common units and 12,205,029 subordinated units, representing a 75.9% limited partner interest in us;
	•	We will issue to Teekay GP L.L.C., a wholly owned subsidiary of Teekay Shipping Corporation, a 2% general partner interest in us and all of our incentive distribution rights, which will entitle our general partner to increasing percentages of the cash we distribute in excess of $0.4625 per unit per quarter;
	•	We will issue 5,500,000 common units to the public in this offering, representing a 22.1% limited partner interest in us, and will use the net proceeds as described under “Use of Proceeds”;
	•	We will enter into an omnibus agreement with Teekay Shipping Corporation, our general partner and others governing, among other things:

	•	when we and Teekay Shipping Corporation may compete with each other; and
	•	certain rights of first offer on LNG carriers and Suezmax tankers.

	•	We and certain of our operating subsidiaries will enter into services agreements with certain subsidiaries of Teekay Shipping Corporation pursuant to which the Teekay Shipping Corporation subsidiaries will agree to provide to us administrative services and to such operating subsidiaries advisory, ship management, technical and administrative services;
	•	We will enter into a joint venture with a company controlled by Mr. Fernando Tapias, the former controlling shareholder of Tapias, to pursue LNG shipping opportunities relating to Spain;
	•	We will enter into an agreement with Teekay Shipping Corporation to purchase all of its interest in three LNG newbuildings and the related 20-year time charters upon their scheduled deliveries in the fourth quarter of 2006 and the first half of 2007;
	•	We will enter into a short-term, fixed-rate time charter and vessel sales agreement with a subsidiary of Teekay Shipping Corporation for the Granada Spirit, our only single-hulled Suezmax tanker; and
	•	We will enter into a new $100 million credit facility.

      We believe that conducting our operations through a publicly traded limited partnership will offer us the following advantages:

	•	access to the public equity and debt capital markets;
	•	a lower cost of capital for expansion and acquisitions; and
	•	an enhanced ability to use equity securities as consideration in future acquisitions.

      References in this prospectus to “Teekay LNG Partners,” “we,” “our,” “us” or like terms when used in a historical context refer to the assets of Teekay Shipping Corporation and its subsidiaries, including Teekay Spain, that are being contributed to Teekay LNG Partners L.P. and its subsidiaries in connection with this offering. When used in the present tense or prospectively, those terms refer, depending on the

      References in this prospectus to “Teekay Shipping Corporation” refer, depending upon the context, to Teekay Shipping Corporation or any one or more of its subsidiaries or to Teekay Shipping Corporation and any one or more of its subsidiaries.

Holding Company Structure

      We are a holding entity and will conduct our operations and business through subsidiaries, as is common with publicly traded limited partnerships, to maximize operational flexibility. Initially, Teekay LNG Operating L.L.C., a limited liability company organized in the Marshall Islands, will be our only directly owned subsidiary and will conduct all of our operations through itself and its subsidiaries.

Organizational Structure After the Transactions

      The following diagram depicts our organizational structure after giving effect to the transactions:

Public Common Units			22.1	%
Teekay Shipping Corporation’s Common Units			26.9
Teekay Shipping Corporation’s Subordinated Units			49.0
General Partner Interest			2.0
			100.0	%

Management of Teekay LNG Partners L.P.

      Our general partner, Teekay GP L.L.C., a Marshall Islands limited liability company, will manage our operations and activities. All of the executive officers and directors of Teekay GP L.L.C. also serve as executive officers or directors of Teekay Shipping Corporation. For more information about these individuals, please read “Management — Directors, Executive Officers and Key Employees.”

      Unlike shareholders in a publicly traded corporation, our unitholders will not be entitled to elect our general partner or its directors.

      Our general partner will not receive any management fee or other compensation in connection with its management of our business, but it will be entitled to be reimbursed for all direct and indirect expenses incurred on our behalf. Our general partner will also be entitled to distributions on its general partner interest and, if specified requirements are met, on its incentive distribution rights. Please read “Certain Relationships and Related Party Transactions” and “Management — Reimbursement of Expenses of Our General Partner.”

      We and certain of our operating subsidiaries have entered into, and may enter into additional, services agreements with certain subsidiaries of Teekay Shipping Corporation relating to the provision to us of administrative services and to such operating subsidiaries of advisory, ship management, technical and administrative services. Please read “Certain Relationships and Related Party Transactions — Advisory and Administrative Services Agreements.”

