UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10‑Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______________to __________

Commission File Number 1‑35143

ANDEAVOR LOGISTICS LP
(Exact name of registrant as specified in its charter)
Delaware
ANDXLOGOA16.JPG
27‑4151603
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
 
 
 
 
 
200 East Hardin Street, Findlay, Ohio 45840
(Address of principal executive offices) (Zip Code)
 
419-421-2414
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
þ
 
Accelerated filer
o
 
 
Non-accelerated filer
o
 
Smaller reporting company
o
 
 
 
 
 
Emerging growth company
o
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

There were 245,484,047 common units of the registrant outstanding at November 2, 2018 .
 


Table of Contents

Andeavor Logistics LP
Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2018

 
 
 
 
 
 
 
 
 
 
Note 2 - Acquisitions  and Divestitures
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 










ANDXLOGOA17.JPG

















This Quarterly Report on Form 10-Q (including documents incorporated by reference herein) contains statements with respect to our expectations or beliefs as to future events. These types of statements are “forward-looking” and subject to uncertainties. See “Important Information Regarding Forward-Looking Statements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2.

2  |
  ANDXLOGOHIGHRESA09.JPG
 
 

 
 
Financial Statements
 


Part I - Financial Information

Item 1. Financial Statements

Andeavor Logistics LP
Condensed Statements of Consolidated Operations
(Unaudited)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
 
(In millions, except per unit amounts)
Revenues: (b)
 
 
 
 
 
 
 
Affiliate
$
415

 
$
468

 
$
1,131

 
$
951

Third-party
227

 
626

 
626

 
1,184

Total Revenues
642

 
1,094

 
1,757

 
2,135

Costs and Expenses:
 
 
 
 
 
 
 
Cost of fuel and other (excluding items shown separately below) (b)

 
554

 

 
716

NGL expense (excluding items shown separately below)
73

 
64

 
166

 
179

Operating expenses (excluding depreciation and amortization)
236

 
199

 
658

 
512

Depreciation and amortization expenses
86

 
85

 
268

 
222

General and administrative expenses
31

 
44

 
91

 
107

Loss (gain) on asset disposals and impairments
1

 
1

 
2

 
(25
)
Operating Income
215

 
147

 
572

 
424

Interest and financing costs, net
(57
)
 
(68
)
 
(172
)
 
(193
)
Equity in earnings of equity method investments
7

 
6

 
25

 
13

Other income, net
1

 
5

 
4

 
9

Net Earnings
$
166

 
$
90

 
$
429

 
$
253

 
 
 
 
 
 
 
 
Loss attributable to Predecessors
$
4

 
$
7

 
$
28

 
$
46

Net Earnings Attributable to Partners
170

 
97

 
457

 
299

Preferred unitholders’ interest in net earnings
(10
)
 

 
(34
)
 

General partner’s interest in net earnings, including incentive distribution rights

 

 

 
(79
)
Limited Partners’ Interest in Net Earnings
$
160

 
$
97

 
$
423

 
$
220

 
 
 
 
 
 
 
 
Net earnings per limited partner unit
 
 
 
 
 
 
 
Common - basic
$
0.68

 
$
0.90

 
$
1.91

 
$
2.05

Common - diluted
$
0.68

 
$
0.90

 
$
1.91

 
$
2.05

 
 
 
 
 
 
 
 
Weighted average limited partner units outstanding
 
 
 
 
 
 
 
Common units - basic
234.4

 
108.0

 
223.0

 
107.0

Common units - diluted
234.6

 
108.1

 
223.2

 
107.1

 
 
 
 
 
 
 
 
Cash distributions paid per unit
$
1.030

 
$
0.971

 
$
3.045

 
$
2.821


(a)
Adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.
(b)
Due to the adoption of the revenue recognition standard effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor for the three and nine months ended September 30, 2018 were netted. See Note 1 for further discussion.

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
 
September 30, 2018  | 3

Financial Statements


Andeavor Logistics LP
Condensed Consolidated Balance Sheets
(Unaudited)

 
September 30,
2018
 
December 31, 2017 (a)
 
(In millions, except unit amounts)
Assets
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
30

 
$
75

Receivables, net of allowance for doubtful accounts
 
 
 
Trade and other
250

 
219

Affiliate
251

 
264

Prepayments and other current assets
81

 
27

Total Current Assets
612

 
585

Property, Plant and Equipment, Net
 
 
 
Property, plant and equipment, at cost
7,965

 
7,243

Accumulated depreciation
(1,215
)
 
(994
)
Property, Plant and Equipment, Net
6,750

 
6,249

Acquired Intangibles, Net
1,116

 
1,154

Goodwill
988

 
956

Equity Method Investments
607

 
440

Other Noncurrent Assets, Net
124

 
121

Total Assets
$
10,197

 
$
9,505

 
 
 
 
Liabilities and Equity
 
 
 
Current Liabilities
 
 
 
Accounts payable
 
 
 
Trade and other
$
201

 
$
186

Affiliate
254

 
207

Accrued interest and financing costs
68

 
40

Other current liabilities
81

 
85

Total Current Liabilities
604

 
518

Debt, Net of Unamortized Issuance Costs
4,829

 
4,127

Other Noncurrent Liabilities
77

 
54

Total Liabilities
5,510

 
4,699

Commitments and Contingencies (Note 8)


 


Equity
 
 
 
Equity of Predecessors

 
1,292

Preferred unitholders; 600,000 units issued and outstanding in 2018 and 2017
594

 
589

Common unitholders;  245,472,743  units issued and outstanding (217,097,057 in 2017)
4,093

 
2,925

Total Equity
4,687

 
4,806

Total Liabilities and Equity
$
10,197

 
$
9,505


(a)
Adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.


The accompanying notes are an integral part of these condensed consolidated financial statements.

4  |
  ANDXLOGOHIGHRESA09.JPG
 
 

 
 
Financial Statements
 


Andeavor Logistics LP
Condensed Statements of Consolidated Cash Flows
(Unaudited)

 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
 
(In millions)
Cash Flows From (Used In) Operating Activities
 
 
 
Net earnings
$
429

 
$
253

Adjustments to reconcile net earnings to net cash from operating activities:
 
 
 
Depreciation and amortization expenses
268

 
222

Loss (gain) on asset disposals and impairments
2

 
(25
)
Other operating activities
27

 
23

Changes in current assets and liabilities
4

 
62

Changes in noncurrent assets and liabilities
(11
)
 
(11
)
Net cash from operating activities
719

 
524

Cash Flows From (Used In) Investing Activities
 
 
 
Capital expenditures
(566
)
 
(220
)
Acquisitions, net of cash
(379
)
 
(1,230
)
Proceeds from sales of assets

 
46

Net cash used in investing activities
(945
)
 
(1,404
)
Cash Flows From (Used In) Financing Activities
 
 
 
Borrowings under revolving credit agreements
1,030

 
319

Repayments under revolving credit agreements
(333
)
 
(614
)
Proceeds from issuance of common units, net of issuance costs

 
284

Proceeds from issuance of general partner units, net of issuance costs

 
6

Quarterly distributions to common unitholders
(620
)
 
(329
)
Quarterly distributions to general partner

 
(131
)
Distributions to preferred unitholders
(29
)
 

Distributions in connection with acquisitions
(300
)
 
(5
)
Sponsor contributions of equity to the Predecessors
406

 
678

Capital contributions by affiliate
27

 
24

Other financing activities

 
(2
)
Net cash from financing activities
181

 
230

Decrease in Cash and Cash Equivalents
(45
)
 
(650
)
Cash and Cash Equivalents, Beginning of Period
75

 
688

Cash and Cash Equivalents, End of Period
$
30

 
$
38


(a)    Adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
 
September 30, 2018  | 5

Notes to Condensed Consolidated Financial Statements (Unaudited)


Note 1 - Organization and Basis of Presentation

Organization

Andeavor Logistics LP (“Andeavor Logistics” or the “Partnership”) is a fee-based, growth-oriented Delaware limited partnership formed in December 2010 by Andeavor and its wholly-owned subsidiary, Tesoro Logistics GP, LLC (“TLGP”), our general partner, to own, operate, develop and acquire logistics and related assets and businesses. Unless the context otherwise requires, references in this report to “we,” “us,” “our,” or “ours” refer to Andeavor Logistics LP, one or more of its consolidated subsidiaries, or all of them taken as a whole. Unless the context otherwise requires, references in this report to “Andeavor” refer collectively to Andeavor for all activity through September 30, 2018, or Andeavor LLC, successor-by-merger to Andeavor effective October 1, 2018 and a wholly owned subsidiary of Marathon Petroleum Corporation (“MPC” or “Marathon”), and any of Andeavor’s or Andeavor LLC’s subsidiaries, as applicable, other than Andeavor Logistics, its subsidiaries and its general partner.

Marathon Petroleum Corporation Merger
On October 1, 2018, MPC completed its acquisition of Andeavor in accordance with the Agreement and Plan of Merger, dated as of April 29, 2018, as amended (the “MPC Merger Agreement”), under which MPC acquired all of Andeavor’s outstanding shares (the “MPC Merger”). Following the MPC Merger, MPC is the beneficial owner of approximately 156 million common units out of approximately 245 million common units outstanding in the Partnership as of October 1, 2018, representing an approximate 64% limited partner interest. MPC is also the beneficial owner of 100% of the equity interests of TLGP.

Principles of Consolidation and Basis of Presentation

Principles of Consolidation
Assets acquired from Andeavor, and the associated liabilities and results of operations, are collectively referred to as the “Predecessors.” See Note 1 of our Annual Report on Form 10-K for the year ended December 31, 2017 and Note 2 for additional information regarding the assets acquired from Andeavor.

Transfers of businesses between entities under common control are accounted for as if the transfer occurred at the beginning of the period, and prior periods are retrospectively adjusted to furnish comparative information. On August 6, 2018, we acquired Permian, refining logistics and asphalt assets (the “2018 Drop Down”) from Andeavor. See Note 2 for additional information. As an entity under common control with Andeavor, we record the assets that we acquire from Andeavor, on our condensed consolidated balance sheet at Andeavor’s historical basis instead of fair value. Accordingly, the accompanying financial statements and related notes of Andeavor Logistics have been retrospectively adjusted to include the historical results of the assets acquired prior to the effective date of the acquisition.

The financial statements of our Predecessors have been prepared from the separate records maintained by Andeavor and may not necessarily be indicative of the conditions that would have existed or the results of operations if our Predecessors had been operated as an unaffiliated entity. For the nine months ended September 30, 2018 , the Partnership’s net cash from operating activities includes $40 million and net cash used in investing activities of $446 million from our Predecessors, offset by sponsor contributions of equity to the Predecessors in net cash from financing activities. The Partnership’s operating activities and investing activities for the nine months ended  September 30, 2017  include  $25 million and $653 million , respectively, of cash used by our Predecessors, offset by sponsor contributions of equity to the Predecessors in net cash from financing activities.

We acquired certain logistics assets located in Anacortes, Washington (the “Anacortes Logistics Assets”) in 2017. While this acquisition is a common control transaction, prior periods have not been recast as these assets did not constitute a business in accordance with Accounting Standards Update (“ASU”) 2017-01, “Clarifying the Definition of a Business.”

The interim condensed consolidated financial statements and notes thereto have been prepared by management without audit according to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results for the periods presented. Such adjustments are of a normal recurring nature, unless otherwise disclosed.

Basis of Presentation
We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). However, certain information and notes normally included in financial statements prepared under U.S. GAAP have been condensed or omitted pursuant to the SEC’s rules and regulations. Management believes that the disclosures presented herein are adequate to present the information fairly. The accompanying interim condensed consolidated financial statements and notes should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 . Certain prior year balances have been aggregated or disaggregated in order to conform to the current year presentation, including the adoption of recent accounting standards discussed further below.


6  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

We are required under U.S. GAAP to make estimates and assumptions that affect the amounts of assets and liabilities and revenues and expenses reported as of and during the periods presented. We review our estimates on an ongoing basis using currently available information. Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates. The results of operations of the Partnership for any interim period are not necessarily indicative of results for the full year.

Cost Classifications
Natural gas liquids (“NGL”) expense results from the cost of NGL purchases under our percent of proceeds (“POP”) arrangements as well as the non-cash acquisition of replacement dry gas under our keep-whole arrangements.

During the three and nine months ended September 30, 2017 , cost of fuel and other included the purchase cost of refined products sold within our Wholesale segment, the cost of inbound transportation and distribution costs incurred to transport product to our customers. Due to the adoption of ASU 2014-09, “Revenue from Contracts with Customers,” and the associated subsequent amendments (collectively, “ASC 606”) on January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements were netted, as further described in Note 10 .

Operating expenses are comprised of direct operating costs including costs incurred for direct labor, repairs and maintenance, outside services, chemicals and catalysts, utility costs, including the purchase of electricity and natural gas used by our facilities, property taxes, environmental compliance costs related to current period operations, rent expense and other direct operating expenses incurred in the provision of services.

Depreciation and amortization expenses consist of the depreciation and amortization of property, plant and equipment, deferred charges and intangible assets. General and administrative expenses represent costs that are not directly or indirectly related to or otherwise are not allocated to our operations. NGL expense, direct operating expenses, and depreciation and amortization expenses recognized by our Terminalling and Transportation, Gathering and Processing, and Wholesale segments constitute costs of revenue as defined by U.S. GAAP.

Financial Instruments

The fair value of our senior notes is based on prices from recent trade activity and is categorized in level 2 of the fair value hierarchy. The borrowings under our amended revolving credit facility (the “Revolving Credit Facility”) and our dropdown credit facility (“Dropdown Credit Facility”), which include a variable interest rate, approximate fair value. The carrying value and fair value of our debt were both $4.9 billion as of September 30, 2018 and were $4.2 billion and $4.3 billion at December 31, 2017 , respectively. These carrying and fair values of our debt exclude the unamortized issuance costs, which are netted against our total debt.

We believe the carrying value of our other financial instruments, including cash and cash equivalents, receivables, accounts payable and certain accrued liabilities, approximate fair value. Our fair value assessment incorporates a variety of considerations, including the short-term duration of the instruments and the expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk.

New Accounting Standards and Disclosures

Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606 to replace existing revenue recognition rules with a single comprehensive model to use in accounting for revenue arising from contracts with customers. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services for an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, ASC 606 requires expanded disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

We adopted ASC 606 on January 1, 2018 utilizing the modified retrospective method. We recognized a $22 million reduction to the opening balance of partners’ equity as of January 1, 2018 for the cumulative effect adjustment related to contracts in process but not substantially complete as of that date. We reflected the aggregate impact of all modifications executed and effective as of January 1, 2018 in applying the new standard to these contracts. The cumulative effect adjustment is primarily related to the period over which revenue is recognized on contracts for which customers pay minimum throughput volume commitments and claw-back provisions apply. Additionally, upon the adoption of ASC 606, the gross versus net presentation of certain contractual arrangements and taxes has changed as further described in Note 10 . The current period results and balances are presented in accordance with ASC 606, while comparative periods continue to be presented in accordance with the accounting standards in effect for those periods.

For the three and nine months ended September 30, 2018 , we recorded lower revenues of $709 million and $2.0 billion , respectively, and lower costs and expenses of $709 million and $2.0 billion , respectively, for presentation impacts of applying ASC 606. These impacts were primarily associated with the netting of revenues and costs associated with our fuel purchase and supply arrangements with Andeavor, as further described in Note 10 . We recorded lower revenues of $13 million and $10 million

 
 
September 30, 2018  | 7

Notes to Condensed Consolidated Financial Statements (Unaudited)

associated with minimum volume commitments during the three and nine months ended September 30, 2018 , respectively, as a result of applying the new standard. There were no material impacts during the period to the condensed consolidated balance sheets or condensed statement of consolidated cash flows, as a result of the adoption.

Leases
In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”), which amends existing accounting standards for lease accounting and adds additional disclosures about leasing arrangements. Under the new guidance, lessees are required to recognize right-of-use assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either a financing lease or operating lease with classification affecting the pattern of expense recognition in the condensed statements of consolidated operations and presentation of cash flows in the condensed statements of consolidated cash flows. The new standard also requires additional disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption being permitted. In July 2018, the FASB issued ASU 2018-11 , which permits entities with the option to adopt the provisions of ASU 2016-02 prospectively without adjusting comparative periods. We will elect this option and adopt the standard on January 1, 2019 . In addition, we also expect to adopt the package of practical expedients which allows an entity, on the date of adoption, to not reassess expired or existing contracts in whether they are a lease or contain a lease and to not reassess the historical lease classification for expired or existing leases.

We continue to progress through our implementation plan, which includes the following activities: testing and implementing a new lease accounting system, finalizing design and implementation of new business processes and related internal controls, the continued extraction of the required accounting and reporting data from our lease agreements as well as the continued assessment and documentation of the accounting impacts related to the new standard. While we are still working through our implementation plan, we do expect that the recognition of right-of-use assets and lease liabilities, which are not currently reflected on our consolidated balance sheets, will have a material impact on total assets and liabilities. However, we do not expect the adoption of the standard to have a material impact on our statement of consolidated operations or liquidity. At this time, we are unable to estimate the full impact of the standard given we are still extracting the accounting data from our lease agreements as well as testing and implementing our new lease accounting system, which will be used to calculate the accounting impacts.

Credit Losses
In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which amends guidance on the impairment of financial instruments. The ASU requires the estimation of credit losses based on expected losses and provides for a simplified accounting model for purchased financial assets with credit deterioration. ASU 2016-13 is effective for annual reporting periods beginning after December 15, 2019, and interim reporting periods within those annual reporting periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2018. While we are still evaluating the impact of ASU 2016-13, we do not expect to early adopt ASU 2016-13 and we do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.

Restricted Cash
In November 2016, the FASB issued ASU 2016-18, "Restricted Cash" (“ASU 2016-18”), which clarifies how restricted cash and restricted cash equivalents are presented in the statements of cash flows. The ASU requires that changes in restricted cash that result from transfers between cash, cash equivalents and restricted cash should not be presented as cash flow activities in the statements of cash flows. ASU 2016-18 was effective for annual reporting periods beginning after December 15, 2017, and interim reporting periods within those annual reporting periods. We adopted ASU 2016-08 as of January 1, 2018 on a retrospective basis. Adoption of this standard resulted in an increase in cash and cash equivalents during the second quarter of 2017 of $14 million , but the restriction was released during the third quarter of 2017 as the cash was used to reinvest in assets used in our business and as a payment of debt. As a result, the adoption of this standard did not have an impact on our condensed statement of consolidated cash flows for the nine months ended September 30, 2017. See Note 2 for further information regarding restricted cash.

Pension and Postretirement Costs
In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”), which requires the current service-cost component of net benefit costs to be presented similarly with other current compensation costs for related employees on the statement of consolidated operations and stipulates that only the service cost component of net benefit cost is eligible for capitalization. Additionally, the Partnership will present other components of net benefit costs elsewhere on the condensed statements of consolidated operations since these costs are allocated to the Partnership’s financial statements by Andeavor. The amendments to the presentation of the condensed statements of consolidated operations in this update should be applied retrospectively while the change in capitalized benefit cost is to be applied prospectively. We adopted ASU 2017-07 as of January 1, 2018. Adoption of the standard resulted in an increase to interest and financing costs of $2 million and $6 million , respectively, with a corresponding increase to other income of $2 million and $6 million , respectively, for the three and nine months ended September 30, 2017 with no impact to net earnings. ASU 2017-07 does not impact the condensed consolidated balance sheets or condensed statements of consolidated cash flows.


8  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Stock Compensation
In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting” (“ASU 2018-07”), which expands the scope of Topic 718 to include share-based payment awards to nonemployees and eliminates the classification differences for employee and nonemployee share-based payment awards. This guidance is effective for interim and annual periods beginning after December 15, 2018. While we are still evaluating the impact of ASU 2018-07, we do not expect the adoption of this standard to have a material impact on our condensed consolidated financial statements.

