Bond Alterra Infrastructure 6% ( US87901BAA08 ) in USD

Issuer Alterra Infrastructure
Market price 98.8417 %  ▼ 
Country  United States
ISIN code  US87901BAA08 ( in USD )
Interest rate 6% per year ( payment 4 times a year)
Maturity 30/07/2019 - Bond has expired



Prospectus brochure of the bond Altera Infrastructure US87901BAA08 in USD 6%, expired


Minimal amount /
Total amount /
Cusip 87901BAA0
Detailed description Altera Infrastructure is a global midstream energy infrastructure company providing transportation, storage, and processing services for crude oil, natural gas, and natural gas liquids.

The Bond issued by Alterra Infrastructure ( United States ) , in USD, with the ISIN code US87901BAA08, pays a coupon of 6% per year.
The coupons are paid 4 times per year and the Bond maturity is 30/07/2019







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Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-196098 and 333-196098-01
CALCULATION OF REGISTRATION FEE


Title of Each Class of
Proposed Maximum Aggregate
Amount of
Securities to be Registered(1)

Offering Price

Registration Fee(2)
6.00% Notes due 2019

$316,250,000(3)

$40,733


(1)
The securities registered herein are offered pursuant to an automatic shelf registration statement on Form F-3 (Registration Nos. 333-
196098, 333-196098-01) filed by Teekay Offshore Partners L.P. and Teekay Offshore Finance Corp. on May 20, 2014.
(2)
This filing fee is calculated in accordance with Rule 457(r) and is made in accordance with Rule 456(b) under the Securities Act of 1933, as
amended.
(3)
Includes an additional $41,250,000 aggregate principal amount of 6.00% Notes due 2019 that the underwriters have an option to purchase.
Table of Contents


PROSPECTUS SUPPLEMENT
(To Prospectus dated May 20, 2014)
$275,000,000

Teekay Offshore Partners L.P.
Teekay Offshore Finance Corp.
6.00% Notes due 2019


We are offering $275,000,000 aggregate principal amount of our 6.00% Notes due July 30, 2019 (the Notes or our Notes).
Teekay Offshore Finance Corp. is acting as co-issuer of the Notes.
We have granted the underwriters the option to purchase, exercisable during the 30-day period beginning on the date of this prospectus supplement, up to an
additional $41,250,000 aggregate principal amount of the Notes.
The Notes will bear interest from the date of original issue until maturity at a rate of 6.00% per year. Interest will be payable quarterly in arrears on the 30th day of
January, April, July and October of each year, commencing on July 30, 2014. The Notes will be issued in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof.
We intend to apply to have the Notes listed on the New York Stock Exchange (or NYSE). If the application is approved, trading of our Notes on NYSE is expected to
begin within 30 days after the original issue date of our Notes. Currently, there is no public market for the Notes.
The Notes will be our unsubordinated unsecured obligations and will rank senior to any of our future subordinated debt and rank equally in right of payment with all
of our existing and future unsecured and unsubordinated debt. The Notes will effectively rank junior to our existing and future secured debt, to the extent of the value of
the assets securing such debt as well as to existing and future debt of our subsidiaries.


Investing in the Notes involves a high degree of risk. The Notes have not been rated. Please read "Risk Factors" beginning on page S-
26 of this prospectus supplement and page 3 of the accompanying base prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying base prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

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Per Note
Total

Public offering price

$
1,000
$275,000,000
Underwriting discount and commissions (1)(2)

$
20.23
$
5,564,374(3)
Proceeds to us (before expenses) (2)

$ 979.77
$269,435,626(3)

(1) We have granted the underwriters the option to purchase, exercisable during the 30-day period beginning on the date of this prospectus supplement, up to an
additional $41,250,000 aggregate principal amount of the Notes. If the underwriters exercise the option in full, and assuming the sale of all over-allotment Notes to
certain institutions for which the underwriters would receive an underwriting discount of $17.50 per Note, the total underwriting discounts and commissions payable
by us will be $6,286,249 and total proceeds to us before other expenses will be $309,963,751.
(2) Excludes the amount payable to Sterne Agee and DNB Markets as a structuring fee in connection with the offering. Please read "Underwriting."
(3) Total amount may not equate due to rounding of the per Note amount. For sales to retail investors, the underwriting discount will be $28.00 per note, resulting in
proceeds, before expenses, to us of $972 per note. For sales to institutional investors, the underwriting discount will be $17.50 per note, resulting in proceeds, before
expenses, to us of $982.50 per note. Please read "Underwriting."


