Welcome to Teekay Corporation's Second Quarter 2021 Earnings Results Conference Call. During the call, all participants will be in a listen only mode. Afterwards, you will be invited to participate in a question and answer As a reminder, this call is being recorded. Now for opening remarks and introductions, I would like to turn the call over to the company. Please go ahead.
Before we begin, I'd like to direct all participants to our website at www.teekay.com, where you'll find a copy Q2 of 2021 earnings presentation. Teekay's President and CEO, Kenneth Bidd and Teekay's CFO, Vince Lauck, will review this presentation during today's conference call. Please allow me to remind you that our discussion today contains forward looking statements. Actual results may differ materially from results projected by those forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the Q2
Thanks, Ryan, and good morning, everyone, and thank you for joining us today for Teekay Corporation's Q2 2021 earnings conference call. Before I hand the call over to Kenneth, I will briefly review our financial results for the quarter. Starting with our recent highlights on Slide 3 of the presentation. In the Q2, we reported a small consolidated adjusted profit of $30,000 down from $11,000,000 or $0.11 per share in the prior quarter. We also generated total adjusted EBITDA of $172,000,000 down from $202,000,000 in the previous quarter.
We reported another strong quarter in our gas business. However, compared to Q1, our tanker business results were weaker due to lower spot tanker rates and the expiration of certain fixed rate time charters that were secured during last year's strong tanker market. Our second quarter results also reflected A higher than normal number of scheduled dry dockings in both our gas and tanker businesses. Looking ahead, We are expecting our Q3 results to be lower than the Q2, mainly due to weaker spot tanker rates and another heavy drydock schedule for both our gas and tanker fleets. However, we are expecting our 4th quarter results to be stronger due to a lighter dry docking schedule And the anticipation of a stronger spot tanker market, especially during the winter months.
For guidance on our Q3 results, Please refer to the appendix of this presentation. In May, we reached the major milestone towards our Strategic objective of winding down our FPSO segment, including fulfilling our remaining obligations relating to the Banff field, which resulted in a $33,000,000 gain from the reversal of our associated asset retirement obligation in the 2nd quarter. Kenneth will discuss this in more detail on the next slide. Lastly, despite the lower earnings, the Teekay Group has maintained a strong financial With total consolidated liquidity of over $800,000,000 at the end of the quarter. With that, I will turn the call over to Kenneth.
Thank you, Vince, and good morning, everyone. Turning to Slide 4. As Vince just mentioned, we have reached major milestone in winding down our FPSO segment. I'll touch briefly on some of the updates since our conference call last quarter. The Banff FPSO ownership was safely handed over to the Maersk recycling yard in Denmark on May 11, where it is in the process of being Recycled in accordance with the EU ship recycling regulation.
And in late May, we completed all our remaining on our decommissioning agreement with CNR, whereby the customer took on our remaining Phase 2 decommissioning responsibilities on the Banff field. This should enable CNR to complete our Phase 2 work in conjunction with the other decommissioning work at the Banff field in a more efficient manner. This agreement eliminates our remaining exposure to the field. And as a result, we have reversed our asset retirement obligation liability $33,000,000 during the Q2. During the quarter, we incurred approximately $5,000,000 of costs relating to the Banff FPSO associated with towage costs to the Mars Shipyard and payments to the recycling yard, and we're not expecting any material remaining costs for this unit in As previously announced, the Foinaven FPSO, which is only earning a nominal day rate is expected to be redelivered to us next year As a result of BP's recent decision to suspend production on the Foinaven field, we now expect the unit to be redelivered to us in Q3 of 2022 rather than in the Q2.
Following the redelivery, we plan to green recycle the unit with the associated cost expected to Covered by a fixed contractual lump sum payment from the customer. As a result of this, we have now largely eliminated our remaining exposure To both the Banff and Foinaven FPSOs, the Humminbird FPSO continues to produce on the Chestnut field With steady oil production and high uptime and given the continued strength in oil prices, we now expect the unit will continue operating on this field into next year. On Slide 5, I will briefly touch on the results and highlights of our daughter companies. As always, I encourage you to listen to their respective earnings conference calls for more details following this call. Starting with Teekay LNG, our gas business continues to deliver solid performance and strong earnings despite a heavier than normal drydocking schedule during the quarter.