Note 2 - Acquisitions and Divestitures

Acquisitions

2018 Drop Down
On August 6, 2018, we completed the 2018 Drop Down for total consideration of $1.55 billion comprised of $300 million in cash financed with borrowings under our Dropdown Credit Facility and 28,283,742 newly issued common units of the Partnership with a fair value of $1.25 billion . These assets include gathering, storage and transportation assets in the Permian Basin; legacy Western Refining, Inc. assets and associated crude terminals; the majority of Andeavor’s remaining refining terminalling, transportation and storage assets; and equity method investments in Andeavor Logistics RIO Pipeline LLC (“ALRP”), Minnesota Pipe Line Company, LLC (“MPL”), and PNAC, LLC (“PNAC”). In addition, the Conan Crude Oil Gathering System and the Los Angeles Refinery Interconnect Pipeline (“LARIP”) were transferred at cost plus incurred interest. In conjunction with the 2018 Drop Down, we entered into additional commercial agreements with Andeavor. See Note 3 for further information regarding these agreements.

The 2018 Drop Down includes:

Crude oil and other feedstock storage tankage and refined product storage tankage at Andeavor’s Mandan, Salt Lake City and Los Angeles refineries;
Rail terminals and truck racks at Andeavor’s Mandan, Salt Lake City and Los Angeles refineries for the loading and unloading of various refined products from manifest and other railcars and trucks, respectively;
Interconnecting pipeline facilities in the Los Angeles area as well as other railroad tracks and adjoining lands;
Mesquite and Yucca truck unloading stations in New Mexico for the unloading of crude trucks and injection of crude into the TexNewMex pipeline;
Mason East and Jackrabbit (“Wink”) truck unloading and injection stations in Texas that receive crude via the T-Station line and trucks for injection into the Kinder Morgan and Bobcat Pipeline;
The Jal storage, injection and rail unloading facility in New Mexico that stores and supplies natural gas liquids for use in Andeavor’s El Paso refinery;
Natural gas liquid storage tankage, a rail and truck terminal for the loading and unloading of natural gas liquids from railcars and trucks as well as from the waterline at the Wingate facility in New Mexico;
Crude oil and other feedstock storage tankage at the Clearbrook terminal in Minnesota;
Bobcat Pipeline that transports crude oil between the Mason East Station and the Wink Station;
Benny Pipeline that delivers crude oil from the Conan terminal in Texas to a connection with gathering lines in New Mexico;
All of the issued and outstanding limited liability company interests in: (i) Tesoro Great Plains Midstream LLC, which owns BakkenLink Pipeline LLC, (ii) Andeavor MPL Holdings LLC, which holds the investment in MPL, (iii) Andeavor Logistics CD LLC, (iv) Western Refining Conan Gathering, LLC, which owns the Conan Crude Oil Gathering System (v) Western Refining Delaware Basin Storage, LLC, (vi) Asphalt Terminals LLC, which holds the investment in PNAC, and (vii) 67% of all of the issued and outstanding limited liability company interests in ALRP; and
Certain related real property interests.

SLC Core Pipeline System
On May 1, 2018 , we completed our acquisition of the SLC Core Pipeline System (formerly referred to as the Wamsutter Pipeline System) from Plains All American Pipeline, L.P. for total consideration of $180 million . The system consists of pipelines that transport crude oil to another third-party pipeline system that supply the Salt Lake City area refineries, including Andeavor’s Salt Lake City refinery. We financed the acquisition using our Revolving Credit Facility. This acquisition is not material to our condensed consolidated financial statements and its operating results are reported in our Terminalling and Transportation segment.

Western Refining Logistics, LP Merger
Effective October 30, 2017, Andeavor Logistics closed its merger with Western Refining Logistics, LP (“WNRL”) (the “WNRL Merger”), exchanging all outstanding common units of WNRL for units of Andeavor Logistics, representing an equity value of $1.7 billion .


 
 
September 30, 2018  | 9

Notes to Condensed Consolidated Financial Statements (Unaudited)

Andeavor Logistics accounted for the WNRL Merger as a common control transaction and, accordingly, inherited Andeavor’s basis in WNRL’s net assets. Andeavor accounted for the acquisition of WNRL using the acquisition method of accounting, which requires, among other things, that assets acquired at their fair values and liabilities assumed be recognized on the balance sheet as of the acquisition date, or June 1, 2017, the date Andeavor acquired WNRL. The purchase price allocation for the WNRL Merger has been allocated based on fair values of the assets acquired and liabilities assumed at the acquisition date. The allocation of the WNRL purchase price was final as of May 31, 2018. Prior to the purchase price finalization, we recorded adjustments to the allocation to increase property, plant and equipment and reduce goodwill by $7 million during 2018.

Acquisition Date Purchase Price Allocation (in millions)

Cash
$
22

Receivables
112

Inventories
11

Prepayments and Other Current Assets
25

Property, Plant and Equipment (a)
1,357

Goodwill
558

Acquired Intangibles
130

Other Noncurrent Assets
2

Accounts Payable
(167
)
Accrued Liabilities
(41
)
Debt
(347
)
Total purchase price
$
1,662


(a)
Estimated useful lives ranging from 3 to 22 years have been assumed based on the valuation.

Goodwill
We evaluated several factors that contributed to the amount of goodwill presented above. These factors include the acquisition of a logistics business located in advantageous areas where there is crude oil marketing capabilities and meaningful refining offtake with an assembled workforce that cannot be duplicated at the same costs by a new entrant. Further, the WNRL Merger provides a platform for future growth through operating efficiencies Andeavor Logistics expects to gain from the application of best practices across the combined company and an ability to realize synergies from the geographic diversification of Andeavor Logistics’ business and rationalization of general and administrative costs. We allocated $352 million , $144 million and $62 million of goodwill to the Gathering and Processing, Terminalling and Transportation, and Wholesale segments, respectively.

Property, Plant and Equipment
The fair value of property, plant and equipment is $1.4 billion . This fair value is based on a valuation using a combination of the income, cost and market approaches. The useful lives of acquired assets have been aligned to similar assets at Andeavor Logistics.

Acquired Intangible Assets
The fair value of the acquired identifiable intangible assets is $130 million . This fair value is based on valuation completed for the business enterprise, along with the related tangible assets, using a combination of the income method, cost method and comparable market transactions. We recognized intangible assets associated with customer relationships of $130 million with third parties, all of which will be amortized on a straight-line basis over a weighted average useful life of 15 years. The accumulated amortization of our finite life intangibles acquired from the WNRL Merger was $12 million as of September 30, 2018 . Amortization expense related to the acquired intangible assets is expected to be approximately $9 million per year for the next 15 years.

WNRL Revenues and Net Earnings
During the nine months ended September 30, 2018 , we recognized $303 million in revenues and $87 million of net earnings related to the business acquired.

Pro Forma Financial Information
The following unaudited pro forma information combines the historical operations of Andeavor Logistics and WNRL, giving effect to the WNRL Merger and related transactions as if they had been consummated on January 1, 2017, the beginning of the earliest period presented.


10  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Pro Forma Consolidated Revenues and Consolidated Net Earnings (in millions)

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2017
 
September 30, 2017
Revenues
$
1,094

 
$
3,172

Net earnings (a)
90

 
258


(a)
While many recurring adjustments impact the pro forma figures presented, the pro forma condensed statements of consolidated operations for the three and nine months ended September 30, 2017 includes a significant non-recurring adjustment to recognize the WNRL Merger acquisition and integration costs and reflects these costs in the first quarter of 2017, the period the acquisition was assumed to be completed for pro forma purposes. For the nine months ended September 30, 2017 , we recognized acquisition costs related to the WNRL Merger of  $17 million as well as  $3 million  of severance costs.

Post-Acquisition Financial Information

The following tables present our unaudited results of operations disaggregated to present results relating to the Partnership and the Predecessors for the assets acquired from Andeavor and the total amounts included in our combined consolidated financial statements for the three and nine months ended September 30, 2018 and 2017 .

Reconciliation of Combined Financial Statements (in millions)
 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
 
Combined
 
Andeavor Logistics LP
 
Predecessors
 
Combined
 
Andeavor Logistics LP
 
Predecessors
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
Affiliate
$
415

 
$
411

 
$
4

 
$
1,131

 
$
1,110

 
$
21

Third-party
227

 
224

 
3

 
626

 
617

 
9

Total Revenues
642

 
635

 
7

 
1,757

 
1,727

 
30

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
NGL expense (exclusive of items shown separately below)
73

 
73

 

 
166

 
166

 

Operating expenses (exclusive of depreciation and amortization)
236

 
227

 
9

 
658

 
618

 
40

Depreciation and amortization expenses
86

 
83

 
3

 
268

 
246

 
22

General and administrative expenses
31

 
30

 
1

 
91

 
82

 
9

Loss on asset disposals and impairments
1

 
1

 

 
2

 
2

 

Operating Income (Loss)
215

 
221

 
(6
)
 
572

 
613

 
(41
)
Interest and financing costs, net
(57
)
 
(56
)
 
(1
)
 
(172
)
 
(168
)
 
(4
)
Equity in earnings of equity method investments
7

 
4

 
3

 
25

 
9

 
16

Other income, net
1

 
1

 

 
4

 
3

 
1

Net Earnings (Loss)
$
166

 
$
170

 
$
(4
)
 
$
429

 
$
457

 
$
(28
)
Loss attributable to Predecessors
4

 

 
4

 
28

 

 
28

Net Earnings Attributable to Partners
170

 
170

 

 
457

 
457

 

Preferred unitholders’ interest in net earnings
(10
)
 
(10
)
 

 
(34
)
 
(34
)
 

Limited Partners’ Interest in Net Earnings
$
160

 
$
160

 
$

 
$
423

 
$
423

 
$



 
 
September 30, 2018  | 11

Notes to Condensed Consolidated Financial Statements (Unaudited)

Reconciliation of Combined Financial Statements (in millions)

 
Three Months Ended September 30, 2017
 
Nine Months Ended September 30, 2017
 
Combined
 
Andeavor Logistics LP
 
Predecessors
 
Combined
 
Andeavor Logistics LP
 
Predecessors
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
Affiliate
$
468

 
$
219

 
$
249

 
$
951

 
$
624

 
$
327

Third-party
626

 
225

 
401

 
1,184

 
653

 
531

Total Revenues
1,094

 
444

 
650

 
2,135

 
1,277

 
858

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
Cost of fuel and other (exclusive of items shown separately below) (a)
554

 

 
554

 
716

 

 
716

NGL expense (exclusive of items shown separately below)
64

 
64

 

 
179

 
179

 

Operating expenses (exclusive of depreciation and amortization)
199

 
141

 
58

 
512

 
399

 
113

Depreciation and amortization expenses
85

 
60

 
25

 
222

 
178

 
44

General and administrative expenses
44

 
27

 
17

 
107

 
78

 
29

(Gain) loss on asset disposals and impairments
1

 
1

 

 
(25
)
 
(24
)
 
(1
)
Operating Income (Loss)
147

 
151

 
(4
)
 
424

 
467

 
(43
)
Interest and financing costs, net
(68
)
 
(61
)
 
(7
)
 
(193
)
 
(184
)
 
(9
)
Equity in earnings of equity method investments
6

 
2

 
4

 
13

 
7

 
6

Other income, net
5

 
5

 

 
9

 
9

 

Net Earnings (Loss)
$
90

 
$
97

 
$
(7
)
 
$
253

 
$
299

 
$
(46
)
Loss attributable to Predecessors
7

 

 
7

 
46

 

 
46

Net Earnings Attributable to Partners
97

 
97

 

 
299

 
299

 

General partner’s interest in net earnings, including incentive distribution rights

 

 

 
(79
)
 
(79
)
 

Limited Partners’ Interest in Net Earnings
$
97

 
$
97

 
$

 
$
220

 
$
220

 
$


Divestitures

Alaska Storage and Terminalling Assets
On June 2, 2017, due to Andeavor’s consent decree with the state of Alaska associated with our 2016 acquisition of certain terminalling and storage assets owned by Andeavor, we sold one of our existing Alaska products terminals (“Alaska Terminal”) for $28 million . The sale resulted in a $25 million gain on sale in our condensed statements of consolidated operations for the nine months ended September 30, 2017. The Alaska Terminal divestiture did not have an impact on our operations.

WNRL Lubricant Operations
On June 30, 2017, WNRL sold its remaining lubricant operations located in Arizona and Nevada for  $14 million . There was no gain or loss resulting from this sale. Due to provisions in WNRL’s senior secured revolving credit facility agreement and senior notes indenture, the proceeds received from the sale of the lubricant operations were restricted to be used in the business or as a prepayment of debt. This cash was used during the third quarter of 2017 to reinvest in assets used in its business and as a payment of debt.


12  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Note 3 - Related-Party Transactions

Affiliate Agreements

The Partnership has various long-term, fee-based commercial agreements with Andeavor, under which we provide terminal distribution, storage services, pipeline transportation, crude oil, natural gas and produced water gathering and processing, wholesale, and trucking services to Andeavor, and Andeavor commits to provide us with minimum monthly throughput volumes of crude oil, refined products and other. If, in any calendar month, Andeavor fails to meet its minimum volume commitments under these agreements, it will be required to pay us a shortfall payment. For the NGLs that we handle under keep-whole agreements, the Partnership transfers the commodity risk exposure associated with these keep-whole agreements to Andeavor pursuant to the Keep-Whole Commodity Fee Agreement, as amended (the “Keep-Whole Commodity Agreement”). Under the Keep-Whole Commodity Agreement, Andeavor pays us a processing fee for NGLs related to the keep-whole agreements and delivers replacement dry gas to the producers on our behalf. We then pay Andeavor a marketing fee in exchange for assuming the commodity risk. The terms and pricing of this agreement are subject to revision each year.

In conjunction with the 2018 Drop Down, the Partnership entered into additional commercial agreements with Andeavor.

Commercial Agreements with Andeavor

 
 
 
 
Termination Provisions
Commercial Agreement
Initiation Date
Term
Renewals
Refinery Shutdown Notice Period (a)
Force Majeure
Transportation Services Agreement (LAR Interconnecting Pipelines)
August 2018
10 years
2 x 5 years
12 months
Andeavor Logistics can declare (unilateral)
Master Terminalling Services Agreement
August 2018
10 years
2 x 5 years
Master Unloading and Storage Agreement (WNRL)
August 2018
10 years
2 x 5 years
N/A
Asphalt Terminalling, Transportation and Storage Services Agreement
August 2018
10 years
2 x 5 years

(a)
Fixed minimum volumes remain in effect during routine turnarounds.

In addition, we have agreements for the provision of various general and administrative services by Andeavor. Under our partnership agreement, we are required to reimburse TLGP and its affiliates for all costs and expenses they incur on our behalf for managing and controlling our business and operations. Except to the extent specified under our amended omnibus agreement (the “Amended Omnibus Agreement”) or our amended secondment agreement (the “Amended Secondment Agreement”), TLGP determines the amount of these expenses. The Amended Omnibus Agreement was most recently amended and restated as of September 28, 2018. Under the terms of the Amended Omnibus Agreement in effect as of September 30, 2018 , we are required to pay Andeavor an annual corporate services fee of approximately $17 million for the provision of various centralized corporate services, including executive management, legal, accounting, treasury, human resources, health, safety and environmental, information technology, certain insurance coverage, administration and other corporate services. Andeavor charged the Partnership $28 million and $6 million pursuant to the Amended Secondment Agreement for the three months ended September 30, 2018 and 2017 , respectively, with $38 million and $16 million for the nine months ended September 30, 2018 and 2017 , respectively, reflecting increased services provided in conjunction with the assets acquired in the 2018 Drop Down. Additionally, pursuant to the Amended Omnibus Agreement and Amended Secondment Agreement, we reimburse Andeavor for any direct costs incurred by Andeavor in providing other operational services with respect to certain of our other assets and operations. In conjunction with the 2018 Drop Down, we entered into a construction service agreement with Andeavor to complete the construction of LARIP (the “Construction Service Agreement”). Andeavor charged the Partnership $11 million pursuant to the Construction Service Agreement during the three and nine months ended September 30, 2018 .

Summary of Affiliate Transactions

Summary of Revenue and Expense Transactions with Andeavor, Including Predecessors (in millions)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Revenues (a)
$
415

 
$
468

 
$
1,131

 
$
951

Operating expenses (b)
82

 
67

 
216

 
185

General and administrative expenses
31

 
30

 
77

 
77



 
 
September 30, 2018  | 13

Notes to Condensed Consolidated Financial Statements (Unaudited)

(a)
Andeavor accounted for 65% and 43% of our total revenues for the three months ended September 30, 2018 and 2017 , respectively, and 64% and 45% for the nine months ended September 30, 2018 and 2017 , respectively.
(b)
Net of reimbursements from Andeavor pursuant to the Amended Omnibus Agreement, the Carson Assets Indemnity Agreement and other affiliate agreements of $2 million and $7 million for the three months ended September 30, 2018 and 2017 respectively, and $12 million for both the nine months ended September 30, 2018 and 2017 .

Distributions
In accordance with our partnership agreement, the unitholders of our limited partner interests are entitled to receive quarterly distributions of available cash. During the nine months ended September 30, 2018 , we paid quarterly cash distributions of $347 million to Andeavor. On October 26, 2018 , we declared a quarterly cash distribution of $1.03 per unit, which will be paid on November 14, 2018 . The distribution will include a payment of $146 million to Marathon. TLGP’s distribution waivers for 2018 and 2019 remain in effect as instituted in 2017 under the terms of our partnership agreement.

Note 4 - Property, Plant and Equipment

Property, Plant & Equipment (in millions)

 
September 30,
2018
 
December 31, 2017 (a)
Terminals and tankage
$
3,595

 
$
3,557

Pipelines
3,344

 
2,825

Land and leasehold improvements
289

 
282

Buildings and improvements
94

 
91

Other
142

 
142

Construction in progress
501

 
346

Property, Plant and Equipment, at Cost
7,965

 
7,243

Accumulated Depreciation
(1,215
)
 
(994
)
Property, Plant and Equipment, Net
$
6,750

 
$
6,249


(a)
Property, plant and equipment transferred to the Partnership in the 2018 Drop Down was recorded at historical costs. The Partnership recorded property, plant and equipment of $948 million and accumulated depreciation of $112 million as of December 31, 2017 in connection with the 2018 Drop Down.

Note 5 - Goodwill

Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Goodwill impairment testing is performed at the reporting unit level on November 1 of each year and when circumstances change that might indicate impairment. There were no impairments of goodwill during the three and nine months ended September 30, 2018 and 2017 .

Goodwill by Operating Segment (in millions)

 
September 30,
2018
 
December 31, 2017 (a)
Terminalling and Transportation (b)
$
231

 
$
260

Gathering and Processing (b)
695

 
607

Wholesale
62

 
89

Goodwill
$
988

 
$
956


(a)
Adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.
(b)
Goodwill transferred to the Partnership in the 2018 Drop Down was recorded at historical cost. We recorded goodwill of $39 million and $225 million in our Terminalling and Transportation and Gathering and Processing segments, respectively, as of December 31, 2017 as a result of the 2018 Drop Down.


14  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Note 6 - Equity Method Investments and Joint Ventures

For each of the following investments, we have the ability to exercise significant influence over each of these investments through our participation in the management committees, which make all significant decisions. However, since we have equal or proportionate influence over each committee as a joint interest partner and all significant decisions require the consent of the other investors without regard to economic interest, we have determined that these entities should not be consolidated and apply the equity method of accounting with respect to our investments in each entity.