Delivery of our Notes is expected to be made in book-entry form through the facilities of The Depository Trust Company for the accounts of its participants,
including Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, societe anonyme, against payment in New York, New York on or
about May 30, 2014.


Joint Book-Running Managers and Structuring Agents

Sterne Agee

DNB Markets
Co-Managers

ABN AMRO




Raymond James




Scotiabank


May 22, 2014
Table of Contents
TABLE OF CONTENTS
Prospectus Supplement



Page
About This Prospectus Supplement
S-1
About Teekay Offshore Finance Corp.
S-1
Forward-Looking Statements
S-2
Summary
S-4
Risk Factors
S-26
Use of Proceeds
S-48
Ratio of Earnings to Fixed Charges and to Fixed Charges and Preferred Unit Distributions
S-49
Capitalization
S-50
Description of Notes
S-51
Description of Other Indebtedness
S-72
Material U.S. Federal Income Tax Considerations
S-74
Non-United States Tax Considerations
S-77
Underwriting
S-78
Service of Process and Enforcement of Civil Liabilities
S-81
Legal Matters
S-82
Experts
S-82
Where You Can Find More Information
S-82
Incorporation of Documents by Reference
S-83
Expenses
S-84
Base Prospectus



Page
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About This Prospectus


1
Forward-Looking Statements


1
Teekay Offshore Partners L.P.


2
Teekay Offshore Finance Corp.


3
Risk Factors


3
Use of Proceeds


3
Ratio of Earnings to Fixed Charges and to Fixed Charges and Preferred Unit Distributions


4
Description of Securities


5
Selling Unitholders


5
Plan of Distribution


5
Service of Process and Enforcement of Civil Liabilities


5
Legal Matters


6
Experts


6
Where You Can Find More Information


6
Incorporation of Documents by Reference


7
Expenses


8

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ALTERNATIVE SETTLEMENT DATE
It is expected that delivery of the Notes will be made on or about the closing date specified on the cover page of this prospectus,
which will be the fifth business day following the date of pricing of the Notes (this settlement cycle being referred to as "T+5"). Under
Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in three business days,
unless the parties to a trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes on the initial pricing date of
the Notes or the next succeeding business day will be required, by virtue of the fact that the Notes initially will settle in T+5, to specify
alternative settlement arrangements at the time of any such trade to prevent a failed settlement and should consult their own advisor.