Principal Executive Offices and Internet Address; SEC Filing Requirements

      Our principal executive offices are located at TK House, Bayside Executive Park, West Bay Street and Blake Road, Nassau, Commonwealth of The Bahamas, and our phone number is (242)502-8820. Our website is located at http://www.TeekayLNG.com. We expect to make our periodic reports and other information filed with or furnished to the SEC available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. Please see “Where You Can Find More Information” for an explanation of our reporting requirements as a foreign private issuer.

Summary of Conflicts of Interest and Fiduciary Duties

      Teekay GP L.L.C., our general partner, has a legal duty to manage us in a manner beneficial to our unitholders. This legal duty is commonly referred to as a “fiduciary” duty. However, because Teekay GP L.L.C. is owned by Teekay Shipping Corporation, the officers and directors of Teekay GP L.L.C. also have fiduciary duties to manage the business of Teekay GP L.L.C. in a manner beneficial to Teekay Shipping Corporation. In addition:

	•	all of the executive officers and directors of Teekay GP L.L.C. also serve as executive officers or directors of Teekay Shipping Corporation;
	•	Teekay Shipping Corporation and its other affiliates may engage in competition with us; and
	•	we and certain of our operating subsidiaries have entered into arrangements, and may enter into additional arrangements, with Teekay Shipping Corporation and certain of its subsidiaries relating to the sale of certain vessels, the purchase of additional vessels, the provision of certain services and other matters.

      Please read “Management — Directors, Executive Officers and Key Employees” and “Certain Relationships and Related Party Transactions.”

      As a result of these relationships, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and Teekay Shipping Corporation and its other affiliates, including our

      Our partnership agreement limits the liability and reduces the fiduciary duties of our general partner to our unitholders. Our partnership agreement also restricts the remedies available to unitholders for actions that might otherwise constitute breaches of our general partner’s fiduciary duty. By purchasing a common unit, you are treated as having consented to various actions contemplated in the partnership agreement and conflicts of interest that might otherwise be considered a breach of fiduciary or other duties under applicable law. For a description of our other relationships with our affiliates, please read “Certain Relationships and Related Party Transactions.”

The Offering

 

Common units offered to the public		5,500,000 common units.
		6,325,000 common units if the underwriters exercise their over-allotment option in full.
Units outstanding after this offering		12,205,029 common units and 12,205,029 subordinated units, each representing a 49% limited partner interest in us, assuming no exercise of the over-allotment option.
Use of proceeds		We intend to use the net proceeds of this offering to:
		• repay $99.3 million of debt we owe to Teekay Shipping Corporation; and
		• pay $3.0 million of estimated expenses associated with this offering and the related transactions.
		The net proceeds from any exercise of the underwriters’ over-allotment option will be used to repay additional debt under our ship financing arrangements.
Cash distributions		We intend to make minimum quarterly distributions of $0.4125 per common unit to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to our general partner. In general, we will pay any cash distributions we make each quarter in the following manner:
		• first, 98% to the holders of common units and 2% to our general partner, until each common unit has received a minimum quarterly distribution of $0.4125 plus any arrearages from prior quarters;
		• second, 98% to the holders of subordinated units and 2% to our general partner, until each subordinated unit has received a minimum quarterly distribution of $0.4125; and
		• third, 98% to all unitholders, pro rata, and 2% to our general partner, until each unit has received an aggregate distribution of $0.4625.
		If cash distributions exceed $0.4625 per unit in a quarter, our general partner will receive increasing percentages, up to 50%, of the cash we distribute in excess of that amount. We refer to these distributions as “incentive distributions.”
		We must distribute all of our cash on hand at the end of each quarter, less reserves established by our general partner to provide for the proper conduct of our business, to comply with any applicable debt instruments or to provide funds for future distributions. We refer to this cash as “available cash,” and we define its meaning in our partnership agreement and in the glossary of terms attached as Appendix C. The amount of available cash may be greater than or less than the aggregate