ALRP - We own a 67% interest in ALRP, a recently constructed crude oil pipeline located in the Delaware and Midland basins in west Texas.
MPL - We have a  17%  interest in MPL, which owns and operates a crude oil pipeline in Minnesota.
PNAC - We own a 50% interest in PNAC, which owns and operates an asphalt terminal in Nevada.
RGS - We have a 78% interest in Rendezvous Gas Services, L.L.C. (“RGS”), which owns and operates the infrastructure that transports gas from certain fields to several re-delivery points in southwestern Wyoming, including natural gas processing facilities that are owned by us or a third party.
TRG - We own a 50% interest in Three Rivers Gathering, L.L.C. (“TRG”) located in the southeastern Uinta Basin. TRG was formed with Ute Energy to transport natural gas gathered by Uintah Basin Field Services, L.L.C. (“UBFS”) and other third-party volumes to gas processing facilities.
UBFS - We own a 38% interest in UBFS, which owns and operates the natural gas gathering infrastructure located in the southeastern Uinta Basin.

Equity Method Investments (in millions)

 
ALRP (a)
 
MPL
(a)
 
PNAC (a)
 
RGS
 
TRG
 
UBFS
 
Total
Balance at December 31, 2017 (b)
$

 
$
120

 
$

 
$
268

 
$
37

 
$
15

 
$
440

Acquired interests
159

 

 
27

 

 

 

 
186

Equity in earnings
4

 
14

 

 
4

 
2

 
1

 
25

Cumulative effect of accounting standard adoption

 

 

 

 
(3
)
 

 
(3
)
Distributions received
(4
)
 
(14
)
 

 
(16
)
 
(5
)
 
(2
)
 
(41
)
Balance at September 30, 2018 (b)
$
159

 
$
120

 
$
27

 
$
256

 
$
31

 
$
14

 
$
607


(a)
These equity method investments were included in the 2018 Drop Down. Amounts were adjusted to include the historical results of the Predecessors. See Note 1 for further discussion.
(b)
The carrying amount of our investments in ALRP, MPL, PNAC, RGS, TRG and UBFS exceeded the underlying equity in net assets by $75 million , $34 million , $17 million , $127 million , $14 million and $6 million , respectively, at September 30, 2018 . The carrying amount of our investments in MPL, RGS, TRG and UBFS exceeded the underlying equity in net assets by $35 million , $130 million , $15 million and $6 million , respectively, at December 31, 2017. The carrying amounts of our investments that exceed the underlying equity in net assets are amortized over the useful life of the underlying fixed assets and included in equity in earnings (loss).

We acquired 67% of all of the issued and outstanding limited liability company interests in ALRP as part of the 2018 Drop Down. ALRP is a variable interest entity. We are not the primary beneficiary of ALRP under the partnership agreement because the Partnership and the other minor shareholder jointly direct the activities of ALRP that most significantly impact its economic performance. In addition, we have a 78% interest in RGS. ALRP and RGS are unconsolidated variable interest entities and we use the equity method of accounting with respect to our investments in each entity.

Note 7 - Debt

Debt Balance, Net of Unamortized Issuance Costs (in millions)

 
September 30,
2018
 
December 31, 2017
Total debt
$
4,878

 
$
4,182

Unamortized issuance costs
(48
)
 
(54
)
Current maturities
(1
)
 
(1
)
Debt, Net of Current Maturities and Unamortized Issuance Costs
$
4,829

 
$
4,127



 
 
September 30, 2018  | 15

Notes to Condensed Consolidated Financial Statements (Unaudited)

Available Capacity Under Credit Facilities (in millions)

 
Total
Capacity
 
Amount Borrowed as of September 30, 2018
 
Outstanding
Letters of Credit
 
Available Capacity as of September 30, 2018
 
Weighted Average Interest Rate
 
Expiration
Revolving Credit Facility (a)
$
1,100

 
$
820

 
$

 
$
280

 
3.95
%
 
January 29, 2021
Dropdown Credit Facility
1,000

 
300

 

 
700

 
3.86
%
 
January 29, 2021
Total Credit Facilities (a)
$
2,100

 
$
1,120

 
$

 
$
980

 
 
 
 

(a)
On January 5, 2018, we amended our Revolving Credit Facility to increase the aggregate commitments from $600 million to $1.1 billion and to permit the incurrence of incremental loans. We are allowed to request that the loan availability be increased up to an aggregate of $2.1 billion , subject to receiving increased commitments from the lenders.

Note 8 - Commitments and Contingencies

In the ordinary course of business, we may become party to lawsuits, disputes, administrative proceedings and governmental investigations, including environmental, regulatory and other matters. The outcome of these matters cannot always be predicted accurately, but we will accrue liabilities for these matters if the amount is probable and can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, we believe there would be no material impact on our condensed consolidated financial statements.

Note 9 - Equity and Net Earnings per Unit

We had 89,299,615  common public units and 600,000 6.875%  Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (the “Preferred Units”) outstanding as of September 30, 2018 . Additionally, Andeavor owned 156,173,128 of our common units, constituting approximately 64%  ownership interest in us. Andeavor also held 80,000  Andeavor Logistics TexNew Mex units and all of the outstanding non-economic general partner units as of September 30, 2018 .

Changes to Equity (in millions)

 
Equity of Predecessors (a)
 
Partnership
 
Total
 
 
Common
 
Preferred
 
Balance at December 31, 2017
$
1,292

 
$
2,925

 
$
589

 
$
4,806

Sponsor contributions of assets to the Predecessors
406

 

 

 
406

Loss attributable to the Predecessors
(28
)
 

 

 
(28
)
Net assets not assumed by Andeavor Logistics
(19
)
 

 

 
(19
)
Allocation of net assets acquired by the unitholders
(1,651
)
 
1,651

 

 

Distributions to common and preferred unitholders (b)

 
(620
)
 
(29
)
 
(649
)
Distributions to common unitholders related to acquisitions (c)

 
(300
)
 

 
(300
)
Net earnings attributable to partners

 
423

 
34

 
457

Cumulative effect of accounting standard adoption

 
(22
)
 

 
(22
)
Contributions (d)

 
34

 

 
34

Other

 
2

 

 
2

Balance at September 30, 2018
$

 
$
4,093

 
$
594

 
$
4,687


(a)
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
(b)
Represents cash distributions declared and paid during the nine months ended September 30, 2018 .
(c)
Distributions to common unitholders include $300 million in cash payments for the 2018 Drop Down. As an entity under common control with Andeavor, we record the assets that we acquire from Andeavor in our consolidated balance sheets at Andeavor’s historical book value instead of fair value, and any excess of cash paid over the historical book value of the assets acquired from Andeavor is recorded within equity. As a result of this accounting treatment, this transaction resulted in a net increase of $1.4 billion in our equity balance during the nine months ended September 30, 2018 .
(d)
Includes Andeavor and TLGP contributions to the Partnership primarily related to reimbursements for capital spending pursuant predominantly to the Amended Omnibus Agreement and the Carson Assets Indemnity Agreement.


16  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Cash Distributions

Our partnership agreement, as amended, sets forth the calculation to be used to determine the amount and priority of cash distributions that the limited partner unitholders will receive.

Quarterly Distributions on Common Units

Quarter Ended
Quarterly Distribution Per Common Unit
 
Total Cash Distribution
(in millions)
 
Date of Distribution
 
Unitholders Record Date
December 31, 2017 (a)
$
1.000

 
$
205

 
February 14, 2018
 
January 31, 2018
March 31, 2018 (a)
1.015

 
205

 
May 15, 2018
 
May 1, 2018
June 30, 2018 (a)
1.030

 
209

 
August 14, 2018
 
August 3, 2018
September 30, 2018 (a)(b)
1.030

 
238

 
November 14, 2018
 
November 5, 2018

(a)
This distribution is net of $15 million waived by TLGP for each of the three months ended September 30, 2018 , June 30, 2018 and March 31, 2018, as well as $12.5 million for the three months ended December 31, 2017. TLGP’s distribution waivers for 2018 and 2019 remain in effect as instituted in 2017 under the terms of our partnership agreement.
(b)
This distribution was declared on October 26, 2018 and will be paid on the date of distribution.

On August 15, 2018 and February 15, 2018, we paid distributions associated with our Preferred Units of $21 million and $8 million , respectively.

Net Earnings per Unit

Prior to the WNRL Merger, we used the two-class method when calculating the net earnings per unit applicable to limited partners, because we had more than one participating security consisting of limited partner common units, general partner units and incentive distribution rights (“IDRs”). Net earnings earned by the Partnership were allocated between the limited and general partners in accordance with our partnership agreement. At the effective time of the WNRL Merger, the IDRs were canceled (the “IDR Exchange”) and the general partner units were converted into a non-economic general partner interest in Andeavor Logistics (together with the IDR Exchange, the “IDR/GP Transaction”). As a result, the general partner units no longer participate in earnings or distributions, including IDRs. With the issuance of the Preferred Units, earnings are allocated first to the Preferred Units to equal their fixed distribution rate. We base our calculation of net earnings per unit using the weighted-average number of common limited partner units outstanding during the period.


 
 
September 30, 2018  | 17

Notes to Condensed Consolidated Financial Statements (Unaudited)

Net Earnings per Unit (in millions, except per unit amounts)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Net earnings
$
166

 
$
90

 
$
429

 
$
253

Special allocations of net earnings (“Special Allocations”) (a)

 

 

 
1

Net earnings, including Special Allocations
166

 
90

 
429

 
254

Distributions on Preferred Units (b)
(11
)
 

 
(31
)
 

Net earnings attributable to common units
155

 
90

 
398

 
254

General partner’s distributions

 

 

 
(6
)
General partner’s IDRs (c)

 

 

 
(75
)
Limited partners’ distributions on common units
(238
)
 
(201
)
 
(652
)
 
(407
)
Distributions on common units greater than earnings
$
(83
)
 
$
(111
)
 
$
(254
)
 
$
(234
)
General partner’s earnings:
 
 
 
 
 
 
 
Distributions
$

 
$

 
$

 
$
6

General partner’s IDRs (c)

 

 

 
75

Allocation of distributions greater than earnings (d)
(4
)
 
(8
)
 
(28
)
 
(48
)
Total general partner’s earnings
$
(4
)
 
$
(8
)
 
$
(28
)
 
$
33

Limited partners’ earnings on common units:
 
 
 
 
 
 
 
Distributions (e)
$
238

 
$
201

 
$
652

 
$
407

Special Allocations (a)

 

 

 
(1
)
Allocation of distributions greater than earnings
(79
)
 
(103
)
 
(226
)
 
(186
)
Total limited partners’ earnings on common units
$
159

 
$
98

 
$
426

 
$
220

Weighted average limited partner units outstanding:
 
 
 
 
 
 
 
Common units - basic
234.4

 
108.0

 
223.0

 
107.0

Common units - diluted (f)
234.6

 
108.1

 
223.2

 
107.1

Net earnings per limited partner unit: (g)
 
 
 
 
 
 
 
Common - basic
$
0.68

 
$
0.90

 
$
1.91

 
$
2.05

Common - diluted
$
0.68

 
$
0.90

 
$
1.91

 
$
2.05


(a)
Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions fully allocated to the general partner and any special allocations. The adjustment reflects the special allocation to common units held by TLGP for the interest incurred in connection with borrowings on the Revolving Credit Facility in lieu of using all cash on hand to fund the acquisition of crude oil, natural gas and produced water gathering systems and two natural gas processing facilities from Whiting Oil and Gas Corporation, GBK Investments, LLC and WBI Energy Midstream, LLC (the “North Dakota Gathering and Processing Assets”) during the nine months ended September 30, 2017 .
(b)
The Preferred Units entitle unitholders to receive preferred distributions on a semi-annually basis.
(c)
IDRs entitled the general partner to receive increasing percentages, up to 50% , of quarterly distributions in excess of $0.3881 per unit per quarter. The amount above reflects earnings distributed to our general partner net of $38 million of IDRs waived by TLGP for the nine months ended September 30, 2017 , respectively. Our general partner no longer holds IDRs as a result of the IDR/GP Transaction.
(d)
We have revised the historical allocation of general partner earnings to include the Predecessors’ losses of $4 million and $28 million for the three and nine months ended September 30, 2018 , respectively, and losses of $7 million and $46 million for the three and nine months ended September 30, 2017 , respectively.
(e)
Distributions of earnings for limited partners’ common units for the three and nine months ended September 30, 2018 is net of a $15 million and $45 million waiver, respectively, from Andeavor in connection with the WNRL Merger.
(f)
Diluted net earnings per unit include the effects of potentially dilutive units on our common units, which consist of unvested service and performance phantom units.
(g)
Amounts may not recalculate due to rounding of dollar and unit information.

Note 10 - Revenues

We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those products or services. For the three and nine months ended September 30, 2018 , revenues from contracts with customers were $528 million and $1.5 billion , respectively, which excludes lease revenues of $114 million and $292 million , respectively. Upon adoption of ASC 606, revenue is recognized net of amounts

18  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

collected from customers for taxes assessed by governmental authorities on, and concurrent with, specific revenue-producing transactions.

Service Revenue
We generate service revenue for gathering and transporting crude oil, natural gas and water; processing and fractionating natural gas and NGLs; and terminalling, transporting, and storing crude oil and refined products. We perform these services under various contractual arrangements with our customers. Under fee-based arrangements, we receive a fixed rate per volumetric unit for services we provide. For many of these fee-based arrangements, customers are required to make deficiency payments when they do not meet their minimum throughput volume commitments. Some of these contracts allow our customers to claw-back all or a portion of prior deficiency payments against excess volumes in future periods. Under keep-whole arrangements, we gather and process natural gas from producer-customers, retain and sell extracted NGLs, and return to the producer replacement dry gas (“shrink gas”) with an equivalent British thermal unit content of the NGLs retained. For these arrangements, we receive from the producer a combination of fixed rate-per unit of cash consideration as well as non-cash consideration in the form of retained NGLs. Other agreements with producers consist of POP arrangements for which we gather and purchase natural gas from the producers, process purchased natural gas, and sell resulting NGLs and shrink gas at market prices. Reimbursements of certain costs and fees received under these purchase arrangements are recorded as a reduction to NGL expense. See further discussion below on our accounting for product revenues related to the sales of products resulting from our processing activities.

We recognize service revenue over time, as customers simultaneously receive and consume the related benefits of the services that we stand ready to provide. Revenue is recognized using an output measure, such as the throughput volume or capacity utilization, as these measures most accurately depict the satisfaction of our performance obligations. Where contracts contain variable pricing terms, the variability is either resolved within the reporting period, or the variable consideration is allocated to the specific unit of service to which it relates. Deficiency payments under contracts with claw-back provisions are deferred and recognized as revenue as customers reclaim amounts by throughputting excess volumes. To the extent it is probable a customer will not recover all or a portion of the deficiency payment, the estimated residual deficiency is recognized ratably over the claw-back period. Payments for services rendered are generally received no later than 60 days from the month of service, with the exception of deficiency payments described above.

For our keep-whole arrangements, we recognize service revenue for the fair value of non-cash consideration we receive in the form of NGLs. We obtain control of the NGLs we receive from our customers, have discretion in establishing price and have the ability to direct their use. We estimate the fair value of non-cash consideration at the date we obtain control of the respective NGLs, using the monthly average published price of underlying commodity adjusted for geography and commodity specifications.

We experience volume gains and losses, which we sometimes refer to as imbalances, within our pipelines, terminals and storage facilities due to pressure and temperature changes, evaporations and variances in meter reading in other measurement methods. Some of our arrangements require us to bear losses when actual volume losses exceed a contractually specified percentage. Similarly, we receive a benefit when actual volume losses are lower than the contractually specified percentage. For gains and losses which are cash settled, we include the settlement amounts in our service revenues. We recognize non-cash consideration for the stated percentage of commodity we retain and control. We record this non-cash consideration at fair value in service revenue on a gross basis in service revenue and operating expense. The total amount of service revenue and NGL expense recorded associated with these arrangements is not material to our condensed statement of consolidated operations.

Product Revenue
We generate product revenue from the sale of NGLs and related products along with the sale of gasoline and diesel fuel within our wholesale business. We sell NGLs, shrink gas and condensate using natural gas we acquire from producers under our POP arrangements. We record revenues for the sale of these NGLs and related products at market prices, and record the payments to producers for the agreed-upon percentage of the total sales proceeds as NGL expense, net of certain charges, which is reported within costs and expenses in our condensed statement of consolidated operations.

We have certain fuel purchase and sale arrangements with Andeavor under which we receive certain minimum guaranteed margins with upside potential on a certain portion of our branded and unbranded fuel sales. Andeavor retains control of fuel and is the principal in these affiliate arrangements. Therefore, we net the purchase and sale of fuel in our condensed consolidated statements of operations.

NGLs received under keep-whole arrangements are sold to our affiliate. In return, we receive shrink gas which we then remit to the producers. This transaction is treated as a sale, for which we record the fair value of the non-cash consideration at the date we obtain control of the shrink gas. We utilize a monthly average of the published price of the commodity, adjusted for geography.

Our product sales arrangements are for specified goods for which enforceable rights and obligations are created when sales volumes are determined, which typically occurs as orders are issued or spot sales are made, but may be determined at contract inception. Each barrel, gallon or other unit of measure of product, is separately identifiable and represents a distinct performance

 
 
September 30, 2018  | 19

Notes to Condensed Consolidated Financial Statements (Unaudited)

obligation to which the transaction price is allocated based on stand-alone selling price. We use observable market prices for the products we sell to determine the stand-alone selling price of each separate performance obligation. Product revenues are recognized at a point-in-time, which generally occurs upon delivery and transfer of title to the customer. Payments for product sales are generally received within 30 days from when control has transferred.

Other Arrangements
Based on the terms of certain storage and other agreements in which the counterparty is primarily Andeavor, we are considered to be the lessor under these implicit operating lease arrangements. Income from these leases is excluded from the scope of the new revenue standard.

Customer Contract Assets

Our receivables are generated primarily from contracts with customers. Our payment terms vary by product or service type. The period between invoicing and payment is not significant, and our assets associated with contracts with customers consist primarily of billed accounts receivable, which are included in receivables, net of allowance for doubtful accounts in our condensed consolidated balance sheets. Our contract assets include amounts recognized for deficiency payments associated with minimum volume commitments which have not been billed to customers. These contract assets are included in prepayments and other current assets in our condensed consolidated balance sheets.

Customer Contract Liabilities

For certain products or services, we receive payment in advance of when performance obligations are satisfied. These liabilities from contracts with customers consist primarily of certain deficiency payments for minimum volume commitments and customer reimbursements of costs for capital projects. Customer advances for capital projects are generally recognized over the contract term. We do not have a material impact for financing components associated with these customer advances. Payments for minimum volume commitments and other customer advances are included in deferred income within other current liabilities and other noncurrent liabilities based on timing of expected recognition, which may extend up to 15 years . During the three and nine months ended September 30, 2018 , we recognized $4 million and $24 million in revenue from contract liabilities existing as of January 1, 2018, after cumulative adjustments for the adoption of ASC 606.

Summary of Customer Contract Assets and Liabilities (in millions)

 
December 31, 2017 (a)
 
Adjustments for ASC 606 (b)
 
Balance at January 1, 2018
 
September 30,
2018
Receivables from contracts with customers
$
443

 
$
(34
)
 
$
409

 
$
437

Other contract assets

 
34

 
34

 
31

Deferred income, current
23

 

 
23

 
22

Deferred income, noncurrent
43

 
19

 
62

 
64


(a)
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
(b)
These amounts exclude balances associated with equity method investments. We recognized a cumulative adjustment of $3 million as a decrease to Equity Method Investments in our condensed consolidated balance sheets as of January 1, 2018 for the impacts related to our equity method investment in Three Rivers Gathering, LLC. There were no material impacts to this balance during the nine months ended September 30, 2018 due to the adoption.