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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement, which describes the specific terms of this offering. The
second part is the accompanying base prospectus, which gives more general information, some of which may not apply to this offering.
Generally, when we refer to the "prospectus," we are referring to both parts combined. If information in the prospectus supplement
conflicts with information in the accompanying base prospectus, you should rely on the information in this prospectus supplement.
Any statement made in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus
supplement or in any other subsequently filed document that is also incorporated by reference into this prospectus modifies or supersedes
that statement. Any statement so modified or superseded will be deemed not to constitute a part of this prospectus except as so modified
or superseded.
You should rely only on the information contained in this prospectus, any related free writing prospectus and the documents
incorporated by reference into this prospectus. Neither we nor any of the underwriters have authorized anyone else to give you different
information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We are not offering
these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information in this prospectus
or any free writing prospectus, as well as the information we previously filed with the U.S. Securities and Exchange Commission (or SEC)
that is incorporated by reference into this prospectus, is accurate as of any date other than its respective date. We will disclose material
changes in our affairs in an amendment to this prospectus, a free writing prospectus or a future filing with the SEC incorporated by
reference in this prospectus.
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Unless otherwise indicated, references in this prospectus to "Teekay Offshore Partners," "the Partnership," "we," "us" and "our" and similar
terms refer to Teekay Offshore Partners L.P. and/or one or more of its subsidiaries, except that those terms, when used in this prospectus in
connection with the Notes described herein, shall mean specifically Teekay Offshore Partners L.P. References in this prospectus to "Teekay
Corporation" refer to Teekay Corporation and/or any one or more of its subsidiaries.
Unless otherwise indicated, all references in this prospectus to "dollars" and "$" are to, and amounts are presented in, U.S. Dollars, and
financial information presented in this prospectus is prepared in accordance with accounting principles generally accepted in the United States (or
GAAP).
You should read carefully this prospectus, any related free writing prospectus, and the additional information described under the headings
"Where You Can Find More Information" and "Incorporation of Documents by Reference."
ABOUT TEEKAY OFFSHORE FINANCE CORP.
Teekay Offshore Finance Corp. is a Marshall Islands corporation and wholly owned subsidiary of Teekay Offshore Partners. It has
nominal assets and its activities will be limited to co-issuing the Notes and engaging in other activities incidental thereto. Teekay Offshore
Finance Corp. is acting as co-issuer of the Notes to allow investment in the Notes by institutional investors that may not otherwise be able
to invest due to our structure and investment restrictions under their respective states of organization or charters. You should not expect
Teekay Offshore Finance Corp. to be able to service obligations on the Notes.

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FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in or incorporated by reference into this prospectus and any free writing
prospectus are forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements
that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes
and trends in our business, and the markets in which we operate. In some cases, you can identify the forward-looking statements by the use of
words such as "may," "will," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict,"
"propose," "potential," "continue" or the negative of these terms or other comparable terminology.
Forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning
future events affecting us. Forward-looking statements are subject to risks, uncertainties and assumptions, including those risks discussed in "Risk
Factors" set forth in this prospectus and those risks discussed in other reports we file with the SEC and that are incorporated into this prospectus by
reference, including, without limitation, our Annual Report on Form 20-F for the year ended December 31, 2013 (or our 2013 Annual Report), and
our Report on Form 6-K for the three months ended March 31, 2014. The risks, uncertainties and assumptions involve known and unknown risks
and are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. We caution that forward-looking
statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.
We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to
predict all of these factors. In addition, we cannot assess the effect of each such factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.
Forward-looking statements in this prospectus or incorporated by reference herein include, among others, statements about the following
matters:


· our distribution policy and our ability to make cash distributions on our units or any increases in quarterly distributions;


· growth prospects of the offshore and tanker markets;

· our potential additional shuttle tanker, floating storage and off-take (or FSO) and floating production, storage and offloading (or FPSO)

projects;

· the recent economic downturn and financial crisis in the global market, and potential negative effects on our customers' ability to

charter our vessels and pay for our services;

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· the expected commencement date and estimated cost of FPSO and FSO projects;

· the estimated cost and expected delivery dates of conversions of existing vessels, and the expected commencement of their time-charter

contracts;

· the timing and certainty of completing the acquisition of Logitel Offshore Holdings (or Logitel) and the timing of commencing the

charters of the two floating accommodation units that it owns;


· the timing and certainty of the ALP vessel deliveries;


· offshore and tanker market fundamentals, including the balance of supply and demand in the offshore and tanker markets;


· our competitive advantage in the shuttle tanker market;


· the expected lifespan of our vessels;

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· the estimated cost and expected delivery dates of our towage vessel and floating accommodation unit and newbuildings;


· the potential for additional HiLoad Dynamic Positioning (or DP) projects;


· the potential for additional ocean towage projects;


· the estimated sales price or scrap value of vessels;


· estimated capital expenditures and our ability to fund them;


· our ability to refinance our revolving credit facilities in 2014;


· expected increases in vessel operating expenses and charter rates for our vessels;

· our ability to maintain and expand long-term relationships with major crude oil companies, including our ability to service fields until

they no longer produce;


· the derivation of a substantial majority of revenue from a limited number of customers;


· our ability to leverage to our advantage Teekay Corporation's relationships and reputation in the shipping industry;


· our continued ability to enter into fixed-rate time charters with customers;