		amount of the minimum quarterly distribution to be distributed on all units.
		Our pro forma, as adjusted available cash from operating surplus generated during 2003 and the six months ended June 30, 2004, on a pro forma basis assuming this offering and related transactions occurred on January 1, 2003, would have been $25.4 million and $25.0 million, respectively. The pro forma, as adjusted available cash from operating surplus for 2003 would have been sufficient to allow us to pay the full minimum quarterly distribution on all of our common units, but only 23.6% of the minimum quarterly distribution on our subordinated units. The pro forma, as adjusted available cash from operating surplus for the six months ended June 30, 2004 would have been sufficient to allow us to pay the full minimum quarterly distribution on all of our units. Please read “Cash Available for Distribution — Pro Forma, As Adjusted Available Cash From Operating Surplus” and Appendix D to this prospectus.
		We have included a forecast of our cash available for distribution for the 12 months ending December 31, 2005 in “Cash Available for Distribution — Forecasted Available Cash From Operating Surplus.” We believe, based on our financial forecast and related assumptions, that we will have sufficient cash from operations, including working capital borrowings, to enable us to pay the full minimum quarterly distribution of $0.4125 on all units for each quarter through December 31, 2005.
Subordinated units		Teekay Shipping Corporation will initially own all of our subordinated units. The principal difference between our common units and subordinated units is that in any quarter during the subordination period the subordinated units are entitled to receive the minimum quarterly distribution of $0.4125 only after the common units have received the minimum quarterly distribution and arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages. The subordination period will end once we meet the financial tests in the partnership agreement, but it generally cannot end before March 31, 2010. These financial tests require us to have earned and paid the minimum quarterly distribution on all of our outstanding units for three consecutive, non-overlapping four-quarter periods.
		When the subordination period ends, all remaining subordinated units will convert into common units on a one-for-one basis, and the common units will no longer be entitled to arrearages.
Early conversion of subordinated units		If we meet the financial tests in the partnership agreement for any three consecutive, non-overlapping four-quarter periods ending on or after March 31, 2008, 25% of the subordinated units will convert into common units. If we meet these tests for any three consecutive, non- overlapping four-quarter periods ending on or after March 31, 2009, an additional 25% of the

		subordinated units will convert into common units. The early conversion of the second 25% of the subordinated units may not occur until at least one year after the early conversion of the first 25% of subordinated units.
Issuance of additional units		In general, during the subordination period we may issue up to 6,102,514 additional common units, or 50% of the aggregate common units outstanding immediately after this offering, without obtaining unitholder approval. We can also issue an unlimited number of common units for the acquisition of any of the interests in the RasGas II vessels or for acquisitions, capital improvements and debt repayments that, in each case, increase cash flow from operations per unit on an estimated pro forma basis and for the redemption of outstanding common units if the redemption price equals the net proceeds per unit of the additional units, before expenses, to us.
Limited voting rights		Our general partner will manage and operate us. Unlike the holders of common stock in a corporation, you will have only limited voting rights on matters affecting our business. You will have no right to elect our general partner or the directors of our general partner on an annual or other continuing basis. Our general partner may not be removed except by a vote of the holders of at least 66 2/3% of the outstanding units, including any units owned by our general partner and its affiliates, voting together as a single class. As a result, you will initially be unable to remove our general partner without its consent because Teekay Shipping Corporation will own sufficient units upon completion of this offering to be able to prevent the general partner’s removal. Please read “The Partnership Agreement — Voting Rights.”
Limited call right		If at any time our general partner and its affiliates own more than 80% of the outstanding common units, our general partner has the right, but not the obligation, to purchase all, but not less than all, of the remaining common units at a price not less than the then-current market price of the common units. Our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon the exercise of this limited call right.
Estimated ratio of taxable income to distributions		We estimate that if you hold the common units you purchase in this offering through December 31, 2007, you will be allocated, on a cumulative basis, an amount of U.S. federal taxable income for that period that will be           % or less of the cash distributed to you with respect to that period. For example, if you receive an annual distribution of $           per unit, we estimate that your allocable U.S. federal taxable income per year will be no more than $           per unit. Please read “Material U.S. Federal Income Tax Consequences — Consequences of Unit Ownership — Ratio of Taxable Income to Distributions” for the basis of this estimate.

Material U.S. federal income tax consequences		For a discussion of other material federal income tax consequences that may be relevant to prospective unitholders who are individual citizens or residents of the United States, please read “Material U.S. Federal Income Tax Consequences.”
Exchange listing		We intend to apply for the listing of our common units on the New York Stock Exchange under the symbol “TGP.”

Summary Historical and Pro Forma Financial and Operating Data

      The following table presents summary:

	•	historical financial and operating data of Teekay Spain, which was named Naviera F. Tapias S.A. prior to its acquisition by Teekay Shipping Corporation through its subsidiary, Teekay Luxembourg S.a.r.l. (or Luxco ), on April 30, 2004; and
	•	pro forma financial and operating data of Teekay LNG Partners L.P.