Remaining Performance Obligations
We do not disclose the value of unsatisfied performance obligations for contracts with original expected terms of one year or less or the value of variable consideration related to unsatisfied performance obligations, when such values are not required to be estimated for purposes of allocation and recognition. Revenues associated with remaining obligations under contracts with terms in excess of one year related primarily to arrangements for which the customer has agreed to fixed consideration based on minimum throughput volume commitments or capacity utilization. As of September 30, 2018 , we had $4.1 billion of expected revenues from remaining performance obligations.

The future revenues from our service arrangements with fixed fees or minimum throughput volume commitments will be recognized over the period of performance to which the fixed fee or commitment relates, which ranges from 1 year to 15 years . We expect approximately 80% of our total remaining obligations to be recognized within 5 years .

Disaggregation

We disaggregate our revenues by product and services, and further by product line. For additional information regarding our operating segments, see Note 11 .


20  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Revenue Disaggregation by Type and Product Line (in millions)

 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
 
Terminalling and Transportation
 
Gathering and Processing
 
Wholesale
 
Terminalling and Transportation
 
Gathering and Processing
 
Wholesale
Service Revenues (a)
 
 
 
 
 
 
 
 
 
 
 
Refined products
$
240

 
$

 
$
4

 
$
650

 
$

 
$
13

Crude oil and water
39

 
108

 

 
108

 
313

 

Natural gas

 
100

 

 

 
296

 

Other
1

 

 

 
4

 

 

Total Service Revenues
280

 
208

 
4

 
762

 
609

 
13

 
 
 
 
 
 
 
 
 
 
 
 
Product Revenues
 
 
 
 
 
 
 
 
 
 
 
NGL products

 
137

 

 

 
336

 

Refined products

 

 
13

 

 

 
37

Total Product Revenues

 
137

 
13

 

 
336

 
37

Total Revenues
$
280

 
$
345

 
$
17

 
$
762

 
$
945

 
$
50


(a)
Includes $114 million and $292 million of lease revenues for the three and nine months ended September 30, 2018 , respectively.

Note 11 - Operating Segments

Our revenues are derived from three operating segments: Terminalling and Transportation, Gathering and Processing and Wholesale. We evaluate the performance of our segments based primarily on segment operating income and net earnings before interest, income taxes, depreciation and amortization expenses (“EBITDA”). For the purposes of our operating segment disclosure, we present operating income as it is the most comparable measure to the amounts presented in our condensed statements of consolidated operations. Segment operating income includes those revenues and expenses that are directly attributable to management of the respective segment. Certain general and administrative expenses and interest and financing costs are excluded from segment operating income as they are not directly attributable to a specific operating segment.

Our Terminalling and Transportation segment consists of pipeline systems, including regulated common carrier refined products pipeline systems and other pipelines, which transport products and crude oil primarily from Andeavor’s refineries to nearby facilities, as well as crude oil and refined products terminals and storage facilities, marine terminals, asphalt terminals, rail-car unloading facilities, an asphalt trucking operation and a petroleum coke handling and storage facility.

Our Gathering and Processing segment consists of crude oil, natural gas, NGLs and produced water gathering systems in the Bakken Shale/Williston Basin area of North Dakota and Montana, the Green River Basin, Uinta Basin, and Vermillion Basin in the states of Utah, Colorado and Wyoming, the Delaware Basin in the Permian Basin area of West Texas and Southern New Mexico, and in the San Juan Basin in the Four Corners area of Northwestern New Mexico. It also consists of gas processing and fractionation complexes in the Bakken Shale, Green River Basin, Uinta Basin and Vermillion Basin.

Our Wholesale segment includes the operations of several bulk petroleum distribution plants and a fleet of refined product delivery trucks that distribute commercial wholesale petroleum products primarily in Arizona, Colorado, Nevada, New Mexico and Texas. The refined product trucking business delivers a significant portion of the volumes sold by our Wholesale segment.


 
 
September 30, 2018  | 21

Notes to Condensed Consolidated Financial Statements (Unaudited)

Segment Information (in millions)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
Revenues
 
 
 
 
 
 
 
Terminalling and Transportation:
 
 
 
 
 
 
 
Terminalling
$
235

 
$
189

 
$
643

 
$
493

Pipeline transportation
44

 
34

 
115

 
97

Other revenues
1

 
7

 
4

 
9

Total Terminalling and Transportation
280

 
230

 
762

 
599

Gathering and Processing:
 
 
 
 
 
 
 
NGL sales
137

 
90

 
336

 
254

Gas gathering and processing
82

 
85

 
249

 
252

Crude oil and water gathering
86

 
76

 
241

 
170

Pass-thru and other
40

 
44

 
119

 
120

Total Gathering and Processing
345

 
295

 
945

 
796

Wholesale:
 
 
 
 
 
 
 
Fuel sales (b)
13

 
565

 
37

 
730

Other wholesale
7

 
4

 
25

 
10

Total Wholesale
20

 
569

 
62

 
740

Intersegment wholesale revenues
(3
)
 

 
(12
)
 

Total Revenues
$
642

 
$
1,094

 
$
1,757

 
$
2,135

 
 
 
 
 
 
 
 
Segment Operating Income
 
 
 
 
 
 
 
Terminalling and Transportation
$
140

 
$
103

 
$
351

 
$
290

Gathering and Processing
80

 
50

 
226

 
158

Wholesale
7

 
7

 
22

 
9

Total Segment Operating Income
227

 
160

 
599

 
457

Unallocated general and administrative expenses
(12
)
 
(13
)
 
(27
)
 
(33
)
Operating Income
215

 
147

 
572

 
424

Interest and financing costs, net
(57
)
 
(68
)
 
(172
)
 
(193
)
Equity in earnings of equity method investments
7

 
6

 
25

 
13

Other income, net
1

 
5

 
4

 
9

Net Earnings
$
166

 
$
90

 
$
429

 
$
253

 
 
 
 
 
 
 
 
Depreciation and Amortization Expenses
 
 
 
 
 
 
 
Terminalling and Transportation
$
35

 
$
32

 
$
105

 
$
85

Gathering and Processing
47

 
51

 
154

 
134

Wholesale
4

 
2

 
9

 
3

Total Depreciation and Amortization Expenses
$
86

 
$
85

 
$
268

 
$
222

 
 
 
 
 
 
 
 
Capital Expenditures
 
 
 
 
 
 
 
Terminalling and Transportation
$
76

 
$
51

 
$
155

 
$
127

Gathering and Processing
110

 
41

 
368

 
85

Wholesale

 

 
1

 

Total Capital Expenditures
$
186

 
$
92

 
$
524

 
$
212


(a)
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.
(b)
The presentation of wholesale fuel sales was impacted by adoption of ASC 606 on January 1, 2018. Beginning January 1, 2018 in connection with the adoption, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor were netted.

22  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Notes to Condensed Consolidated Financial Statements (Unaudited)
 

Total Identifiable Assets by Segment (in millions)

 
September 30,
2018
 
December 31, 2017 (a)
Terminalling and Transportation
$
3,408

 
$
3,045

Gathering and Processing
6,378

 
6,006

Wholesale
354

 
342

Other
57

 
112

Total Identifiable Assets
$
10,197

 
$
9,505


(a)
Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.



 
 
September 30, 2018  | 23

Management’s Discussion and Analysis

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, references in this report to “Andeavor Logistics LP,” “Andeavor Logistics,” “the Partnership,” “we,” “us” or “our” refer to Andeavor Logistics LP, one or more of its consolidated subsidiaries or all of them taken as a whole. Unless the context otherwise requires, references in this report to Andeavor refer collectively to Andeavor for all activity through September 30, 2018 or Andeavor LLC, the surviving entity in the MPC Merger effective October 1, 2018 and a wholly owned subsidiary of MPC, and any of Andeavor’s or Andeavor LLC’s subsidiaries, as applicable, other than Andeavor Logistics, its subsidiaries and its general partner. Unless the context otherwise requires, references in this report to “Predecessors” refer collectively to the acquired businesses from Andeavor, and its assets, liabilities and results of operations.

Those statements in this section that are not historical in nature should be deemed forward-looking statements that are inherently uncertain. See “Important Information Regarding Forward-Looking Statements” section for a discussion of the factors that could cause actual results to differ materially from those projected in these statements.

This section should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2017 .

Business Strategy and Overview

Overview

We are a fee-based, growth oriented Delaware limited partnership formed by Andeavor. We are a leading full-service logistics company operating primarily in the western and inland regions of the United States. We own and operate networks of crude oil, refined products and natural gas pipelines, terminals with crude oil and refined product storage capacity, rail loading and offloading facilities, marine terminals, bulk petroleum distribution facilities, a trucking fleet and natural gas processing and fractionation complexes.

Our assets are categorized into a Terminalling and Transportation segment, a Gathering and Processing segment, and a Wholesale segment. Approximately 65% and 64% of our total revenues for the three and nine months ended September 30, 2018 , respectively, were derived from Andeavor under various long-term, fee-based commercial agreements, the majority of which include minimum volume commitments.

On October 1, 2018, MPC completed its acquisition of Andeavor, under which MPC acquired all of Andeavor’s outstanding shares. Following the MPC Merger, MPC became the beneficial owner of approximately 156 million common units out of approximately 245 million common units outstanding in the Partnership as of October 1, 2018, representing an approximate 64% limited partner interest. MPC is also the beneficial owner of 100% of the equity interests of TLGP.

Effective October 30, 2017, we completed the WNRL Merger exchanging all outstanding common units of WNRL for units of Andeavor Logistics. WNRL’s assets include terminals, storage tanks, pipelines and other logistics assets related to the terminalling, transportation, storage and distribution of crude oil, refined products and asphalt. WNRL’s assets and operations include 705 miles of pipelines, approximately 12.4 million barrels of active storage capacity, distribution of wholesale petroleum products and crude oil and asphalt trucking. This acquisition, along with the associated infrastructure and Andeavor’s refining and commercial capabilities, positions us to pursue organic growth opportunities across our combined geographic footprint including the Midland and Delaware Basins of West Texas. Refer to Items Impacting Comparability in this section for more information.

We generate revenues by charging fees for terminalling, transporting and storing crude oil, refined products and asphalt, gathering crude oil and produced water, gathering and processing natural gas and selling fuel through wholesale commercial contracts. We do not engage in the trading of crude oil, natural gas, NGLs or refined products; therefore, we have minimal direct exposure to risks associated with commodity price fluctuations as part of our normal operations. However, we have certain natural gas gathering and processing contracts structured as POP arrangements. Under these POP arrangements, we gather and process the producers’ natural gas, market the natural gas and return the majority of the proceeds to the producer. Under these arrangements, we have exposure to fluctuations in commodity prices; however, this exposure is not expected to be material to our results of operations. Also, as part of the WNRL Merger, we acquired a wholesale fuel business that has exposure to commodity prices while the refined product is being transported but are mitigated by fixed margin contracts.


24  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Business Strategy and Goals

Our primary business objectives are to maintain and grow stable cash flows. We intend to accomplish these objectives by executing the following strategies:
 
Growing a stable, fee-based business that provides a competitive,
full-service logistics offering to customers
 
 
 
 
 
 
 
Optimizing Existing Asset Base
 
    Operating an incident free workplace

    Improving operational efficiency and maximizing asset utilization

    Expanding third-party business; delivering extraordinary customer service
 
 
 
 
 
 
 
Pursuing Organic Expansion Opportunities
 
    Identifying and executing low-risk, high-return growth projects

    Investing to capture the full commercial value of logistics assets

    Growing asset capability to support Marathon’s refining and marketing business
 
 
 
 
 
 
 
Growing through Third-Party Acquisitions
 
    Pursuing assets and businesses in strategic U.S. geographies that support an integrated business model, delivering synergies and growth

    Focusing on high quality assets that provide stable, fee-based income and enhancing organizational capacity
 
 
 
 
 
 
 
Growing through Strategic Expansion
 
    Strategically partnering with Marathon on organic opportunities and acquisitions
 
 
 
 

Relative to these goals, in 2018, we intend to continue implementing this strategy and have completed or announced plans to expand our Terminalling and Transportation business across the western and inland U.S. through:

increasing our terminalling volumes by expanding capacity and growing our third-party services at certain terminals;
optimizing volumes and growing third-party throughput at our Terminalling and Transportation assets; and
pursuing strategic assets in the western and inland U.S.

In addition, we have completed or announced plans to grow our assets in our Gathering and Processing segment in support of third-party demand for crude oil, natural gas and water gathering services, natural gas processing services, as well as serving Marathon’s demand for Bakken crude oil in the inland and west coast refining systems and providing crude oil supply to support Marathon’s southwest refining system through our Permian Basin logistics assets, including:

further expanding capacity and capabilities as well as adding new origin and destination points for our common carrier pipelines in North Dakota and Montana;
expanding our crude oil, natural gas and water gathering and associated gas processing footprint in the Bakken region to enhance and improve overall basin logistics efficiencies;
expanding our crude oil gathering footprint in the Permian Basin; and
pursuing strategic assets across the western and inland U.S.

Acquisitions

2018 Drop Down
On August 6, 2018, we completed the 2018 Drop Down for total consideration of $1.55 billion . These assets include gathering, storage and transportation assets in the Permian Basin; legacy Western Refining, Inc. assets and associated crude terminals; the majority of Andeavor’s remaining refining terminalling, transportation and storage assets; and equity method investments in ALRP, MPL and PNAC. In addition, the Conan Crude Oil Gathering System and LARIP were transferred at cost plus incurred interest. The transaction was funded by issuing common units to Andeavor and the remainder with borrowings under our Dropdown Credit Facility.


 
 
September 30, 2018  | 25

Management’s Discussion and Analysis

SLC Core Pipeline System
On May 1, 2018 , we completed our acquisition of the SLC Core Pipeline System (formerly referred to as the Wamsutter Pipeline System) from Plains All American Pipeline, L.P. for total consideration of $180 million . The system consists of pipelines that transport crude oil to another third party pipeline system that supply the Salt Lake City area refineries, including Andeavor’s Salt Lake City refinery. We financed the acquisition using our Revolving Credit Facility. This acquisition is not material to our condensed consolidated financial statements and its operating results are reported in our Terminalling and Transportation segment.

Current Market Conditions

During the third quarter of 2018, the spot prices of the benchmarked commodities that we handle remained high, including crude oil, NGLs and refined products. Natural gas prices remained flat during the period. Crude oil prices maintained multi-year premiums as global producers discussed raising production levels to offset falling production from Venezuela as well as the potential of sanctions by the U.S. on Iranian exports. The U.S. benchmark crude West Texas Intermediate increased over $2 per barrel during the quarter, while U.S. production of both oil and gas again reached record levels during the third quarter. Crude inventories in the U.S. climbed up to the five-year average in the third quarter as higher refinery production offset lower U.S. crude exports. Domestic refined product demand for the third quarter remained higher year-over-year, while continued higher exports of refined products are providing incentive for U.S. refiners to maximize production of gasoline and diesel. These factors create a positive outlook for U.S. oil, gas, natural gas and refined product throughput volumes, however, regional impacts may differ.

Seasonal trends and continued healthy domestic economic conditions during the third quarter continued to support refined product demand from our downstream and marketing customers. We continue to monitor the impact of commodity prices and fundamentals as it relates to our business. Given the outlined market conditions, we believe our diversified portfolio of businesses as well as our strong customer base are sufficient to continue to meet our goals and objectives outlined above.

Results of Operations

A discussion and analysis of the factors contributing to our results of operations presented below includes the financial results of our Predecessors and the consolidated financial results of Andeavor Logistics. The financial statements of our Predecessors were prepared from the separate records maintained by Andeavor and may not necessarily be indicative of the conditions that would have existed or the results of operations if our Predecessors had been operated as an unaffiliated entity. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting future performance.

Operating Metrics

Management utilizes the following operating metrics to evaluate performance and compare profitability to other companies in the industry (amounts may not recalculate due to rounding of dollar and volume information):

Average terminalling revenue per barrel - calculated as total terminalling revenue divided by terminalling throughput presented in thousands of barrels per day (“Mbpd”) multiplied by 1,000 and multiplied by the number of days in the period, ( 92 days for both the three months ended September 30, 2018 (the “ 2018  Quarter”) and 2017 (the “ 2017  Quarter”) and 273 days for both the nine months ended September 30, 2018 (the “ 2018  Period”) and 2017 (the “ 2017  Period”);
Average pipeline transportation revenue per barrel - calculated as total pipeline transportation revenue divided by pipeline transportation throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above;
Average margin on NGL sales per barrel - calculated as the difference between the NGL sales revenues and the amounts recognized as NGL expense divided by our NGL sales volumes in barrels presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above;
Average gas gathering and processing revenue per Million British thermal units (“MMBtu”) - calculated as total gathering and processing fee-based revenue divided by gas gathering throughput presented in thousands of MMBtu per day (“MMBtu/d”) multiplied by 1,000 and multiplied by the number of days in the period as outlined above;
Average crude oil and water gathering revenue per barrel - calculated as total crude oil and water gathering fee-based revenue divided by crude oil and water gathering throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above;
Wholesale fuel sales per gallon - calculated as wholesale fuel revenues divided by our total wholesale fuel sales volume in gallons; and
Average wholesale fuel sales margin per gallon - calculated as the difference between total wholesale fuel revenues and wholesale cost of fuel and other divided by our total wholesale fuel sales volume in gallons.


26  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

There are a variety of ways to calculate average revenue per barrel, average margin per barrel, average revenue per MMBtu, sales per gallon and average margin per gallon; other companies may calculate these in different ways.

Non-GAAP Measures

As a supplement to our financial information presented in accordance with U.S. GAAP, our management uses certain “non-GAAP” measures to analyze our results of operations, assess internal performance against budgeted and forecasted amounts and evaluate future impacts to our financial performance as a result of capital investments, acquisitions, divestitures and other strategic projects. These measures are important factors in assessing our operating results and profitability and include:

Financial non-GAAP measure of EBITDA - calculated as U.S. GAAP-based net earnings before interest, income taxes and depreciation and amortization expense;
Financial non-GAAP measure of Segment EBITDA - calculated as a segment’s U.S. GAAP-based operating income before depreciation and amortization expense plus equity in earnings (loss) of equity method investments and other income (expense), net;
Liquidity non-GAAP measure of distributable cash flow - calculated as U.S. GAAP-based net cash flow from operating activities adjusted for changes in working capital, amounts spent on maintenance capital net of reimbursements and other adjustments not expected to settle in cash;
Liquidity non-GAAP measure of distributable cash flow attributable to common unitholders - calculated as distributable cash flow minus distributions associated with the Preferred Units;
Operating performance measure of average margin on NGL sales per barrel - calculated as the difference between the NGL sales revenues and the amounts recognized as NGL expense divided by our NGL sales volumes in barrels presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as previously outlined; and
Operating performance measure of average wholesale fuel sales margin per gallon - calculated as the difference between total wholesale fuel revenues and wholesale’s cost of fuel divided by our total wholesale fuel sales volumes in gallons.

We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to:

our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
our ability to incur and service debt and fund capital expenditures; and
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

Management also uses these measures to assess internal performance, and we believe they may provide meaningful supplemental information to the users of our financial statements. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings, operating income and net cash from operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures.

For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP measures to their most directly comparable U.S. GAAP financial measures, see the “Non-GAAP Reconciliations” section.

Items Impacting Comparability

Our financial results may not be comparable for the reasons described below. Other than WNRL and certain assets acquired from the 2018 Drop Down, our Predecessors did not record revenues with Andeavor and our Predecessors recorded general and administrative expenses and financed operations differently than the Partnership. See “Items Impacting Comparability” in our Annual Report on Form 10-K for the year ended December 31, 2017 for further discussion.

