REMARKETING AGREEMENT



                                February __, 2003



Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036



The Bank of New York

101 Barclay Street

New York, New York 10286

Attention:  Corporate Trust Division



Ladies and Gentlemen:



         This Agreement is dated as of February __, 2003 (the "Agreement") by

and among Teekay Shipping Corporation, a corporation duly incorporated and

existing under the laws of the Republic of The Marshall Islands (the "Company"),

Morgan Stanley & Co. Incorporated, as the remarketing agent (the "Remarketing

Agent"), and The Bank of New York, a New York banking corporation, not

individually but solely as Purchase Contract Agent (the "Purchase Contract

Agent") and as attorney-in-fact of the holders of Purchase Contracts (as defined

in the Purchase Contract Agreement referred to below).



Section 1. Definitions.



     (a) Capitalized terms used and not defined in this Agreement shall have the

meanings set forth in the Purchase Contract Agreement, dated as of February __,

2003, between the Company and The Bank of New York, as Purchase Contract Agent,

as amended from time to time (the "Purchase Contract Agreement").



     (b) As used in this Agreement, the following terms have the following

meanings:



     "Commission" means the United States Securities and Exchange Commission.



     "Coupon Rate" has the meaning set forth in Section 205(a) of the

Supplemental Indenture No. 1.



     "Notes" means the [____]% Notes due May 18, 2006 of the Company.



     "Preliminary Prospectus" means any preliminary prospectus relating to the

Remarketed Notes included in the Registration Statement, including the documents

incorporated by reference therein as of the date of such Preliminary Prospectus;

and any reference to any amendment or supplement to such Preliminary Prospectus

shall be deemed to refer to and include any documents filed after the date of

such Preliminary Prospectus, under the Exchange Act, and incorporated by

reference in such Preliminary Prospectus.



     "Prospectus" means the prospectus relating to the Remarketed Notes, in the

form in which first filed, or transmitted for filing, with the Commission after

the effective date of the







                                       1

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Registration Statement pursuant to Rule 424(b), including the documents

incorporated by reference therein as of the date of such Prospectus; and any

reference to any amendment or supplement to such Prospectus shall be deemed to

refer to and include any documents filed after the date of such Prospectus,

under the Exchange Act, and incorporated by reference in such Prospectus.



     "Registration Statement" means a registration statement under the

Securities Act prepared by the Company covering, inter alia, the Remarketing of

the Remarketed Notes pursuant to Section 5(a) hereunder, including all exhibits

thereto and the documents incorporated by reference in the prospectus contained

in such registration statement, and any post-effective amendments thereto.



     "Remarketed Notes" means the Pledged Notes and the Separate Notes, if any,

subject to Remarketing as identified to the Remarketing Agent by the Purchase

Contract Agent and the Custodial Agent, respectively, after 5:00 p.m., New York

City time, on the Business Day immediately preceding the Remarketing Date, and

shall include: (a) the Notes of the Holders of Corporate Units who have not

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