      The summary historical financial and operating data has been prepared on the following basis:

	•	the historical financial and operating data of Teekay Spain excludes financial information related to three businesses previously held in separate subsidiaries and unrelated to the marine transportation of LNG and crude oil, which were disposed of prior to Teekay Shipping Corporation’s acquisition of Teekay Spain;
	•	the historical financial and operating data of Teekay Spain as at and for the years ended December 31, 2002 and 2003 are derived from the audited consolidated financial statements of Teekay Spain included elsewhere in this prospectus;
	•	the historical financial and operating data of Teekay Spain as at and for the years ended December 31, 1999, 2000 and 2001 are derived from the unaudited consolidated financial statements of Teekay Spain, which are not included in this prospectus;
	•	the historical financial and operating data of Teekay Spain for the six months ended June 30, 2003 and the four months ended April 30, 2004 are derived from the unaudited interim consolidated financial statements of Teekay Spain included elsewhere in this prospectus; and
	•	the historical financial and operating data of Teekay Spain as at June 30, 2004 and for the two months ended June 30, 2004 reflect the acquisition of Teekay Spain by Teekay Shipping Corporation and are derived from the unaudited consolidated interim financial statements of Teekay Spain included elsewhere in this prospectus.

      The unaudited pro forma financial and operating data of Teekay LNG Partners L.P. give pro forma effect to:

	•	the acquisition of Teekay Spain;
	•	the contribution by Teekay Shipping Corporation to us of the capital stock and notes receivable of Luxco and to Teekay Spain of $196.4 million in cash;
	•	the loan of $99.3 million to Teekay Spain by Teekay Shipping Corporation;
	•	the completion of this offering; and
	•	the use of the net proceeds of this offering and Teekay Shipping Corporation’s cash contribution to repay indebtedness as described in “Use of Proceeds.”

      The pro forma financial data presented for the year ended December 31, 2003 and as at and for the six months ended June 30, 2004 are derived from our unaudited pro forma consolidated financial statements. The pro forma income statement data for the year ended December 31, 2003 and for the six months ended June 30, 2004 assume this offering and related transactions occurred on January 1, 2003. The pro forma balance sheet data assume this offering and related transactions occurred at June 30, 2004. A more complete explanation of the pro forma data can be found in our unaudited pro forma consolidated financial statements included with this prospectus.

      The following table presents two financial measures, net voyage revenues and EBITDA, which we use in our business. These financial measures are not calculated or presented in accordance with U.S. generally accepted accounting principles (or GAAP ). We explain these measures below and reconcile them to their most directly comparable financial measures calculated and presented in accordance with GAAP in “— Non-GAAP Financial Measures” below.

      Because drydocking expenditures are more extensive in nature than normal routine maintenance, we capitalize and amortize them for a given vessel from the completion of a drydocking to the estimated completion of the next drydocking. For more information about our accounting treatment of drydocking expenditures, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Important Financial and Operational Terms and Concepts — Drydocking” and “— Depreciation and Amortization.”

      To make the summary historical financial and operating data more comparable, our historical operating results do not include the historical results of Luxco for the three months ended June 30, 2004. In the three months ended June 30, 2004, Luxco had no revenues, expenses or income, or assets or liabilities, other than:

	•	$312.3 million of advances (including accrued interest) from Teekay Shipping Corporation that Luxco used to purchase Teekay Spain;
	•	$2.4 million of interest expense related to the advances;
	•	$3.8 million of unrealized foreign exchange losses related to the advances, which are Euro-denominated;
	•	$10.0 million in cash and cash equivalents; and
	•	its ownership interest in Teekay Spain.

The $312.3 million of advances, $2.4 million of interest expense and $3.8 million of foreign exchange losses are eliminated in our pro forma summary financial data as intercompany amounts. For more information on Luxco, please read the unaudited consolidated financial statements of Luxco included elsewhere in this prospectus.

      The following table should be read together with, and is qualified in its entirety by reference to, the historical and unaudited pro forma consolidated financial statements and the accompanying notes included elsewhere in this prospectus. The table should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