As previously mentioned, on August 6, 2018, we completed the 2018 Drop Down for total consideration of $1.55 billion . As an entity under common control with Andeavor, we accounted for the transfers of businesses as if the transfer occurred at the beginning of the period, and prior periods are retrospectively adjusted to furnish comparative information. Accordingly, the accompanying results of operations have been retrospectively adjusted to include the historical results of the assets acquired prior to the effective date of the acquisition.

On January 1, 2018, we adopted ASC 606 utilizing the modified retrospective method. The current period results and balances are presented in accordance with ASC 606 while comparative periods continue to be presented in accordance with the accounting standards in effect for those periods. Refer to Note 1 and Note 10 within Item 1 for further details regarding ASC 606 and the financial impact due to adoption of the standard.

 
 
September 30, 2018  | 27

Management’s Discussion and Analysis


On June 1, 2017, pursuant to the Agreement and Plan of Merger, dated as of November 16, 2016, by and among Western Refining, Inc. (“Western Refining”), Andeavor, Andeavor’s wholly-owned subsidiaries Tahoe Merger Sub 1, Inc. and Tahoe Merger Sub 2, LLC, Tahoe Merger Sub 1 was merged with and into Western Refining, with Western Refining surviving such merger as a wholly-owned subsidiary of Andeavor (the “WNR Merger”). As a result of the WNR Merger, Andeavor obtained Western Refining’s controlling interest in WNRL. Thus, the WNRL Merger was treated as a transaction of entities under common control and these condensed consolidated financial statements reflect the operations, financial position and cash flows associated with WNRL and their related subsidiaries as of June 1, 2017.

As a result of the WNRL Merger, we have presented the wholesale fuel distribution business as a separate segment and included the asphalt trucking and crude trucking operations in the Terminalling and Transportation segment and Gathering and Processing segment, respectively.

2018 3rd Quarter Versus 2017 3rd Quarter

Highlights (in millions)

CHART-6631133BCC405C74829A02.JPG CHART-C3D251D2F76B5723A8DA02.JPG CHART-3E6B267EA2485C91947A02.JPG
CHART-210C69D4774451E1A16.JPG CHART-0F508A7EC1D45A7C93EA02.JPG CHART-FF56D0CA11D55864B8BA02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding these non-GAAP measures.


28  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Percentage of Segment Operating Income by Operating Segment

CHART-D9CFD13E24A95DCE830A02.JPG CHART-BF62B4DB185450B3AA4A02.JPG

Net Earnings Attributable to Partners Reconciliation (in millions)

CHART-39C886604E695CCC867A02.JPG
Overview
Our net earnings for the 2018  Quarter increased $76 million to $166 million from $90 million for the 2017  Quarter and EBITDA increased $66 million primarily driven by the 2018 Drop Down, the SLC Core Pipeline System acquisition and our acquisition of the Anacortes Logistics Assets. Partially offsetting those contributions were increases in operating costs and depreciation and amortization expenses related to the 2018 acquisitions.

Segment Results
Operating income increased $68 million to $215 million during the 2018  Quarter compared to $147 million for the 2017  Quarter driven by the 2018 Drop Down, the SLC Core Pipeline System acquisition and our acquisition of the Anacortes Logistics Assets. Refer to our detailed discussion of each segment’s operating and financial results contained in this section.

Revenues
The $452 million decrease in revenue, or 41% , to $642 million was driven primarily by impacts of the adoption of ASC 606 on January 1, 2018. The revenues and costs associated with our fuel purchase and supply arrangements within our Wholesale segment with Andeavor were netted for the 2018 Quarter, as further described in Note 10 . This decrease was partially offset by the contributions from the 2018 Drop Down, the SLC Core Pipeline System acquisition and the acquisition of the Anacortes Logistics Assets.

Cost of Fuel and Other
Due to the adoption of ASC 606 on January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements within our Wholesale segment with Andeavor were netted for the 2018 Quarter, as noted above and further described in Note 10 .


 
 
September 30, 2018  | 29

Management’s Discussion and Analysis

NGL Expense
NGL expense increased $9 million for the 2018  Quarter compared to the 2017 Quarter primarily due to the impact from the adoption of ASC 606 on January 1, 2018. Refer to Note 10 for further information regarding the adoption of ASC 606.

Operating Expenses
Operating expenses increased $37 million for the 2018  Quarter compared to the 2017 Quarter primarily due to the 2018 Drop Down as well as the recognition of non-cash expenses recognized in connection with the adoption of ASC 606.

Interest and Financing Costs, Net
Net interest and financing costs decreased $11 million in the 2018  Quarter compared to the 2017  Quarter primarily due to lower interest rates from the refinancing of debt with new senior notes during the fourth quarter of 2017 reflecting our improved investment grade rating.

2018 Year to Date Period Versus 2017 Year to Date Period

Highlights (in millions)

CHART-9C637FE80BDD5049B53.JPG CHART-BC203D10E2285FE1BAFA02.JPG CHART-3BB46B5935BF5E088E7A02.JPG
CHART-14CF9241B46555AF8FBA02.JPG CHART-91AE299A71F050CCB3CA02.JPG CHART-FBC7E7DBD9F75F9D8FCA02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding these non-GAAP measures.


30  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Percentage of Segment Operating Income by Operating Segment

CHART-F58722FBF8615A489BAA02.JPG CHART-F4DA798CBC6B56BC921A02.JPG
Net Earnings Attributable to Partners Reconciliation (in millions)

CHART-02A57D7B7C5256B9935A02.JPG
Overview
Our net earnings for the 2018  Period increased $176 million to $429 million from $253 million for the 2017  Period and EBITDA increased $201 million primarily driven by the WNRL Merger, the 2018 Drop Down, the SLC Core Pipeline System acquisition and our acquisition of the Anacortes Logistics Assets. Partially offsetting those contributions were increases in operating costs and depreciation and amortization expenses related to the WNRL Merger and 2018 acquisitions.

Segment Results
Operating income increased $148 million to $572 million during the 2018  Period compared to $424 million for the 2017  Period driven by contributions from the WNRL Merger during the entire 2018  Period across all of our segments, the 2018 Drop Down, the SLC Core Pipeline System acquisition and our acquisition of the Anacortes Logistics Assets. Refer to our detailed discussion of each segment’s operating and financial results contained in this section.

Revenues
The $378 million decrease in revenue, or 18% , to $1.8 billion was due to the adoption of ASC 606 on January 1, 2018, partially offset by the WNRL Merger, the 2018 Drop Down, the SLC Core Pipeline System acquisition and the acquisition of the Anacortes Logistics Assets.

Cost of Fuel and Other
Due to the adoption of ASC 606 on January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor were netted for the 2018 Period, as mentioned above and further described in Note 10 .

NGL Expense
NGL expense decreased $13 million for the 2018  Period compared to the 2017 Period primarily due to the impact of ASC 606 adopted on January 1, 2018, partially offset by an increase in expense for the Robinson Lake and Belfield facilities due to higher production during the 2018 Period. Refer to Note 10 for further information regarding the adoption of ASC 606.

 
 
September 30, 2018  | 31

Management’s Discussion and Analysis


Operating Expenses
Operating expenses increased $146 million for the 2018  Period compared to the 2017 Period primarily due to the WNRL Merger as well as the recognition of non-cash expenses recognized in connection with the adoption of ASC 606.

Depreciation and Amortization Expense
Depreciation and amortization expenses increased $46 million for the 2018  Period compared to the 2017  Period largely due to the property, plant and equipment and intangibles acquired with the WNRL Merger and the 2018 Drop Down.

(Gain) Loss on Asset Disposals and Impairments
The gain on asset disposals of $25 million during the 2017 Period was due to the sale of a products terminal in Alaska.

Interest and Financing Costs, Net
Net interest and financing costs decreased $21 million in the 2018  Period compared to the 2017  Period primarily due to lower interest rates from the refinancing of debt with new senior notes during the fourth quarter of 2017 reflecting our improved investment grade credit rating.

Equity in Earnings of Equity Method Investments
The increase of $12 million in earnings of equity method investments was due to earnings from ALRP, which was acquired in January 2018, and MPL, which was acquired in June 2017.

32  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Segment Results of Operations

ANDX_TRANSPORTA24.JPG ANDXTERMINALLINGA24.JPG Terminalling and Transportation Segment

Our Terminalling and Transportation segment consists of pipeline systems, including regulated common carrier refined products pipeline systems and other pipelines, which transport products and crude oil primarily from Andeavor’s refineries to nearby facilities, as well as crude oil and refined products terminals and storage facilities, marine terminals, asphalt terminals, rail-car unloading facilities, an asphalt trucking operation and a petroleum coke handling and storage facility.

2018 3rd Quarter Versus 2017 3rd Quarter

Highlights (in millions)

CHART-1EE303CD47AD5D869BDA02.JPG CHART-801D14B1AF6451CC9D7A02.JPG CHART-25707509EE2F559CB8CA02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.

Segment Volumetric Data

CHART-9A1F7E984FFD5BF1B6DA02.JPG CHART-9F9B28B08EA95E7EB93.JPG
(a)
Adjusted to include the historical results of the Predecessors.

Volumes
Terminalling throughput volume increased 48 Mbpd, or 3% , in the 2018 Quarter compared to the 2017 Quarter. The increase in the terminalling throughput volume was primarily attributable to contributions from the SLC Core Pipeline System acquisition and the 2018 Drop Down. Pipeline transportation throughput volume increased 164 Mbpd, or 18% , in the 2018 Quarter due to continued strong product demand as well as contributions from the Anacortes Logistics Assets and the SLC Core Pipeline System acquisitions.


 
 
September 30, 2018  | 33

Management’s Discussion and Analysis

Terminalling and Transportation Segment Results (in millions, except per barrel amounts)

 
Three Months Ended September 30,
 
2018 (a)
 
2017 (a)
Revenues
 
 
 
Terminalling
$
235

 
$
189

Pipeline transportation
44

 
34

Other revenues
1

 
7

Total Revenues
280

 
230

Costs and Expenses
 
 
 
Operating expenses (b)
99

 
80

Depreciation and amortization expenses
35

 
32

General and administrative expenses
7

 
15

Gain on asset disposals and impairments
(1
)
 

Operating Income
$
140

 
$
103

Segment EBITDA (c)
$
180

 
$
142

Rates (d)
 
 
 
Average terminalling revenue per barrel
$
1.43

 
$
1.18

Average pipeline transportation revenue per barrel
$
0.45

 
$
0.40

 

Financial Results
The Terminalling and Transportation segment’s operating income increased $37 million , or 36% , and Segment EBITDA increased $38 million , or 27% , primarily driven by the SLC Core Pipeline System acquisition, the 2018 Drop Down, the acquisition of the Anacortes Logistics Assets and organic growth.

In addition, we had higher operating expenses for the 2018 Quarter related to the 2018 Drop Down and higher repair and maintenance expenses.



(a)
Adjusted to include the historical results of the Predecessors.
(b)
Operating expenses included an imbalance settlement gain of $1 million for the 2017 Quarter. There was no gain for the 2018 Quarter.
(c)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(d)
Amounts may not recalculate due to rounding of dollar and volume information.

2018 Year to Date Period Versus 2017 Year to Date Period

Highlights (in millions)

CHART-9C4DC84C05FE560497EA02.JPG CHART-686B93DF87DE5435871A02.JPG CHART-9EAC0122BC5C5794A93.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.


34  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Segment Volumetric Data

CHART-CF904E4B90135DD1BD1A02.JPG CHART-42CE857700C15E56A3AA02.JPG
(a)
Adjusted to include the historical results of the Predecessors.

Volumes
Terminalling throughput volume increased 469 Mbpd, or 34% , in the 2018 Period compared to the 2017 Period. The increase in the terminalling throughput volume was primarily attributable to the assets acquired in the WNRL Merger, the 2018 Drop Down and the SLC Core Pipeline System acquisition. Pipeline transportation throughput volume increased 108 Mbpd, or 12% , in the 2018 Period due to continued strong product demand as well as contributions from the Anacortes Logistics Assets, the SLC Core Pipeline System and the 2018 Drop Down acquisitions.

Terminalling and Transportation Segment Results (in millions, except per barrel amounts)

 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
Revenues
 
 
 
Terminalling
$
643

 
$
493

Pipeline transportation
115

 
97

Other revenues
4

 
9

Total Revenues
762

 
599

Costs and Expenses
 
 
 
Operating expenses (b)
279

 
216

Depreciation and amortization expenses
105

 
85

General and administrative expenses
27

 
33

Gain on asset disposals and impairments

 
(25
)
Operating Income
$
351

 
$
290

Segment EBITDA (c)
$
474

 
$
384

Rates (d)
 
 
 
Average terminalling revenue per barrel
$
1.28

 
$
1.32

Average pipeline transportation revenue per barrel
$
0.42

 
$
0.40

 

Financial Results
The Terminalling and Transportation segment’s operating income increased $61 million , or 21% , and Segment EBITDA increased $90 million , or 23% , primarily driven by the WNRL Merger, the 2018 Drop Down, the acquisition of the Anacortes Logistics Assets and organic growth. In addition, we had higher operating expenses as well as depreciation and amortization expenses for the entire 2018 Period related to the WNRL Merger and the SLC Core Pipeline System acquisition.

The gain on asset disposals during 2017 was due to the sale of a products terminal in Alaska.


(a)
Adjusted to include the historical results of the Predecessors.
(b)
Operating expenses included an imbalance settlement gain of $3 million for the 2017 Period. There was no gain for the 2018 Period.
(c)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(d)
Amounts may not recalculate due to rounding of dollar and volume information.


 
 
September 30, 2018  | 35

Management’s Discussion and Analysis

ANDX_GATHERINGA24.JPG ANDX_PROCESSINGA23.JPG Gathering and Processing Segment

Our Gathering and Processing segment consists of crude oil, natural gas, NGLs and produced water gathering systems in the Bakken Shale/Williston Basin area of North Dakota and Montana, the Green River Basin, Uinta Basin and Vermillion Basin in the states of Utah, Colorado and Wyoming (the “Rockies Region”), the Delaware Basin in the Permian Basin area of West Texas and Southern New Mexico, and in the San Juan Basin in the Four Corners area of Northwestern New Mexico. It also consists of gas processing and fractionation complexes in the Bakken Shale, Green River Basin, Uinta Basin and Vermillion Basin.

2018 3rd Quarter Versus 2017 3rd Quarter

Highlights (in millions)

CHART-3FFB49AD484052B6BC6A02.JPG CHART-079964B9E338504BAFEA02.JPG CHART-3397EED0329253D5805A02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.

Segment Volumetric Data

CHART-02A8839760535B8F819A02.JPG CHART-9E8959CA88765103861A02.JPG CHART-656BE06377135E9F9D6A02.JPG
(a)
Volumes represent barrels sold in keep-whole arrangements, net barrels retained in POP arrangements and other associated products.
(b)
The adoption of ASC 606 changed the presentation of our gas gathering and processing throughput volumes. Volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes as certain fees contained within our commodity contracts are now reported as a reduction of “NGL expense”. The impact of the adoption during the 2018 Quarter was 184 thousand MMBtu/d now being used internally and not reported in the throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu.
(c)
Adjusted to include the historical results of the Predecessors.

Volumes
NGL sales volumes increased in the 2018 Quarter as compared to the 2017 Quarter primarily due to ethane recovery in the Rockies region in the 2018 Quarter. Ethane recovery is the process of capturing ethane during the NGL processing stream, where it is then fractionated and sold. The decrease in gas gathering and processing throughput volumes of 239 thousand MMBtu/d, or 25% , in the 2018 Quarter as compared to the 2017 Quarter was primarily driven by the adoption of ASC 606 which changed the presentation of certain of our volumes. The impact of the adoption is described further in Note 10 . In addition, beginning in the 2018 Quarter, certain low-tariff processing agreements expired reducing our throughput approximately 45 thousand MMBtu/d. Crude oil and water throughput volumes increased 38 Mbpd, or 9% , in the 2018 Quarter primarily due to contributions from the 2018 Drop Down.


36  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Gathering and Processing Segments Results (in millions, except per barrel and per MMBtu amounts)

 
Three Months Ended
September 30,
 
2018 (a)
 
2017 (a)
Revenues
 
 
 
NGL sales (b)
$
137

 
$
90

Gas gathering and processing
82

 
85

Crude oil and water gathering
86

 
76

Pass-thru and other
40

 
44

Total Revenues
345

 
295

Costs and Expenses
 
 
 
NGL expense (excluding items shown separately below) (b)
73

 
64

Operating expenses (c)
131

 
113

Depreciation and amortization expenses
47

 
51

General and administrative expenses
12

 
16

Loss on asset disposals and impairments
2

 
1

Operating Income
$
80

 
$
50

Segment EBITDA (d)
$
130

 
$
103

Rates (e)
 
 
 
Average margin on NGL sales per barrel (b)(d)(f)
$
71.47

 
$
38.30

Average gas gathering and processing revenue per MMBtu (f)
$
1.27

 
$
0.96

Average crude oil and water gathering revenue per barrel
$
2.03

 
$
1.95

 

Financial Results
Our Gathering and Processing segment’s operating income increased $30 million , or 60% , in the 2018 Quarter compared to the 2017 Quarter. Segment EBITDA increased $27 million , or 26% , in the 2018 Quarter compared to the 2017 Quarter.

Revenues for our crude oil and water gathering systems improved due to the impact from operations obtained in the WNRL Merger and the 2018 Drop Down which increased the throughput volumes and improved our tariff mix. Revenues also increased due to continued strong volume growth in our Permian crude oil gathering during the 2018 Quarter. Revenues and NGL expense in the 2018 Quarter were impacted by expanded capacity at the Robinson Lake gas processing facility.

Revenues were also impacted by the adoption of ASC 606, as further described in Note 10 . Certain cost recoveries previously presented as service revenues are now reflected as reductions to NGL expense, resulting in an increase to the average margin on NGL sales per barrel, but an immaterial impact on our segment operating income and Segment EBITDA.

In addition, we had incremental operating expenses primarily associated with the 2018 Drop Down and ASC 606, as further described in Note 10 .


(a)
Adjusted to include the historical results of the Predecessors.
(b)
We had 24.0 Mbpd and 21.1 Mbpd of gross NGL sales under our agreements for POP and keep-whole arrangements for the 2018 Quarter and 2017 Quarter, respectively. We retained 9.5 Mbpd and 7.0 Mbpd under these arrangements, respectively. The difference between gross sales barrels and barrels retained is reflected in NGL expense resulting from the gross presentation required for the POP arrangements associated with the North Dakota Gathering and Processing Assets.
(c)
Operating expenses include an imbalance settlement gain of $1 million for the 2017 Quarter. There was no gain for the 2018 Quarter.
(d)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(e)
Amounts may not recalculate due to rounding of dollar and volume information.
(f)
Due to the adoption of ASC 606, certain cost recoveries previously presented as service revenues are now reflected as reductions to NGL expense, resulting in an increase to the average margin on NGL sales per barrel. In addition, volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu as certain fees contained within our commodity contracts are now reported as a reduction of NGL expense. The mix of remaining volumes resulted in a higher recognized gas gathering and processing rate.


 
 
September 30, 2018  | 37

Management’s Discussion and Analysis

2018 Year to Date Period Versus 2017 Year to Date Period

Highlights (in millions)

CHART-61BBEFFC4FEE59A7822A02.JPG CHART-4F79095773525207ACEA02.JPG CHART-40C7C56B73365241AF6A02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.

Segment Volumetric Data

CHART-655B03972F7F581DBA9A02.JPG CHART-791A212FD9C954CC8FDA02.JPG CHART-074E9FAEBB3C5251B02.JPG
(a)
Volumes represent barrels sold in keep-whole arrangements, net barrels retained in POP arrangements and other associated products.
(b)
The adoption of ASC 606 changed the presentation of our gas gathering and processing throughput volumes. Volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes as certain fees contained within our commodity contracts are now reported as a reduction of “NGL expense”. The impact of the adoption during the 2018 Period was 170 thousand MMBtu/d now being used internally and not reported in our throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu.
(c)
Adjusted to include the historical results of the Predecessors.