· obtaining offshore projects that we or Teekay Corporation bid on or that Teekay Corporation is awarded;

· our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time

charter;


· the ability of the counterparties to our derivative contracts to fulfill their contractual obligations;


· our expected financial flexibility to pursue acquisitions and other expansion opportunities;


· anticipated funds for liquidity needs and the sufficiency of cash flows;


· the future valuation of goodwill;


· our expectations as to any impairment of our vessels;


· the adequacy of our insurance coverage;

· the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards

applicable to our business;


· the expected impact of heightened environmental and quality concerns of insurance underwriters, regulators and charterers;


· anticipated taxation of our partnership and its subsidiaries;

· our general and administrative expenses as a public company and expenses under service agreements with other affiliates of Teekay

Corporation and for reimbursements of fees and costs of Teekay Offshore GP L.L.C., our general partner (or the General Partner);
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· our ability to avoid labor disruptions and attract and retain highly skilled personnel; and


· our business strategy and other plans and objectives for future operations.

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SUMMARY
The following summary highlights selected information contained elsewhere in this prospectus and the documents incorporated by
reference herein and does not contain all the information that you should consider before deciding whether to invest in our Notes. For a more
complete understanding of Teekay Offshore and this offering of our Notes, we encourage you to carefully read this entire prospectus and the
other documents incorporated by reference herein.
Our Partnership
Teekay Offshore Partners is an international provider of marine transportation, oil production and storage services to the offshore oil
industry, focusing on the fast-growing, deep water offshore oil regions of the North Sea and Brazil. We were formed in August 2006 by
Teekay Corporation (NYSE:TK), a leading provider of marine services to the global oil and gas industries, to further develop its operations in
the offshore market. Our growth strategy focuses on expanding our fleet of shuttle tankers, floating storage and offtake (or FSO) units and
floating production, storage and offloading (or FPSO) units under long-term, fixed-rate time charters and expanding into related offshore
services, including specialized towage and floating accommodation units. We intend to continue our practice of acquiring shuttle tankers and
FSO and FPSO units as needed for approved projects only after the long-term charters for the projects have been awarded to us, rather than
ordering vessels on a speculative basis. We seek to capitalize on opportunities emerging from the global expansion of the offshore
transportation, production and storage sectors by selectively targeting long-term, fixed-rate time charters. We have entered into and may enter
into additional joint ventures and partnerships with companies that may provide increased access to long-term, fixed-rate time charter
opportunities or we may engage in vessel or business acquisitions. We seek to leverage the expertise, relationships and reputation of Teekay
Corporation and its affiliates to pursue these growth opportunities in the offshore sectors and may consider other opportunities to which our
competitive strengths are well suited. We have rights to participate in certain other FPSO and shuttle tanker opportunities that may be
provided by Teekay Corporation, Sevan Marine ASA (or Sevan) and Remora AS (or Remora). Our operating fleet operates under medium to
long-term, stable contracts and we are structured as a publicly-traded master limited partnership. Teekay Corporation indirectly owns and
controls our general partner and beneficially owns a 27.9% limited partner interest in us and owns and controls our general partner.
Our operations are conducted through, and our operating assets are owned by, our subsidiaries. Our general partner, Teekay Offshore GP
L.L.C., a Marshall Islands limited liability company, has an economic interest in us and manages our operations and activities. Our general
partner does not receive any management fee or other compensation in connection with its management of our business, but it is entitled to be
reimbursed for all direct and indirect expenses incurred on our behalf. Pursuant to services agreements between us and our subsidiaries, on the
one hand, and other subsidiaries of Teekay Corporation, on the other hand, the Teekay Corporation subsidiaries provide to us substantially all
of our administrative services and to our subsidiaries substantially all of their strategic, business development, advisory, ship management,
commercial, technical and administrative services.
Our Fleet
As of May 1, 2014, our fleet consisted of:

· Shuttle Tankers. We have 35 vessels (including one vessel committed for an FSO conversion upon the expiration of its current
contract in 2015 and the HiLoad DP unit scheduled to complete operational testing in the second quarter of 2014) that mainly

operate under fixed-rate contracts of affreightment, time charters and bareboat charters. Of the 35 shuttle tankers, six are held
through 50% owned subsidiaries, three through a 67% owned subsidiary and two are chartered-in by