			Historical																																Pro Forma
																							Six				Four				Two								Six
																							Months				Months				Months				Year				Months
			Years Ended December 31,																				Ended				Ended				Ended				Ended				Ended
																							June 30,				April 30,				June 30,				Dec. 31,				June 30,
			1999				2000				2001				2002				2003				2003				2004				2004				2003				2004
			(unaudited)												(audited)								(unaudited)												(unaudited)
			(in thousands, except per unit and fleet data)
Income Statement Data:
Voyage revenues			$	46,032			$	52,217			$	60,326			$	59,866			$	86,709			$	39,551			$	40,718			$	17,453			$	86,709			$	58,171
Operating expenses:
	Voyage expenses(1)			3,042				4,304				5,092				5,334				4,911				2,905				1,842				1,462				4,911				3,304
	Vessel operating expenses(2)			12,910				10,883				12,403				16,104				26,440				11,969				10,302				4,584				26,440				14,886
	Depreciation and amortization			14,974				14,803				16,094				17,689				23,390				10,825				8,585				6,426				29,920				17,437
	General and administrative			3,509				3,967				5,061				6,501				8,799				4,009				2,103				808				8,799				2,957
Total operating expenses				34,435				33,957				38,650				45,628				63,540				29,708				22,832				13,280				70,070				38,584
Income from vessel operations				11,597				18,260				21,676				14,238				23,169				9,843				17,886				4,173				16,639				19,587
Interest expense				(10,393	)			(15,625	)			(20,104	)			(18,109	)			(34,862	)			(14,602	)			(21,475	)			(8,632	)			(11,058	)			(18,623	)
Interest income				93				1,278				3,752				5,248				8,431				3,052				8,692				3,473				8,431				12,183
Foreign currency exchange gain (loss)(3)				(4,427	)			(179	)			3,462				(44,310	)			(71,502	)			(43,787	)			18,010				(6,189	)			(71,502	)			11,821
Interest rate swaps gain (loss)(4)				—				—				(7,618	)			(71,400	)			14,715				(26,829	)			3,985				—				12,818				(308	)
Other income (loss)(5)				11,322				3,615				5,327				563				617				1,951				(10,934	)			604				(7,660	)			(10,582	)
Net income (loss) before change in accounting principle				8,192				7,349				6,495				(113,770	)			(59,432	)			(70,372	)			16,164				(6,571	)			(52,332	)			14,078
Change in accounting principle(6)				—				—				(4,366	)			—				—				—				—				—				—				—
Net income (loss)			$	8,192			$	7,349			$	2,129			$	(113,770	)		$	(59,432	)		$	(70,372	)		$	16,164			$	(6,571	)		$	(52,332	)		$	14,078
Pro forma net income (loss) per unit (basic and diluted)																																			$	(2.10	)		$	0.57
Balance Sheet Data (at end of period):
Cash and marketable securities			$	14,136			$	24,185			$	24,625			$	20,141			$	22,533			$	15,795			$	11,289			$	15,362							$	25,409
Restricted cash deposits(7)				8,900				29,243				70,051				106,399				398,038				120,646				385,564				393,403								393,403
Vessels and equipment(8)				167,909				277,076				368,951				705,010				602,550				736,885				602,055				823,400								823,400
Total assets(7)				207,089				357,247				491,058				882,604				1,069,081				934,985				1,021,695				1,476,184								1,478,928
Total debt and capital lease obligations(7)				169,507				317,710				444,865				882,027				1,129,426				965,274				1,072,379				1,089,247								827,963
Total stockholders’/partners’ equity (deficit)				33,625				34,673				29,849				(106,105	)			(164,809	)			(175,818	)			(144,186	)			284,622								583,075
Cash Flow Data:
Net cash provided by (used in):
	Operating activities		$	19,659			$	19,695			$	24,770			$	20,418			$	18,318			$	7,004			$	14,808			$	3,596
	Financing activities			(20,249	)			11,623				31,852				176,316				(277,616	)			28,003				(25,846	)			1,647
	Investing activities			(1,838	)			(23,304	)			(55,695	)			(199,218	)			262,766				(40,055	)			901				(4,965	)
Other Financial Data:
Net voyage revenues			$	42,990			$	47,913			$	55,234			$	54,532			$	81,798			$	36,646			$	38,876			$	15,991			$	81,798			$	54,867
EBITDA(9)				31,373				36,556				33,912				(81,056	)			(6,578	)			(48,191	)			36,887				4,441				(16,258	)			36,988
Capital expenditures:
	Expenditures for vessels and equipment			6,159				173,186				110,097				186,755				133,628				35,791				5,522				4,965				83,248				10,487
	Expenditures for drydocking			830				784				—				984				4,711				3,884				—				—				4,711				—
LNG Fleet Data:
Calendar-ship-days(10)				—				—				—				93				518				181				242				122				518				364
Average age of our fleet (in years at end of period)				—				—				—				0.3				0.8				0.7				1.2				1.3				0.8				1.3
Vessels at end of period				—				—				—				1.0				2.0				1.0				2.0				2.0				2.0				2.0
Suezmax Fleet Data:
Calendar-ship-days(10)				1,825				1,737				2,085				2,190				2,190				1,086				726				366				2,190				1,092
Average age of our fleet (in years at end of period)				6.2				4.0				4.3				5.3				6.3				5.8				6.6				6.8				6.3				6.8
Vessels at end of period				5.0				7.0				6.0				6.0				6.0				6.0				6.0				6.0				6.0				6.0