Volumes
NGL sales volumes increased in the 2018 Period as compared to the 2017 Period primarily due to ethane recovery in the Rockies region in the 2018 Period. The decrease in gas gathering and processing throughput volumes of 177 thousand MMBtu/d, or 19% , in the 2018 Period as compared to the 2017 Period was primarily driven by the adoption of ASC 606 which changed the presentation of certain of our volumes. The impact of the adoption is described further in Note 10 . Planned downtime at our Robinson Lake gas processing facility also resulted in lower volumes during the 2018 Period. Crude oil and water throughput volumes increased 49 Mbpd, or 13% , in the 2018 Period primarily due to contributions from the WNRL Merger.


38  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Gathering and Processing Segments Results (in millions, except per barrel and per MMBtu amounts)

 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
Revenues
 
 
 
NGL sales (b)
$
336

 
$
254

Gas gathering and processing
249

 
252

Crude oil and water gathering
241

 
170

Pass-thru and other (c)
119

 
120

Total Revenues
945

 
796

Costs and Expenses
 
 
 
NGL expense (excluding items shown separately below) (b)(c)
166

 
179

Operating expenses (d)
361

 
284

Depreciation and amortization expenses
154

 
134

General and administrative expenses
36

 
41

Loss on asset disposals and impairments
2

 

Operating Income
$
226

 
$
158

Segment EBITDA (e)
$
391

 
$
299

Rates (f)
 
 
 
Average margin on NGL sales per barrel (b)(c)(e)(g)
$
61.70

 
$
38.27

Average gas gathering and processing revenue per MMBtu (g)
$
1.17

 
$
0.97

Average crude oil and water gathering revenue per barrel
$
2.13

 
$
1.71

 

Financial Results
Our Gathering and Processing segment’s operating income increased $68 million , or 43% , in the 2018 Period compared to the 2017 Period. Segment EBITDA increased $92 million , or 31% , in the 2018 Period compared to the 2017 Period. The 2018 Period was impacted by planned downtime at the Robinson Lake gas processing facility to allow for a capacity expansion project, which was successfully completed within the 2018 Period.

Revenues for our crude oil and water gathering systems improved due to the impact from operations obtained in the WNRL Merger increasing the throughput volumes and improving our tariff mix. Revenues also increased due to continued strong volume growth in our Permian crude oil gathering during the 2018 Period and Andeavor’s Mandan refinery undergoing a turnaround in the 2017 Period. Revenues were also impacted by the adoption of ASC 606, as further described in Note 10 . Certain cost recoveries previously presented as service revenues are now reflected as reductions to NGL expense, resulting in an increase to the average margin on NGL sales per barrel, but had an immaterial impact on our segment operating income and Segment EBITDA.

In addition, we had incremental operating expenses and depreciation expenses primarily associated with the WNRL Merger and the adoption of ASC 606, as further described in Note 10 .


(a)
Adjusted to include the historical results of the Predecessors.
(b)
We had 24.4 Mbpd and 21.0 Mbpd of gross NGL sales under our agreements for POP and keep-whole arrangements for the 2018 Period and 2017 Period, respectively. We retained 10.1 Mbpd and 7.3 Mbpd under these arrangements, respectively. The difference between gross sales barrels and barrels retained is reflected in NGL expense resulting from the gross presentation required for the POP arrangements associated with the North Dakota Gathering and Processing Assets.
(c)
Included in the NGL expense for the 2017 Period was approximately $2 million of costs related to crude oil volumes obtained in connection with the North Dakota Gathering and Processing Assets acquisition. The corresponding revenues were recognized in pass-thru and other revenue. As such, the calculation of the average margin on NGL sales per barrel excludes this amount.
(d)
Operating expenses include an imbalance settlement gain of $4 million for the 2017 Period. There was no gain for the 2018 Period.
(e)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(f)
Amounts may not recalculate due to rounding of dollar and volume information.
(g)
Due to the adoption of ASC 606, certain cost recoveries previously presented as service revenues are now reflected as reductions to NGL expense, resulting in an increase to the average margin on NGL sales per barrel. In addition, volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu as certain fees contained within our commodity contracts are now reported as a reduction of NGL expense. The mix of remaining volumes resulted in a higher recognized gas gathering and processing rate.


 
 
September 30, 2018  | 39

Management’s Discussion and Analysis

ANDV_MARKETINGA14.JPG Wholesale

Our Wholesale segment includes the operations of several bulk petroleum distribution plants and a fleet of refined product delivery trucks that distribute commercial wholesale petroleum products primarily in Arizona, Colorado, Nevada, New Mexico and Texas. The refined product trucking business delivers a significant portion of the volumes sold by our Wholesale segment.

The Wholesale segment was added as a result of the WNRL Merger, therefore, there were only four months of activity to report for the Wholesale segment for the nine months ended September 30, 2017.

2018 3rd Quarter Versus 2017 3rd Quarter

Highlights (in millions)

CHART-BB5F8431CF445990B54.JPG CHART-FA2CE34F57CF525EA07.JPG CHART-6087808523668B00FAAA02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.


40  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Wholesale Segment Operating Results and Data (in millions, except gallons and per gallon amounts)

 
Three Months Ended
September 30,
 
2018
 
2017 (a)
Revenues
 
 
 
Fuel sales (b)
$
13

 
$
565

Other wholesale
7

 
4

Total Revenues
20

 
569

Costs and Expenses
 
 
 
Cost of fuel and other (excluding items shown separately below) (b)

 
554

Operating expenses (excluding depreciation and amortization)
9

 
6

Depreciation and amortization expenses
4

 
2

General and administrative expenses

 

Operating Income
$
7

 
$
7

Segment EBITDA (c)
$
11

 
$
9

Volumes and Rates (d)
 
 
 
Fuel sales volumes (millions of gallons)
311

 
329

Wholesale fuel sales per gallon (b)

4.0
¢
 
 
Average wholesale fuel sales margin per gallon (b)(c)
 
 

3.0
¢
 

Financial Results
The Wholesale segment’s operating income was $7 million for both the 2018 Quarter and 2017 Quarter. Segment EBITDA was $11 million and $9 million , for the 2018 Quarter and 2017 Quarter, respectively. Results for the 2018 Quarter compared to the 2017 Quarter were driven by an improved wholesale margin environment.

Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor for the 2018 Quarter were netted. Therefore, we no longer present cost of fuel and other or average margin on fuel sales per gallon. Instead, we now present wholesale fuel sales per gallon, which is not a direct comparison of the previous metric. The impact of the adoption is described further in Note 1 and Note 10 .

Volumes
Fuel sales volumes decreased 18 million gallons in the 2018 Quarter as compared to the 2017 Quarter.


(a)
Adjusted to include the historical results of the Predecessors. The Wholesale business was acquired in the WNRL Merger and only represents operations since June 1, 2017, the date the business was originally acquired by Andeavor.
(b)
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor for the 2018 Quarter were netted. Therefore, we no longer present cost of fuel and other or average margin on fuel sales per gallon. Instead, we now present wholesale fuel sales per gallon, which is not a direct comparison of the previous metric.
(c)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(d)
Amounts may not recalculate due to rounding of dollar and volume information.

2018 Year to Date Period Versus 2017 Year to Date Period

Highlights (in millions)

CHART-76C118D925AA5214B04.JPG CHART-701B32C467B15216A19.JPG CHART-72BFB5BFF804F69B9EEA02.JPG
(a)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.


 
 
September 30, 2018  | 41

Management’s Discussion and Analysis

Wholesale Segment Operating Results and Data (in millions, except gallons and per gallon amounts)

 
Nine Months Ended
September 30,
 
2018
 
2017 (a)
Revenues
 
 
 
Fuel sales (b)
$
37

 
$
730

Other wholesale
25

 
10

Total Revenues
62

 
740

Costs and Expenses
 
 
 
Cost of fuel and other (excluding items shown separately below) (b)

 
716

Operating expenses (excluding depreciation and amortization)
30

 
12

Depreciation and amortization expenses
9

 
3

General and administrative expenses
1

 

Operating Income
$
22

 
$
9

 
 
 
 
Segment EBITDA (c)
$
31

 
$
12

 
 
 
 
Volumes and Rates (d)
 
 
 
Fuel sales volumes (millions of gallons)
904

 
430

Wholesale fuel sales per gallon (b)

4.0
¢
 
 
Average wholesale fuel sales margin per gallon (b)(c)
 
 

3.0
¢
 

Financial Results
The Wholesale segment’s operating income was $22 million and $9 million and Segment EBITDA was $31 million and $12 million for the 2018 Period and 2017 Period, respectively. Results for the 2018 Period compared to the 2017 Period were driven by seasonally higher volumes and an improved wholesale margin environment.

Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor for the 2018 Period were netted. Therefore, we no longer present cost of fuel and other or average margin on fuel sales per gallon. Instead, we now present wholesale fuel sales per gallon, which is not a direct comparison of the previous metric. The impact of the adoption is described further in Note 1 and Note 10 .

Volumes
Fuel sales volumes increased 474 million gallons in the 2018 Period as compared to the 2017 Period primarily due to only four months of activity reported for the Wholesale segment for the nine months ended September 30, 2017 .


(a)
Adjusted to include the historical results of the Predecessors. The Wholesale business was acquired in the WNRL Merger and only represents operations since June 1, 2017, the date the business was originally acquired by Andeavor.
(b)
Due to the adoption of ASC 606 effective January 1, 2018, the revenues and costs associated with our fuel purchase and supply arrangements with Andeavor for the 2018 Period were netted. Therefore, we no longer present cost of fuel and other or average margin on fuel sales per gallon. Instead, we now present wholesale fuel sales per gallon, which is not a direct comparison of the previous metric.
(c)
See “Non-GAAP Reconciliations” section for further information regarding this non-GAAP measure.
(d)
Amounts may not recalculate due to rounding of dollar and volume information.



42  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Capital Resources and Liquidity

Overview

Our primary cash requirements relate to funding capital expenditures, acquisitions, meeting operational needs, servicing our debt and paying distributions to our unitholders. We expect our ongoing sources of liquidity to include cash generated from operations, reimbursement for certain maintenance and expansion expenditures, borrowings under our credit facilities and issuances of additional debt and equity securities. We believe that cash generated from these sources will be sufficient to meet our short-term working capital, long-term capital expenditure, acquisition and debt servicing requirements and allow us to fund at least the minimum quarterly cash distributions.

Capitalization

Capital Structure (in millions)

Debt, including current maturities:
September 30, 2018
 
December 31, 2017
Credit facilities
$
1,120

 
$
423

Senior notes
3,750

 
3,750

Capital lease obligations
8

 
9

Total Debt
4,878

 
4,182

Unamortized Issuance Costs
(48
)
 
(54
)
Debt, Net of Unamortized Issuance Costs
4,830

 
4,128

Total Equity
4,687

 
4,806

Total Capitalization
$
9,517

 
$
8,934


Debt Overview and Available Liquidity

Our Revolving Credit Facility, our Dropdown Credit Facility and our senior notes contain covenants that may, among other things, limit or restrict our ability (as well as the ability of our subsidiaries) to engage in certain activities. There have been no changes in these covenants from those described in our Annual Report on Form 10-K for the year ended December 31, 2017 . As of September 30, 2018 , our Revolving Credit Facility is non-recourse to Andeavor and Marathon, except for Tesoro Logistics GP, LLC, our general partner.

Available Capacity Under Credit Facilities (in millions)

Credit Facility
Total
Capacity
 
Amount Borrowed as of September 30, 2018
 
Available Capacity as of September 30, 2018
 
Weighted Average Interest Rate
 
Expiration
Revolving Credit Facility
$
1,100

 
$
820

 
$
280

 
3.95
%
 
January 29, 2021
Dropdown Credit Facility
1,000

 
300

 
700

 
3.86
%
 
January 29, 2021
Total Credit Facilities
$
2,100

 
$
1,120

 
$
980

 
 
 
 

Revolving Credit Facilities Expense and Fees

Credit Facility
30 Day Eurodollar (LIBOR) Rate at September 30, 2018
 
Eurodollar Margin
 
Base Rate
 
Base Rate Margin
 
Commitment Fee
(unused portion)
Revolving Credit Facility (a)
2.26%
 
1.75%
 
5.25%
 
0.75%
 
0.300%
Dropdown Credit Facility (a)
2.26%
 
1.76%
 
5.25%
 
0.76%
 
0.300%

(a)
We have the option to elect whether our borrowings will bear interest at a base rate plus the base rate margin, or a Eurodollar rate, for the applicable period, plus the Eurodollar margin at the time of the borrowing. The applicable margin varies based upon a certain leverage ratio, as defined by the Revolving Credit Facility. We also incur commitment fees for the unused portion of the Revolving Credit Facility at an annual rate. Letters of credit outstanding under the Revolving Credit Facility incur fees at the Eurodollar margin rate.


 
 
September 30, 2018  | 43

Management’s Discussion and Analysis

Equity Overview

Our partnership agreement authorizes us to issue an unlimited number of additional partnership securities on the terms and conditions determined by our general partner without the approval of the unitholders. Costs associated with the issuance of securities are allocated to all unitholders’ capital accounts based on their ownership interest at the time of issuance. We had  89,299,615  common public units and  600,000  Preferred Units outstanding as of  September 30, 2018 . Additionally, Andeavor owned  156,173,128  of our common units, constituting approximately  64%  ownership interest in us. Andeavor also held  80,000  Andeavor Logistics TexNew Mex units and all of the outstanding non-economic general partner units as of  September 30, 2018 .

Issuance of Preferred Units
On December 1, 2017, we issued and sold the Preferred Units at a price to the public of $1,000 per unit. Distributions on the Preferred Units will accrue and be cumulative from the original issue date of the Preferred Units and will be payable semi-annually in arrears on the 15th day of February and August of each year through and including February 15, 2023.

Cash Flow Summary

Components of our Cash Flows (in millions)

 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
Cash Flows From (Used in):
 
 
 
Operating activities
$
719

 
$
524

Investing activities
(945
)
 
(1,404
)
Financing activities
181

 
230

Decrease in Cash and Cash Equivalents
$
(45
)
 
$
(650
)

(a)
Adjusted to include the historical results of the Predecessors.

Operating Activities
Net cash from operating activities increased $195 million to $719 million in the 2018 Period compared to $524 million for the 2017 Period. The increase in cash from operating activities was primarily driven by an increase in net earnings from the 2017 Period to the 2018 Period and the change in working capital.
 

Investing Activities
Net cash used in investing activities for the 2018 Period was $945 million compared to $1.4 billion in the 2017 Period. The decrease in cash used was the result of the cash paid for acquisitions in each period and proceeds from the sale of certain Alaska terminalling assets and WNRL’s lubricant operations located in Arizona and Nevada during the 2017 Period. The 2017 Period included the acquisition of the North Dakota Gathering and Processing Assets and MPL and the 2018 Period included the acquisition of the SLC Core Pipeline System and ownership interests in ALRP and PNAC. Partially offsetting these were higher cash spend on capital expenditures during the 2018 Period. See “Capital Expenditures” below for a discussion of the expected capital expenditures for the year ended December 31, 2018 .

Financing Activities
The 2018 Period had net cash from financing activities of $181 million compared to $230 million for the 2017 Period. Sources of cash such as issuances of equity decreased by $290 million but net borrowings under our revolving credit facilities increased by $992 million . The use of our cash to make distributions to common and preferred unitholders increased $291 million and $29 million , respectively. There were no distributions to our general partner during the 2018 Period due to the IDR/GP Transaction compared to $131 million during the 2017 Period. During the 2018 Period, we made $300 million in cash payments to common unitholders for the 2018 Drop Down. There was a decrease in cash from sponsor contributions of equity to the Predecessors of $272 million .

Capital Expenditures

We expect capital expenditures for the year ended December 31, 2018 to be approximately $750 million , or approximately $720 million net of reimbursements primarily from Andeavor with whom we contract to provide services. The revised capital expenditure estimate reflects approximately $170 million attributable to amounts spent by our Predecessors during the nine months ended September 30, 2018 as well as additional capital required to complete projects included in the 2018 Drop Down and the acceleration of crude oil gathering projects in the Permian Basin. Refer to Note 2 for further information regarding the 2018 Drop Down.

During the 2018 Period, we spent $454 million on growth capital projects, net of $16 million in reimbursements primarily from Andeavor, and $42 million on maintenance capital projects, net of $12 million in reimbursements primarily from Andeavor. These include approximately $164 million and $6 million of growth and maintenance capital, respectively, spent by our Predecessors. There have been no other material changes to committed amounts for our major capital projects previously discussed in our Annual Report on Form 10-K for the year ended December 31, 2017 .


44  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Distributions

Our partnership agreement, as amended, sets forth the calculation to be used to determine the amount and priority of cash distributions that the limited partner unitholders will receive.

Quarterly Distributions
For the three months ended September 30, 2018 , June 30, 2018, March 31, 2018 and December 31, 2017 , we declared distributions of $1.03 , $1.03 , $1.015 and $1.00 per limited partnership common unit, respectively, or $4.12 , $4.12 , $4.06 and $4.00 , respectively, on an annualized basis, resulting in cash distributions of $238 million , $209 million , $205 million and $205 million , respectively. The distribution for the quarter ended September 30, 2018 will be paid November 14, 2018 to all unitholders of record as of November 5, 2018 . During the nine months ended September 30, 2018 , we paid distributions of $29 million to holders of our Preferred Units .

Environmental and Other Matters

Environmental Regulation
We are subject to extensive federal, state and local environmental laws and regulations. These laws, which change frequently, regulate the discharge of materials into the environment or otherwise relate to protection of the environment. Compliance with these laws and regulations may require us to remediate environmental damage from any discharge of petroleum, natural gas or chemical substances from our facilities or require us to install additional pollution control equipment on our equipment and facilities. Our failure to comply with these or any other environmental or safety-related regulations could result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory and remedial liabilities, and the issuance of injunctions that may subject us to additional operational constraints.

Future expenditures may be required to comply with the federal, state and local environmental requirements for our various sites, including our storage facilities, pipelines, gas processing complexes and refined products terminals. The impact of these legislative and regulatory developments, if enacted or adopted, could result in increased compliance costs and additional operating restrictions on our business, each of which could have an adverse impact on our liquidity, financial position or results of operations. See our discussion of the Amended Omnibus Agreement and the Carson Assets Indemnity Agreement in Note 3 of our Annual Report on Form 10-K for the year ended December 31, 2017 , for more information regarding the indemnification of certain environmental matters provided to us by Andeavor and discussion of other certain environmental obligations.

Non-GAAP Reconciliations

Reconciliation of Net Earnings to EBITDA (in millions)

CHART-4A6F7D938AC25F3DB94.JPG
CHART-002519B440F4518B891A02.JPG

 
 
September 30, 2018  | 45

Management’s Discussion and Analysis

Reconciliation of Segment Operating Income to Segment EBITDA (in millions)

 
Three Months Ended September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
 
2018
 
2017 (a)
 
Terminalling and Transportation
 
Gathering and Processing
 
Wholesale
Segment Operating Income
$
140

 
$
103

 
$
80

 
$
50

 
$
7

 
$
7

Depreciation and amortization expenses
35

 
32

 
47

 
51

 
4

 
2

Equity in earnings of equity method investments
4

 
4

 
3

 
2

 

 

Other income, net
1

 
3

 

 

 

 

Segment EBITDA
$
180

 
$
142

 
$
130

 
$
103

 
$
11

 
$
9

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
 
2018
 
2017 (a)
 
Terminalling and Transportation
 
Gathering and Processing
 
Wholesale
Segment Operating Income
$
351

 
$
290

 
$
226

 
$
158

 
$
22

 
$
9

Depreciation and amortization expenses
105

 
85

 
154

 
134

 
9

 
3

Equity in earnings of equity method investments
14

 
6

 
11

 
7

 

 

Other income, net
4

 
3

 

 

 

 

Segment EBITDA
$
474

 
$
384

 
$
391

 
$
299

 
$
31

 
$
12


(a)
Adjusted to include the historical results of the Predecessors.