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us, with the remainder owned 100% by us. All of these shuttle tankers provide transportation services to energy companies,
primarily in the North Sea and Brazil. The average term of our contracts of affreightment, weighted based on vessel years, is 2.8

years, and our time charters and bareboat charters had an average remaining contract term of approximately 5.7 years as of May 1,
2014. As of May 1, 2014, our shuttle tanker fleet, including newbuildings on order, had a total cargo capacity of approximately
4.3 million deadweight tonnes (or dwt), representing 39% of the total tonnage of the world shuttle tanker fleet.

· FPSO Units. We have four FPSO units, in which we have 100% ownership interests and one FPSO unit in which we have a 50%
ownership. These vessels operate under operations and charter contracts with major energy companies in the North Sea and Brazil.

We use the FPSO units to provide production, processing and storage services to oil companies operating offshore oil field
installations. The FPSO contracts have an average remaining term of approximately 4.2 years. As of May 1, 2014, our FPSO units
had a total production capacity of approximately 0.2 million barrels of oil per day.

· Conventional Tankers. We have a fleet of four Aframax conventional crude oil tankers. Two of these four tankers, which are
equipped for lightering, operated under fixed-rate bareboat charters with Skaugen PetroTrans. In January and February of 2014, the

bareboat charters for these two tankers were novated under the same terms to a subsidiary of Teekay Corporation. We have 100%
ownership in all of these vessels. The average remaining term on these time charter and bareboat charter contracts is approximately
4.1 years. As of May 1, 2014, our conventional tankers had a total cargo capacity of approximately 0.4 million dwt.

· FSO Units. We have a fleet of six FSO units (including one committed FSO conversion unit), in which we have a 100% ownership
interests in five FSO units and an 89% ownership interest in one FSO unit. All of the FSO units operate under fixed-rate contracts,

with an average remaining term of approximately 5.2 years. As of May 1, 2014, our FSO units had a total cargo capacity of
approximately 0.7 million dwt.

· Towage Vessels. We have four long-haul towing and anchor handling vessel newbuildings which are scheduled to deliver in 2016

and in which we have 100% ownership interests.
Potential Additional Shuttle Tanker, FSO and FPSO Projects
Pursuant to an omnibus agreement that we entered into in connection with our initial public offering in December 2006 (or the Omnibus
Agreement), Teekay Corporation is obligated to offer to us its interest in certain shuttle tankers, FSO units and FPSO units Teekay
Corporation owns or may acquire in the future, provided the vessels are servicing contracts with remaining durations of greater than three
years. We may also acquire other vessels that Teekay Corporation may offer us from time to time and we intend to pursue direct acquisitions
from third parties and new offshore projects.
Pursuant to the Omnibus Agreement and a subsequent agreement thereto, Teekay Corporation is obligated to offer to sell to us the
Petrojarl Foinaven FPSO unit, an existing unit owned by Teekay Corporation and operating under a long-term contract in the North Sea,
subject to approvals by the charterer. When Teekay Corporation makes the offer, the purchase price for the Petrojarl Foinaven FPSO unit will
be based on fair market value.
In May 2011, Teekay Corporation entered into a joint venture agreement with Odebrecht Oil & Gas S.A. (a member of the Odebrecht
group) (or Odebrecht) to jointly pursue FPSO projects in Brazil. Odebrecht is a well-established Brazil-based company that operates in the
engineering and construction, petrochemical, bioenergy, energy, oil and gas, real estate and environmental engineering sectors, with over
120,000 employees and a presence in over 20 countries. Through the joint venture agreement, Odebrecht has become a 50 percent partner