The outlook for the LNG shipping market is positive as reflected in the current strong spot and time charter LNG shipping rates, which we believe should provide tailwinds Wins for TDP through its spot market linked charter contract as well as its upcoming charter renewals in 2022. GDP does, however, continue to have 98% of its LNG fleet fixed for the remainder of 2021 89% fixed For 2022, which generates a significant amount of stable cash flows with upside from 1 spot market linked charter contract. Turning to Teekay Tankers. Although the near term outlook is uncertain due to the continued impact of COVID-nineteen, we believe many of the leading Indicators for tanker market recovery continue to improve, including planned increases in OPEC plus production, declining global oil inventories, Which are below 5 year average levels as well as positive tanker fleet supply fundamentals with heightened scrapping and a very limited amount of new tanker orders. In anticipation of a tanker market recovery, TNK Countercyclically in chartered 3 vessels for periods of 18 to 24 months with extension options, which we believe represents an attractive Risk reward and has been a profitable lever for us during past tanker market cycles.
TNK also has a strong balance sheet with a healthy liquidity position and low financial leverage, which enables us to continue reducing our overall cost of capital by unwinding expensive sale leasebacks and replacing them with lower cost Turning to Slide 6. Teekay Corp continues to be a level play on our daughter companies, Teekay LNG and Teekay Tankers and is an attractive and diversified way to participate in the potential share price appreciation of these companies. In addition, as we highlighted earlier, we have now reversed our asset retirement obligation relating to the Banff FPSO, which increased our sum of the parts value by $33,000,000 or $0.33 per share. Looking at the table on this slide, we highlight Teekay Corporation's Current sum of the parts value based on our daughter company ownership and their respective share prices as of yesterday's close, Which shows that Teekay Corp. Share price has 12% upside to its current sum of the parts value.
Based on 10% To 20 percent daughter share price appreciation, Teekay Corporation's upside to its solid parts value is between 34% And 56% based on the closing prices yesterday. In closing, I want to thank our seafarers and onshore colleagues for There are continued dedication to providing safe and uninterrupted service to our customers throughout the course of the pandemic. We're not out of the woods yet, But we successfully managed through uniquely challenging circumstances over the last one and a half year and are confident that we are taking all measures to manage through In addition, we continue to see a strong correlation between global vaccination programs and the increase in Oil demand, which we estimate to be approximately 3% to 4% lower currently compared to pre pandemic levels. As the world recovers from the pandemic, We expect the demand for oil and gas and related transportation services to gradually return to 2019 levels, which we believe will be positive for our core gas With that operator, we're now available to take questions.
Thank you. Our first question comes from Sandy Burns with Stifel.
Hi, good morning everyone. Just wanted to follow-up a little bit just on like the wind down of the FPSOs. So for Navin, when you mentioned that the green recycle costs will be covered by a lump sum payment, Is that the $67,000,000 you got last year or will you receive another payment to cover those future costs?
Hi, Sandy. It's Vince here. No, the $67,000,000 was already received last April, April 2020. So we will be receiving a separate amount in addition to that when BP redelivers the unit back to us next year. And that amount will cover the green recycling costs at that time.
Okay. And then for the Humminbird, I guess, Maybe you wouldn't have a feel for this yet, but when you eventually do get it back, would there be any material costs associated with that vessel To redeploy it or recycle it as such?
Yes. We've touched on Some of our earlier calls, Hummingbird is smaller and younger units. But I think as we've all witnessed The redeployment opportunities by FPSOs are somewhat limited, but it is a unit that theoretically could be redeployed. The costs In connection with the decommissioning is a much more limited scope than what we've Seen on both the especially the Banff, but also even on the Foinaven field because it is a smaller unit and smaller. So we have Some anchors that needs to be pulled up, but then it's basically in sail away ready condition.
So it should be smaller Then the other 2.
Right, right. So maybe what I'm trying to get at is at the parent level, Really now, your only cash obligations are the interest expense and whatever corporate expenses That you have up there, there's really no other material obligations you need to Have will require cash or liquidity or anything. Am I thinking about that correctly?
That's correct. Yes.
Okay, great. Good job on all that. Thank you. That's all I have.
Thank you. Thanks,
Andy. That does conclude today's question and answer session. At this time, I will turn the conference back to the company For any additional or closing remarks
Well, thank you for listening in today. I'm sure that Many of you will be joining our daughter company calls that follows this call, and we look forward to reporting back to you next quarter. Thank you.