Reconciliation of Net Cash from Operating Activities to Distributable Cash Flow (in millions)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
Net Cash from Operating Activities
$
172

 
$
225

 
$
719

 
$
524

Changes in assets and liabilities
96

 
(45
)
 
7

 
(51
)
Predecessors impact
1

 
(8
)
 
12

 
20

Maintenance capital expenditures (b)
(26
)
 
(33
)
 
(70
)
 
(80
)
Reimbursement for maintenance capital expenditures (b)
7

 
7

 
19

 
22

Proceeds from sale of assets

 

 

 
28

Adjustments for equity method investments
(6
)
 
4

 
(3
)
 
5

Changes in deferred revenue (c)
13

 
(2
)
 
8

 
5

Other (d)
5

 

 
3

 
4

Distributable Cash Flow
262

 
148

 
695

 
477

Less: Preferred unit distributions (e)
(11
)
 

 
(31
)
 

Distributable Cash Flow Attributable to Common Unitholders
$
251

 
$
148

 
$
664

 
$
477


(a)
Adjusted to include the historical results of the Predecessors.
(b)
We adjust our reconciliation of distributable cash flows for maintenance capital expenditures, tank restoration costs and expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets with an offset for any reimbursements received for such expenditures.
(c)
Included in changes in deferred revenue are adjustments to remove the impact of the adoption of the new revenue recognition accounting standard on January 1, 2018 as well as the impact from the timing of recognition with certain of our contracts that contain minimum volume commitment with clawback provisions, which are predominantly recognized annually in the third quarter based on current contract terms.
(d)
Other includes transaction costs related to recent acquisitions and settlement expenses.
(e)
Represents the cash distributions earned by the Preferred Units for the three and nine months ended  September 30, 2018  assuming a distribution is declared by the Board. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders.


46  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Management’s Discussion and Analysis
 

Average Margin on NGL Sales per Barrel (in millions, except days and per barrel amounts)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2018 (a)
 
2017 (a)
 
2018 (a)
 
2017 (a)
Segment Operating Income
$
80

 
$
50

 
$
226

 
$
158

Add back:
 
 
 
 
 
 
 
Operating expenses
131

 
113

 
361

 
284

General and administrative expenses
12

 
16

 
36

 
41

Depreciation and amortization expenses
47

 
51

 
154

 
134

Loss on asset disposals and impairments
2

 
1

 
2

 

Other commodity purchases (b)

 

 

 
2

Subtract:
 
 
 
 
 
 
 
Gas gathering and processing revenues
(82
)
 
(85
)
 
(249
)
 
(252
)
Crude oil gathering revenues
(86
)
 
(76
)
 
(241
)
 
(170
)
Pass-thru and other revenues
(40
)
 
(44
)
 
(119
)
 
(120
)
Margin on NGL Sales
$
64

 
$
26

 
$
170

 
$
77

Divided by Total Volumes for the Period:
 
 
 
 
 
 
 
NGLs sales volumes (Mbpd)
9.5

 
7.0

 
10.1

 
7.3

Number of days in the period
92

 
92

 
273

 
273

Total volumes for the period (thousands of barrels) (c)
874

 
644

 
2,757

 
1,993

Average Margin on NGL Sales per Barrel (c)
$
71.47

 
$
38.30

 
$
61.70

 
$
38.27


(a)
Adjusted to include the historical results of the Predecessors.
(b)
Included in NGL expense for the nine months ended September 30, 2017 was approximately $2 million of costs related to crude oil volumes obtained and immediately sold in connection with the North Dakota Gathering and Processing Assets acquisition.
(c)
Amounts may not recalculate due to rounding of dollar and volume information.

Average Wholesale Fuel Sales Margin per Gallon (in millions, except per gallon amounts)

 
Three Months Ended
 
Nine Months Ended
 
September 30, 2017 (a)
Segment Operating Income
$
7

 
$
9

Add back:
 
 
 
Operating expenses (excluding depreciation and amortization)
6

 
12

Depreciation and amortization expenses
2

 
3

Subtract:
 
 
 
Other wholesale revenues
(4
)
 
(10
)
Wholesale Fuel Sales Margin
$
11

 
$
14

Divided by Total Volumes for the Period:
 
 
 
Fuel sales volumes (millions of gallons)
329

 
430

Average Wholesale Fuel Sales Margin per Gallon (b)

3.0
¢
 

3.0
¢

(a)
Adjusted to include the historical results of the Predecessors. The Wholesale business was acquired in the WNRL Merger and only represent operations since June 1, 2017, the date the business was originally acquired by Andeavor.
(b)
Amounts may not recalculate due to rounding of dollar and volume information.



 
 
September 30, 2018  | 47

Management’s Discussion and Analysis

Important Information Regarding Forward-Looking Statements

This report (including information incorporated by reference) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including without limitation statements regarding our business strategy and goals, and expectations regarding revenues, cash flows, capital expenditures, other financial items, growth, acquisitions, our market position, future operations and profitability, are forward-looking statements. Forward-looking statements may be identified by use of the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar terms and phrases. Although we believe our assumptions concerning future events are reasonable, a number of risks, uncertainties and other factors could cause actual results and trends to differ materially from those projected, including, but not limited to:

changes in the expected value of and benefits derived from acquisitions, including any inability to successfully integrate acquisitions, realize expected synergies or achieve operational efficiency and effectiveness;
changes in global economic conditions on our business, on the business of our key customers, and on our customers’ suppliers, business partners and credit lenders;
a material change in the crude oil and natural gas produced in the basins where we operate;
the ability of our key customers to remain in compliance with the terms of their outstanding indebtedness;
changes in insurance markets impacting costs and the level and types of coverage available;
regulatory and other requirements concerning the transportation of crude oil, natural gas, NGLs and refined products, particularly in the areas where we operate;
changes in the cost or availability of third-party vessels, pipelines and other means of delivering and transporting crude oil, feedstocks, natural gas, NGLs and refined products;
the coverage and ability to recover claims under our insurance policies;
the availability and costs of crude oil, other refinery feedstocks and refined products;
the timing and extent of changes in commodity prices and demand for refined products, natural gas and NGLs;
changes in our cash flow from operations;
changes in our tax status;
the ability of our largest customers to perform under the terms of our gathering agreements;
the risk of contract cancellation, non-renewal or failure to perform by those in our supply and distribution chains, and the ability to replace such contracts and/or customers;
the suspension, reduction or termination of Andeavor’s obligations under our commercial agreements and our secondment agreement;
a material change in profitability among our customers;

 
direct or indirect effects on our business resulting from actual or threatened terrorist or activist incidents, cyber-security breaches or acts of war;
weather conditions, earthquakes or other natural disasters affecting operations by us or our key customers or the areas in which our customers operate;
disruptions due to equipment interruption or failure at our facilities, MPC’s or Andeavor’s facilities or third-party facilities on which our key customers are dependent;
our inability to complete acquisitions on economically acceptable terms or within anticipated timeframes;
actions of customers and competitors;
changes in our credit profile;
state and federal environmental, economic, health and safety, energy and other policies and regulations, including those related to climate change, and any changes therein and any legal or regulatory investigations, delays in obtaining necessary approvals and permits, compliance costs or other factors beyond our control;
operational hazards inherent in refining and natural gas processing operations and in transporting and storing crude oil, natural gas, NGLs and refined products;
changes in capital requirements or in expected timing, execution and benefits of planned capital projects;
seasonal variations in demand for natural gas and refined products;
adverse rulings, judgments, or settlements in litigation or other legal or tax matters, including unexpected environmental remediation costs in excess of any accruals, which affect us or MPC;
risks related to labor relations and workplace safety;
political developments; and
the factors described in greater detail under “Competition” and “Risk Factors” in Items 1 and 1A of our Annual Report on Form 10-K for the year ended December 31, 2017 , in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, and our other filings with the SEC.
All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.


48  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Quantitative and Qualitative Disclosures about Market Risk
 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our market risks as of and for the nine months ended September 30, 2018 from the risks discussed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2017 .

Item 4. Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance that the information that we are required to disclose in reports we file under the Securities Exchange Act of 1934, as amended (“the Exchange Act”), is accumulated and appropriately communicated to management. With the exception of the new Enterprise Resource Planning (“ERP”) implementation described below, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the third quarter of 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On April 1, 2018, Andeavor implemented the first phases of a new ERP system designed to upgrade the technology and improve the financial and operational information. As a result of the system implementation, we updated our framework of internal controls to reflect the system enhancements and corresponding changes to our business processes. While we believe that the ERP system and related changes to internal controls will ultimately strengthen our internal control over financial reporting, there are inherent risks in implementing a new ERP system. We will continue to evaluate and test these control changes in order to provide certification as of December 31, 2018 on the effectiveness of our internal control over financial reporting.

We carried out an evaluation required by Rule 13a-15(b) of the Exchange Act, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures at the end of the reporting period. Based on that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the reporting period.


 
 
September 30, 2018  | 49

Legal Proceedings, Risk Factors and Unregistered Sales of Equity Securities

Part II - Other Information

Item 1. Legal Proceedings

Litigation Matters
In the ordinary course of business, we may become party to lawsuits, administrative proceedings and governmental investigations, including environmental, regulatory and other matters. The outcome of these matters cannot always be predicted accurately, but we accrue liabilities for these matters if we have determined that it is probable a loss has been incurred and the loss can be reasonably estimated. While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, we believe there would be no material impact on our liquidity, financial position or results of operations.

Environmental Matters
SEC regulations require us to report certain information about any proceeding arising under federal, state or local provisions regulating the discharge of materials into the environment or protecting the environment if a governmental authority is a party to the proceeding and we reasonably believe that the proceeding will result in monetary sanctions of $100,000 or more. There were no new proceedings during the third quarter of 2018 . While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, we believe there would be no material impact on our liquidity, financial position or results of operations.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017 , except as follows:

As a result of the MPC Merger, MPC owns our general partner.

On October 1, 2018, MPC completed its acquisition of Andeavor in accordance with the MPC Merger Agreement, under which MPC acquired all of Andeavor’s outstanding shares. Upon completion of the MPC Merger, Andeavor became a wholly owned subsidiary of MPC. As a result, MPC indirectly owns an approximate 64% limited partner interest in us and 100% of our non-economic general partner interests. Conflicts of interest may arise between MPC and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts, the general partner may favor its own interests and the interests of its affiliates, including MPC, over the interests of our common unitholders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We may acquire units to satisfy tax withholdings obligations in connection with the vesting of units issued to certain employees. There were no such units acquired during the three months ended September 30, 2018 .


50  |
  ANDXLOGOHIGHRESA09.JPG
 
 

Exhibits

Item 6. Exhibits

(a) Exhibits
Exhibit Number
 
 
 
Incorporated by Reference (File No. 1-35143, unless otherwise indicated)
 
Description of Exhibit
 
Form
 
Exhibit
 
Filing Date
2.1
 
 
8-K
 
2.1
 
8/14/2017
 
 
 
 
 
 
 
 
 
2.2
 
 
8-K
 
2.1
 
11/8/2017
 
 
 
 
 
 
 
 
 
‡ 2.3
 
 
10-Q
 
2.3
 
5/7/2018
 
 
 
 
 
 
 
 
 
2.4
 
 
8-K
 
2.1
 
8/7/2018
 
 
 
 
 
 
 
 
 
*2.5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.1
 
 
8-K
 
3.1
 
10/29/2018
 
 
 
 
 
 
 
 
 
3.2
 
 
8-K
 
3.1
 
12/1/2017
 
 
 
 
 
 
 
 
 
3.3
 
 
8-K
 
3.2
 
10/2/2018
 
 
 
 
 
 
 
 
 
10.1
 
 
8-K
 
10.1
 
8/7/2018
 
 
 
 
 
 
 
 
 
*10.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.3
 
 
8-K
 
10.2
 
8/7/2018
 
 
 
 
 
 
 
 
 
*10.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
September 30, 2018  | 51

Exhibits

Exhibit Number
 
 
 
Incorporated by Reference (File No. 1-35143, unless otherwise indicated)
 
Description of Exhibit
 
Form
 
Exhibit
 
Filing Date
10.5
 
 
8-K
 
10.3
 
8/7/2018
 
 
 
 
 
 
 
 
 
10.6
 
 
8-K
 
10.4
 
8/7/2018
 
 
 
 
 
 
 
 
 
10.7
 
 
8-K
 
10.5
 
8/7/2018
 
 
 
 
 
 
 
 
 
10.8
 
 
8-K
 
10.6
 
8/7/2018
 
 
 
 
 
 
 
 
 
*10.9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*10.10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*10.11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*31.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*31.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*32.1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*32.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
**101.INS
 
XBRL Instance Document
 
 
 
 
 
 
**101.SCH
 
XBRL Taxonomy Extension Schema Document
 
 
 
 
 
 
**101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
 
 
 
**101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
 
 
 
**101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
 
 
 
**101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
 
 
 

Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC on request.
*
Filed herewith
**
Submitted electronically herewith

As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant has not filed with this Report certain instruments defining the rights of holders of long-term debt of the Registrant and its subsidiaries because the total amount of securities authorized under any of such instruments does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of any such agreements to the SEC upon request.

52  |
  ANDXLOGOHIGHRESA09.JPG
 
 


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
Andeavor Logistics LP
 
 
 
 
 
 
By:
Tesoro Logistics GP, LLC
 
 
 
Its general partner
 
 
 
 
Date:
November 7, 2018
By:
/s/ D. ANDREW WOODWARD
 
 
 
D. Andrew Woodward
 
 
 
Vice President, Finance
 
 
 
(Principal Financial Officer and Duly Authorized Signatory)


 
 
September 30, 2018  | 53
Exhibit 2.5

FIRST AMENDMENT TO
CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

This First Amendment to Contribution, Conveyance and Assumption Agreement (this “ Amendment ”), dated September 28, 2018, but effective as of August 6, 2018 (the “ Amendment Effective Date ”), is by and among Andeavor Logistics LP (the “ Partnership ”), Tesoro Logistics Operations LLC (the “ Operating Company ”), Tesoro Logistics Pipelines LLC (“ TLP ”), Western Refining Terminals, LLC (“ WRT ”), Western Refining Pipeline, LLC (“ WRP ”), Tesoro High Plains Pipeline Company LLC (“ THPPC ”), Western Refining Logistics LP (“WRLP”), Tesoro SoCal Pipeline Company LLC (“ TSPC ”), WNRL Energy LLC (“ WNRL ,” and collectively with the Partnership, the Operating Company, TLP, WRT, WRP, THPPC, WRLP, and TSPC, the “ Logistics Parties ”);
and
Andeavor (“ Andeavor ”), Tesoro Refining & Marketing Company LLC (“ TRMC ”), Western Refining Southwest, Inc. (“ WRS ”), Tesoro Great Plains Gathering & Marketing LLC (“ TGPGM ”), Tesoro Great Plains Midstream LLC (“ TGPM ” and collectively with Andeavor, TRMC, WRS, TGPGM and TGPM, the “ Andeavor Parties ”).
The above-named entities are sometimes referred to in this Amendment individually as a “ Party ” and collectively as the “ Parties .”
WHEREAS , the Parties entered into that certain Contribution, Conveyance and Assumption Agreement dated effective as of August 6, 2018 (the “ Original Agreement ”); and
WHEREAS , the Parties desire to amend the Original Agreement on the terms and conditions contained herein.
NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements herein contained, the Parties hereto agree as follows:
1.     The Parties hereby agree to delete Exhibit A, Exhibit B, Exhibit C, Exhibit J and Exhibit P attached to the Original Agreement and replace them in their entirety with Exhibit A, Exhibit B, Exhibit C, Exhibit J, and Exhibit P attached hereto and incorporated herein by reference.
2.     The Parties hereby confirm and ratify all of the terms and conditions of the Original Agreement, as amended herein, as of the Amendment Effective Date. All terms not defined herein shall have the meanings set forth in the Original Agreement.


[Signature Page Follows]


1



IN WITNESS WHEREOF, the Parties to this Amendment have caused it to be duly executed effective as of the Amendment Effective Date.
ANDEAVOR PARTIES:

ANDEAVOR


By: /s/ Gregory J. Goff          
   Gregory J. Goff
   President and Chief Executive Officer


WESTERN REFINING SOUTHWEST, INC.


By: /s/ Gregory J. Goff          
   Gregory J. Goff
   President and Chief Executive Officer


TESORO REFINING & MARKETING COMPANY LLC


By: /s/ Gregory J. Goff          
   Gregory J. Goff
   President and Chief Executive Officer


TESORO GREAT PLAINS MIDSTREAM LLC


By: /s/ Gregory J. Goff          
   Gregory J. Goff
   President and Chief Executive Officer


TESORO GREAT PLAINS GATHERING & MARKETING LLC


By: /s/ Gregory J. Goff          
   Gregory J. Goff
   President and Chief Executive Officer










Signature Page First Amendment to
Contribution, Conveyance and Assumption Agreement


LOGISTICS PARTIES:

ANDEAVOR LOGISTICS LP

By: TESORO LOGISTICS GP, LLC,
   its General Partner


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


TESORO LOGISTICS OPERATIONS LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


TESORO LOGISTICS PIPELINES LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


WESTERN REFINING TERMINALS, LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


WESTERN REFINING PIPELINE, LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


 
TESORO HIGH PLAINS PIPELINE COMPANY LLC

By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


Signature Page First Amendment to
Contribution, Conveyance and Assumption Agreement



WESTERN REFINING LOGISTICS LP

By: Western Refining Logistics GP, LLC,
       its general partner

By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer


 
WNRL ENERGY LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer




TESORO SOCAL PIPELINE COMPANY LLC


By: /s/ Steven M. Sterin           
   Steven M. Sterin
   President and Chief Financial Officer




Signature Page First Amendment to
Contribution, Conveyance and Assumption Agreement