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in the Cidade de Itajai FPSO project and Teekay Corporation is currently working with Odebrecht on other FPSO project opportunities that, if
awarded, may result in offers to us to acquire Teekay Corporation's interests in such projects, pursuant to the Omnibus Agreement.
In June 2011, Teekay Corporation entered into a contract with BG Norge Limited to provide a harsh weather FPSO unit to operate in the
North Sea. The contract will be serviced by a newbuilding FPSO unit, the Petrojarl Knarr (or Knarr), which is being constructed by Samsung
Heavy Industries for a fully built-up cost of approximately $1 billion. Pursuant to the Omnibus Agreement, Teekay Corporation is obligated to
offer to us its interest in the Knarr FPSO project at Teekay Corporation's fully built-up cost within a year after the commencement of the
charter, which commencement is expected to occur in the fourth quarter of 2014.
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Teekay Corporation owns three additional FPSO units, the Hummingbird Spirit FPSO, the Petrojarl Banff FPSO and the Petrojarl 1
FPSO, which may also be offered to us in the future pursuant to the Omnibus Agreement.
In May 2013, we entered into an agreement with Statoil Petroleum AS (or Statoil), on behalf of the field license partners, to provide an
FSO unit for the Gina Krog oil and gas field located in the North Sea. The contract will be serviced by a new FSO unit that will be converted
from the 1995-built shuttle tanker, Randgrid, which we currently own through a 67%-owned subsidiary. The FSO conversion project is
expected to be completed for a gross capital cost of approximately $277 million, including amounts reimbursable upon delivery of the unit
relating to installation and mobilization, and the cost of acquiring the remaining 33% ownership interest in the Randgrid shuttle tanker.
Following scheduled completion in early 2017, the newly converted FSO unit will commence operations under a three-year time-charter
contract to Statoil, which also includes 12 additional one-year extension options.
In May 2013, we entered into a ten-year charter contract, plus extension options, with Salamander Energy plc (or Salamander) to supply
an FSO unit in Asia. We are converting our 1993-built shuttle tanker, the Navion Clipper, into an FSO unit for an estimated fully built-up cost
of approximately $70 million (including reimbursable installation costs). The unit is expected to commence its charter contract with
Salamander in the third quarter of 2014.
Business Strategies
Our primary business objective is to increase distributions per unit by executing the following strategies:

· Expand Global Operations in High Growth Regions. We seek to expand our shuttle tanker, FPSO unit and FSO unit operations

into growing offshore markets such as Brazil. In addition, we intend to pursue offshore oil production, storage and transportation
opportunities in existing markets such as the North Sea.

· Pursue Further Opportunities in the Offshore Sector. We believe that Teekay Corporation's ownership of Teekay Petrojarl AS
(or Teekay Petrojarl), a leading operator in the FPSO sector, will enable us to competitively pursue additional FPSO projects
anywhere in the world by combining Teekay Petrojarl's engineering and operational expertise with Teekay Corporation's global
marketing organization and extensive customer and shipyard relationships. We believe that Teekay Corporation's (i) 2011 joint

venture agreement with Odebrecht to jointly pursue FPSO projects in Brazil and (ii) arrangements with Sevan and Remora by
which Teekay Corporation will have access to offshore production projects developed by both companies in the future, in each
case, will also expand our offshore opportunities. In addition, we intend to pursue opportunities to expand into related offshore
services, including specialized towage and floating accommodation units.

· Acquire or construct additional vessels to serve under long-term, fixed-rate contracts. We intend to continue acquiring and

constructing shuttle tankers, FSO units and FPSO units with long-term contracts, rather than ordering vessels on a speculative
basis. We believe this approach facilitates the


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financing of new vessels based on their anticipated future revenues and ensures that new vessels will be employed upon

acquisition, which should provide stable cash flows.

· Provide superior customer service by maintaining high reliability, safety, environmental and quality standards. Energy
companies seek transportation partners that have a reputation for high reliability, safety, environmental and quality standards. We

intend to leverage Teekay Corporation's operational expertise and customer relationships to further expand a sustainable
competitive advantage with consistent delivery of superior customer service.
Competitive Strengths
We believe that we are well positioned to execute our business strategies because of the following competitive strengths:

· Leading Position in the Shuttle Tanker Sector. We are the world's largest owner and operator of shuttle tankers, as we own or
operate 35 vessels (including one vessel committed for an FSO conversion upon the expiration of its current contract in 2015 and
the HiLoad DP unit scheduled to complete operational testing in the second quarter of 2014) of the 93 vessels (including eight

newbuildings) in the world shuttle tanker fleet. Our large fleet size (representing 39% of the total tonnage of the world shuttle
tanker fleet) enables us to provide comprehensive coverage of charterers' requirements and provides opportunities to enhance the
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efficiency of operations and increase fleet utilization.

· Offshore Operational Expertise and Enhanced Growth Opportunities through Our Relationship with Teekay
Corporation. Teekay Corporation has achieved a global brand name in the shipping industry and the offshore market, developed an

extensive network of long-standing relationships with major energy companies and earned a reputation for reliability, safety and
excellence. Some benefits we believe we receive due to our relationship with Teekay Corporation include:

·
access through services agreements to its comprehensive market intelligence and operational and technical sophistication
gained from over 25 years of providing shuttle tanker and FSO services to offshore energy customers. We believe this

expertise has assisted us in successfully operating existing FPSO units and will assist us in continuing to expand our
position in the FPSO sector through Teekay Corporation's ownership of Teekay Petrojarl and interests in other offshore
businesses and our rights to participate in certain FPSO projects under the Omnibus Agreement;

·
access to Teekay Corporation's general commercial and financial core competencies, practices and systems, which we

believe enhances the efficiency and quality of operations;

·
enhanced growth opportunities and added competitiveness in bidding for transportation requirements for offshore projects

and in attracting and retaining long-term contracts throughout the world; and

·
improved leverage with leading shipyards during periods of vessel production constraints due to Teekay Corporation's

established relationships with these shipyards and the high number of newbuilding orders it places.

· Cash Flow Stability from Contracts with Leading Energy Companies. We benefit from stability in cash flows due to the long-
term, fixed-rate contracts underlying most of our business. We have been able to secure long-term contracts because our services

are an integrated part of offshore oil field projects and a critical part of the logistics chain of the fields. Due to the integrated nature
of our services, the high cost of field development and the need for uninterrupted oil production, contractual relationships with
customers with respect to any given field typically last until the field is no longer producing.


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· Disciplined Vessel Acquisition Strategy and Successful Project Execution. Our fleet has been built through successful new
project tenders and acquisitions, and this strategy has contributed significantly to our leading position in the shuttle tanker market.

A significant portion of our shuttle tanker fleet was established through the acquisition of Ugland Nordic Shipping AS in 2001 and
Navion AS, Statoil Hydro ASA's shipping subsidiary, in 2003. In addition, we have increased the size of our fleet through
customized shuttle tanker, FPSO and FSO projects for major energy companies around the world.
Recent Developments
Acquisition of Logitel
In May 2014, we entered into a letter of intent to acquire Logitel, a Norway-based company focused on the high-end floating
accommodation and service rig market. Logitel owns two floating accommodation units (or FAUs), which are based on the Sevan cylindrical
hull design, currently under construction at the COSCO (Nantong) Shipyard (or COSCO) in China, and has options with COSCO to order up
to an additional six FAUs. The first FAU has secured a three-year fixed-rate charter contract, plus extension options, with Petroleo Brasileiro
SA (Petrobras) in Brazil and is scheduled for delivery in early-2015. We expect to enter into a long-term contract for the second FAU prior
to its scheduled delivery in late-2015. The agreement with COSCO for the FAUs includes a payment schedule favorable to us, in which the
majority of the purchase price is due upon delivery. We intend to finance the Logitel acquisition and the initial newbuilding payments through
our existing liquidity and expect to secure long-term debt financing for the units prior to their scheduled deliveries. The Partnership expects
the proposed acquisition to be finalized in the third quarter of 2014.
Acquisition of ALP and Newbuilding Order
In March 2014, we acquired ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-haul ocean towage and
offshore installation services to the global offshore oil and gas industry. ALP currently provides these services through a fleet of third-party
owned vessels. As part of the transaction, we and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the
construction of four state-of-the-art SX-157 Ulstein Design ultra-long distance towing and anchor handling vessel newbuildings, which will
be equipped with DP capability, for a fully built-up cost of approximately $258 million. These newbuildings will be capable of long distance
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towing and offshore unit installation and decommissioning of large floating exploration, production and storage units, including FPSO units,
floating liquefied natural gas (or FLNG) units and floating drill rigs. We intend to continue financing the newbuilding installments through
our existing liquidity and expect to secure long-term debt financing for these vessels prior to their scheduled deliveries in 2016.
We acquired ALP for $2.6 million, which we paid in cash upon closing, and we also entered into an arrangement to pay additional
compensation to three former shareholders of ALP if certain requirements are satisfied. This contingent compensation consists of $2.4 million,
which is payable upon the delivery and employment of ALP's four newbuildings throughout 2016, and up to $2.6 million, which is payable if
ALP's annual operating results from 2017 to 2021 meet certain targets. We have the option to pay up to one half of this compensation through
the issuance of our common units. The contingent compensation is payable only if the three former shareholders are employed by ALP at the
time the performance conditions are met. We also incurred a $1.0 million fee associated with the acquisition, which has been recognized in
our general and administrative expenses in March 2014.
This acquisition of ALP and related newbuilding order represents our entrance into the long-haul ocean towage and offshore installation
services business, which combines our infrastructure and access to capital with ALP's experienced management team to further grow this
niche business that is a natural complement to our existing offshore business.


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FSO Contract
In May 2014, we entered into a ten-year contract extension with Apache Energy for the Dampier Spirit FSO unit, which operates on the
Stag oil field offshore Western Australia. As part of the extension, the FSO unit is expected to enter into drydock for a total cost of
approximately $11 million for capital upgrades during the second quarter of 2014. Under the new contract, the unit is expected to earn
approximately $5.7 million in annual cash flow from vessel operations.
Business Overview
Shuttle Tanker Segment
A shuttle tanker is a specialized ship designed to transport crude oil and condensates from offshore oil field installations to onshore
terminals and refineries. Shuttle tankers are equipped with sophisticated loading systems and DP systems that allow the vessels to load cargo
safely and reliably from oil field installations, even in harsh weather conditions. Shuttle tankers were developed in the North Sea as an
alternative to pipelines. The first cargo from an offshore field in the North Sea was shipped in 1977, and the first dynamically-positioned
shuttle tankers were introduced in the early 1980s. Shuttle tankers are often described as "floating pipelines" because these vessels typically
shuttle oil from offshore installations to onshore facilities in much the same way a pipeline would transport oil along the ocean floor.
Our shuttle tankers are primarily subject to long-term, fixed-rate time-charter contracts for a specific offshore oil field or under contracts
of affreightment for various fields. The number of voyages performed under these contracts of affreightment normally depends upon the oil
production of each field. Competition for charters is based primarily upon price, availability, the size, technical sophistication, age and
condition of the vessel and the reputation of the vessel's manager. Technical sophistication of the vessel is especially important in harsh
operating environments such as the North Sea. Although the size of the world shuttle tanker fleet has been relatively unchanged in recent
years, conventional tankers could be converted into shuttle tankers by adding specialized equipment to meet customer requirements. Shuttle
tanker demand may also be affected by the possible substitution of sub-sea pipelines to transport oil from offshore production platforms.
As of May 1, 2014, there were approximately 93 vessels in the world shuttle tanker fleet (including eight newbuildings), the majority of
which operate in the North Sea. Shuttle tankers also operate in Africa, Brazil, Canada, Asia and the US Gulf. As of May 1, 2014, we owned
33 shuttle tankers, in which our ownership interests ranged from 50% to 100%, and chartered-in an additional two shuttle tankers. Other
shuttle tanker owners include Knutsen NYK Offshore Tankers AS, Transpetro, Viken Shipping, AET and J Lauritzen, which as of May 1,
2014 controlled fleets ranging from three to 23 shuttle tankers each. We believe that we have certain competitive advantages in the shuttle
tanker market as a result of the quality, type and dimensions of our vessels combined with our market share in the North Sea and Brazil.


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