EXHIBIT A

Mandan Tankage
Mandan Rail Rack and Trackage
Mandan LPG Truck Rack

Asset No.
Asset Description
10002782
LEVEL & PRESSURE INDICATORS FB-766,FB-767 & FB-704
10007669
M&E- RAILTRACK SOLENOID FRZ PROTECTN
10007672
M&E-ELECTR DISTR.-REF OM PRESSURIZATN LEL DETECTOR
10007674
M&E-EXCHANGER- REFINING- TNKFLD WATER DR
10007675
M&E-FIRE/SAFETY EQPT - REFINING TANKFIELD WALKWAYS
10007677
M&E - I.S.B.L.-INSTRUMENTS-REF- LIQ LEVEL ALARM
10007679
M&E - I.S.B.L. - LINES, PIPING - REF
10007681
M&E- JP-8 MODIFICTNS-ABV GRADE PIPING
10007682
M&E-I.S.B.L.-LINES, PIPING-REF- DECANTING TANK
10007683
M&E-I.S.B.L.-LINES, PIPING-REF- TNKFLD WATER DR
10007685
M&E - I.S.B.L. - LINES, PIPING - REF
10007686
M&E -MACT - CONVERT TK 746 TO METHANOL SERV
10007688
M&E - PIPE FROM TK730/733
10007689
M&E-I.S.B.L.-LINES, PIPING-REF- TANK HEADERS
10007690
M&E - I.S.B.L. - LINES, PIPING - REF - SE 731 TK.
10007691
M&E-I.S.B.L.-LINES, PIPING-REF- E TKFLD FIREWAL
10007692
M&E-ISBL LINES- FIREWTR SYS WST TKFLD (PX-1697)
10007694
M&E-I.S.B.L.-LINES, PIPING- TNKFLD WATER DRAW SYS
10007695
ISBL LINES, PIPING - FB723 REPLACE ROOF (PX-1771)
10007696
M&E-I.S.B.L.-LINES, PIPING-REF- FB RPLC ROOF
10007697
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L.
10007700
M&E- REPL LVL ALARMS ON PROPRANE DRUMS
10007701
M&E - I.S.B.L.- REF INSTR M. BUTTONS TO ACT DELUGE
10007705
M&E - LINES, ELECTRICAL LINES: -
10007710
M&E - LINES, ELECTRICAL LINES: -
10007716
M&E - LINES, ELECTRICAL LINES: -
10007717
M&E - LINES, ELECTRICAL LINES: -
10007719
M&E - LINES, ELECTRICAL LINES: -
10007720
M&E - LINES, ELECTRICAL LINES: - EF044
10007721
M&E - LINES, ELECTRICAL LINES: - EF044
10007722
M&E - LINES, ELECTRICAL LINES: - EF044
10007723
M&E - LINES, ELECTRICAL LINES: -
10007730
ELECTRICAL LINES: - TKFIELD WATER DRAW SYSTEM
10007732
M&E - LINES, ELECTRICAL LINES: - TNKFLD WATER DR
10007736
M&E - LINES, ELECTRICAL LINES: - EF042 MOTOR CON


Exhibit A – Page 1
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007737
M&E - LINES, ELECTRICAL LINES: - EF042 MOTOR CON
10007738
M&E - LINES, ELECTRICAL LINES: - EF042 MOTOR CON
10007740
M&E - LINES, ELECTRICAL LINES: -
10007741
M&E - LINES, ELECTRICAL LINES: -
10007742
M&E - LINES, ELECTRICAL LINES: - EF043
10007743
M&E - LINES, ELECTRICAL LINES: - EF043
10007744
M&E - LINES, ELECTRICAL LINES: - EF043
10007745
M&E - LINES, ELECTRICAL LINES: - 440 VOLT
10007746
M&E - LINES, ELECTRICAL LINES - JET FUEL FACILITY
10007749
ELECTR. LINES -CONVRT TK751 TO EMERG. SERV. (X-24)
10007755
M&E - LINES, ELECTRICAL LINES: - STD.TRIPLEPHASE
10007758
M&E - LINES, ELECTRICAL LINES: -
10007761
M&E - LINES, ELECTRICAL LINES: -
10007762
M&E -LOADING RACKS - REF M&E - LOADING RACKS - REF
10007763
M&E - PROCESS UNIT - STRUCTURAL STEEL - REFINING
10007764
M&E-PUC CONST-AOC REF,TRANS,SP, N- CRD GRVITOMETER
10007766
M&E-PUC CONST-AOC REF,TRANS,SP, N- TK-769-52-06-13
10007773
M&E - PUMP UNIT - REFINING PUMP POWER UNIT - FB-716 Mixer
10007780
M&E - TANK: ABOVE GROUND STORAGE
10007781
M&E - TANK: ABOVE GROUND STORAGE
10007782
M&E - TANK: ABOVE GROUND STORAGE - REF - EF12 FB-702
10007783
M&E - TANK: ABOVE GROUND STORAGE - REF - EF12 FB-702
10007784
M&E - TANK: ABOVE GROUND STORAGE - REF - EF12 FB-702
10007785
M&E - TANK: ABOVE GROUND STORAGE - REF - RISER FB-734
10007786
M&E-TANK:ABOVE GRND STORAGE-REF- 5 FOAM NOZZLES FB-705
10007787
TANK 725 - CONE ROOF
10007788
M&E - TANK: ABOVE GROUND STORAGE - REF - CONE ROOF FB-703
10007789
M&E - TANK: ABOVE GROUND STORAGE - REF - EF15 FB-703
10007790
M&E - TANK: ABOVE GROUND STORAGE - REF - EF15 FB-703
10007791
M&E - TANK: ABOVE GROUND STORAGE - REF - EF15 FB-703
10007792
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-746
10007793
M&E - TANK: ABOVE GROUND STORAGE - REF - EF188 FB-742
10007794
M&E - TANK: ABOVE GROUND STORAGE - REF - EF188 FB-742
10007795
M&E - TANK: ABOVE GROUND STORAGE - REF - EF188 FB-742
10007796
M&E-TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF FB-764
10007797
M&E-TANK:ABOVE GRND STORAGE-REF- HEATING COILS
10007798
TANK: NOZZLE ASS'MBLYS ON TANKS (MCI-2601) FB-728
10007799
TANK:ABOVE GRND STORAGE-REF- NOZZLE ASS'BLYS TK752
10007800
M&E-TANK:ABOVE GRND STORAGE-REF- LEVEL INDICATOR FB-704
10007801
M&E-TANK:ABOVE GRND STORAGE-REF- 1-1/2IN ORB VAL FB-767
10007802
M&E - TANK: ABOVE GROUND STORAGE - REFS
10007803
M&E - TANK: ABOVE GROUND STORAGE - REF - EF214 FB-752


Exhibit A – Page 2
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007804
M&E - TANK: ABOVE GROUND STORAGE - REF - EF214 FB-752
10007805
M&E - TANK: ABOVE GROUND STORAGE - REF - EF214 FB-752
10007806
TANK: ABOVE GROUND STORAGE - REFINING TANK TK-749 FB-749
10007807
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-764
10007808
M&E - TANK: ABOVE GROUND STORAGE - EF208 FB747
10007809
M&E - TANK: ABOVE GROUND STORAGE - REF - EF208 FB-747
10007810
M&E-TANK:ABOVE GRND STORAGE-REF- INSTRUMENTATION FB-704
10007811
M&E-TANK:ABOVE GRND STORAGE-REF- INSTITION TR567 FB-766
10007812
M&E-TANK:ABOVE GRND STORAGE-REF- HEATING CABLE FB-767
10007813
M&E - TANK: ABOVE GROUND STORAGE - REF - NOZZLE FB-703
10007814
M&E - TANK: ABOVE GROUND STORAGE - REF - LIGHTNIN FB-733
10007815
TANK:ABOVE GRND STORAGE-TK 765 EARTH DIKE
10007816
TANK:ABOVE GRND STORAGE - EARTH DIKE TK 765
10007817
M&E-TANK:ABOVE GRND STORAGE-REF- EF252 EARTH DK FB-765
10007818
M&E-TANK- DOOR SHEETS for TKS 713, 727, & 734
10007819
M&E-TANK:ABOVE GRND STORAGE-REF- NEW EPOXY FLOOR FB-703
10007820
M&E-TANK:ABOVE GRND STORAGE-REF- MIXER NOZZLE FB-701
10007821
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-744
10007822
M&E-TANK:ABOVE GRND STORAGE-REF- 8FT DECANTR LIN FB-715
10007823
M&E-TANK:ABOVE GRND STORAGE-REF- 89A2412801-02 FB-706
10007824
M&E-TANK:ABOVE GRND STORAGE-REF- TIE-IN DVN STGE FB-771
10007825
M&E-TANK:ABOVE GRND STORAGE-REF- CHANGE SERVICE FB-740
10007826
M&E-TANK: EXT CIRC LINES FOR ENVIRON. GAS REV. FB-728
10007827
M&E-TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF FB-729
10007828
M&E - TANK: ABOVE GROUND STORAGE - REF - EF127 FB-729
10007829
M&E - TANK: ABOVE GROUND STORAGE - TK729
10007830
M&E - TANK: ABOVE GROUND STORAGE - EF127 TK 729
10007831
M&E - TANK: ABOVE GROUND STORAGE - REF - EF190 FB-742
10007832
M&E - TANK: ABOVE GROUND STORAGE - REF - EF258
10007833
M&E - TANK: ABOVE GROUND STORAGE - REF - EF190 FB-742
10007834
M&E - TANK: ABOVE GROUND STORAGE - REF - EF190 FB-742
10007835
M&E-TANK:ABOVE GRND - 3-SAMPLE VALVES TK 757
10007836
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLASS BTM. FB-742
10007837
M&E-TANK:ABOVE GRND STORAGE-REF- EPOXY FLOOR FB-723
10007838
M&E-TANK:ABOVE GRND STORAGE-REF- EPOXY FLOOR FB-708
10007839
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-712
10007840
M&E-TANK:ABOVE GRND STORAGE-REF- MIXER NOZZLE FB-701
10007841
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-770
10007842
M&E - TANK: ABOVE GROUND STORAGE - REF - EF108 FB-725
10007843
M&E - TANK: ABOVE GROUND STORAGE - REF - EF122 FB-728
10007844
M&E - TANK: ABOVE GROUND STORAGE - REF - EF122 FB-728
10007845
M&E - TANK: ABOVE GROUND STORAGE - EF122 TK 728


Exhibit A – Page 3
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007846
M&E-TANK:ABOVE GRND STORAGE-REF- CONVERT SERVICE FB-740
10007847
TANK: ABOVE GROUND - MIXER ON TK 716 (PX-1519)
10007848
M&E - TANK: ABOVE GROUND STORAGE - NU-2 TK 723
10007849
M&E-TANK:ABOVE GRND STORAGE-REF- MIXER NOZZLE
10007850
M&E - TANK: ABOVE GROUND STORAGE - REF - CONE ROOF FB-745
10007851
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-709
10007852
M&E - TANK: ABOVE GROUND STORAGE - REF - FB-701
10007853
M&E - TANK: ABOVE GROUND STORAGE - REF - CONE ROOF FB-730
10007854
M&E - TANK: ABOVE GROUND STORAGE - TANK 704
10007855
M&E - TANK: ABOVE GROUND STORAGE - REF - TK-704
10007856
M&E - TANK: ABOVE GROUND STORAGE - REF - EF259
10007857
M&E - TANK: ABOVE GROUND STORAGE - EF140 FB732
10007858
M&E - TANK: ABOVE GROUND STORAGE - REF - EF259
10007859
M&E - TANK: ABOVE GROUND STORAGE - REF - EF140 FB-732
10007860
M&E - TANK: ABOVE GROUND STORAGE - EF140 TK-732
10007861
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-765
10007862
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-746
10007863
M&E - TANK: ABOVE GROUND STORAGE - REF - PLATFORM FB-767
10007864
M&E-TANK:ABV GRND STORGE-REF MODIFY T-735 TO T-736
10007865
M&E - TANK: ABOVE GROUND STORAGE - REF - EF172 FB-739
10007866
TANK: ABOVE GROUND STORAGE - REF -CONE ROOF TK 765
10007867
M&E-TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF 743
10007868
M&E-TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF FB-705
10007869
TANK: ABOVE GROUND STORAGE - REF - TK 739
10007870
M&E - TANK: ABOVE GROUND STORAGE - REF - EF173 FB-739
10007871
M&E - TANK: ABOVE GROUND STORAGE - REF - EF237 FB-758
10007872
M&E - TANK: ABOVE GROUND STORAGE - REF - EF237 FB-758
10007873
M&E-TANK:ABOVE GRND STORAGE-REF- DEFLECTOR PLATE FB-734
10007874
M&E - TANK: ABOVE GROUND STORAGE - REF - LADDERS FB-766
10007875
M&E-TANK:ABOVE GRND STORAGE-REF- ELECT FACILITIE FB-744
10007876
M&E - TANK: ABOVE GROUND STORAGE - REF - FIREWALL FB-770
10007878
M&E-TANK:ABOVE GRND STORAGE-REF- INSUL ROOF TK 741
10007879
M&E-TANK:ABOVE GRND STORAGE-REF- CNVT TO LDD REG FB-757
10007880
M&E-TANK:ABOVE GRND STORAGE-REF- 88A0440601 FB-734
10007881
M&E - TANK: ABOVE GROUND STORAGE - REF - EF104 FB-724
10007882
M&E - TANK: ABOVE GROUND STORAGE - REF - EF123 FB-728
10007883
M&E - TANK: ABOVE GROUND STORAGE - REF - EF123 FB-728
10007884
M&E - TANK: ABOVE GROUND STORAGE - REF - EF226 FB-755
10007885
M&E - TANK: ABOVE GROUND STORAGE - REF - EF207 FB-747
10007886
M&E - TANK: ABOVE GROUND STORAGE - REF - EF207 FB-747
10007887
M&E - TANK: ABOVE GROUND STORAGE - REF - EF207 FB-747
10007888
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-746


Exhibit A – Page 4
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007889
M&E-TANK:ABOVE GRND STORAGE-REF- DEFLECTORS FB-704
10007890
M&E-TANK:ABOVE GRND- DEFLECTORS TK 766
10007891
M&E - TANK: ABOVE GROUND STORAGE - REF - LABOR FB-770
10007892
M&E-TANK:ABOVE GRND STORAGE-REF- FLOOR COATING FB-737
10007893
M&E-TANK:ABOVE GRND STORAGE-REF- AUR PIPELN REV FB-724, FB-748
10007894
M&E - TANK: ABOVE GROUND STORAGE - REF - LIGHTNIN FB-742
10007895
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-723
10007896
M&E-TANK: FIREWATER DRAIN TK 704
10007897
M&E - TANK: ABOVE GROUND STORAGE - REF - LIGHTNIN FB-711
10007898
LIGHTNING TANK MIXERS - TK703 & TK730 (PX-1637)
10007899
M&E-TANK:ABOVE GRND STORAGE-REF- FB723 RPLC ROOF
10007901
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-758
10007902
M&E - TANK: ABOVE GROUND STORAGE - REF - EF124 FB-728
10007905
M&E - TANK: ABOVE GROUND STORAGE - REF - EF238 FB-758
10007906
TANK 758-HP CONE TK-IN SERV 1954-EF238 FB-758
10007907
M&E - TANK: ABOVE GROUND STORAGE - REF - PLATFORMS FB-759-763
10007908
M&E - TANK: ABOVE GROUND STORAGE - REF - PIPING FB-723
10007910
INSTALLATION OF MIXERS ON TKS 741 & 758
10007911
M&E - TANK: ABOVE GROUND STORAGE - REF - 558725 FB-701
10007912
M&E-TANK:ABOVE GRND STORAGE-REF- WATER VALVES FB-704
10007913
M&E-TANK:ABOVE GRND STORAGE-REF- ELECT FACILITIE FB-732
10007914
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-732
10007915
M&E - TANK: ABOVE GROUND STORAGE - REF - PIPING FB-716
10007916
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-771
10007917
AIR BLOWING FACILITIES FOR FB-714 D.O. TANK
10007918
TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF TK 723
10007919
M&E - TANK: ABOVE GROUND STORAGE - REF - EF103 724
10007920
TANK: ABOVE GROUND STORAGE - TANK 701
10007921
M&E-TANK:ABOVE GRND STORAGE-REF- FLOATING ROOF FB-748
10007922
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-758
10007923
TANK 750 - FLOATING ROOF
10007924
M&E-TANK:ABOVE GRND STORAGE-REF- SITE PREP-TK-764
10007925
M&E-TANK:ABOVE GRND STORAGE-REF- CONCRETE BAFFLE - Fire Protection
10007926
M&E - TANK: ABOVE GROUND STORAGE - REF - GRADING FB-759 - 763
10007927
REPLACING WOODEB SLEEPERS IN TK FIELD & PIPE ALLEY
10007928
M&E-TANK:ABOVE GRND STORAGE-REF- W/CONE ROOF FB-731
10007929
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-737
10007930
M&E-TANK:ABOVE GRND STORAGE-REF- REVISE HEADER FB-751
10007931
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-768
10007932
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-714 & 715
10007933
M&E - TANK: ABOVE GROUND STORAGE - REFINING TANK FB-741
10007934
M&E-TANK:ABOVE GRND STORAGE-REF- FIREWALL DRAIN FB-716


Exhibit A – Page 5
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007935
M&E-TANK:ABOVE GRND STORAGE-REF- REVISE PIPING FB-734
10007936
M&E-TANK:ABOVE GRND STORAGE-REF- LEVEL SYSTEM FB-766
10007938
M&E-TANK:ABOVE GRND STORAGE-REF- TRACE GAGE LINE FB-767
10007939
M&E-TANK:ABOVE GRND STORAGE-REF- FOAM INJ.NOZZLE FB-752
10007940
M&E-TANK:ABOVE GRND STORAGE-REF- TRACE GAGE LINE FB-767
10007941
M&E-TANK:ABOVE GRND STORAGE-REF- FLEX ROOF DRAIN FB-740
10007942
M&E-TANK:ABOVE GRND STORAGE-REF- REVISE PIPING FB-734
10007943
M&E-TANK:ABOVE GRND STORAGE-REF- REVISE PIPING FB-734
10007944
M&E-TANK:ABOVE GRND STORAGE-REF- LEVEL INDICATOR FB-767
10007945
M&E-TANK:ABOVE GRND- FOAMITE NOZZLES TK 724
10007946
M&E - TANK: ABOVE GROUND STORAGE - TK 771
10007947
M&E-TANK: FLEX.ROOF DRAIN TK 740
10007948
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLASS BTM. FB-742
10007949
TANK ABOVE GRND - EPOXY FLOOR TK 708 (PX-3513)
10007950
M&E-TANK:ABOVE GRND STORAGE-REF- EPOXY FLOOR FB-723
10007951
M&E - TANK: ABOVE GROUND STORAGE - REF - NOZZLE FB-703
10007952
M&E-TANK:ABOVE GRND STORAGE-REF- S/N 8421318701 FB-701
10007953
M&E-TANK:ABOVE GRND STORAGE-REF- MIXER NOZZLE FB-701
10007954
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-710
10007955
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-709
10007956
TANK: ABOVE GROUND STORAGE- REF - CONE ROOF TK-745
10007957
CONVERT TK757 TO LDED & TK 732 TO TYPE A
10007958
M&E-TANK:ABOVE GRND STORAGE-REF- LIGHTNIN W/25HP FB-750
10007959
M&E-TANK:ABOVE GRND STORAGE-REF- FIBERGLAS FLOOR FB-744
10007963
RAILROAD EQPT RR40 RAIL LOADING FACILITY UPGRADE
10010043
DYED LS1 AND LS2
10010056
RAIL CLASS YARD EXPANSION
10010072
UPGD FIRE PROT ON BUTANE SPHERE
10010075
INSTAL LEVL ALRM RV COLLECTN PO
10010076
DCS INSTLN OM/CHG ORDR EX C&O P
10010689
MERCAPTAN INJECTION SYSTEM
10011037
RESIDENCE TANK FB-745 CONVERSION
10011045
RESIDENCE TANK FB-745 CONVERSION
10011049
MERCAPTAN INJECTION SYSTEM
10011159
FB728 TANK INTERNAL FLOATING PAN AND CONE ROOF
10011333
ROOF REPLACEMENT - TANK FB720
10011415
M&E - I.S.B.L. - INSTRUMENTS - REFINING
10011416
PIPING TO UNLOAD FIELD BUTANE
10011454
FLOATING SUCTION - FB731 HVN TANK
10011482
M&E - I.S.B.L. - LINES, PIPING
10011491
TANKFIELD PIPING - DDU ULSD OSBL
10011494
TANKFIELD PIPING PLATFORMS - DDU ULSD OSBL


Exhibit A – Page 6
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10011545
FLOAT SUCTION - FB771 DEBUTANIZED VIRGIN NAPTHA TK
10011680
TANKFIELD PIPING - DDU ULSD OSBL
10011922
M&E - ISBL,LINES, PIPING - FOR TK 757 (PX-3505)
10011923
4" PIPING - LCO RAILRACK
10011978
TANK 729 ROOF UPGRADE
10012299
PIPES & VALVES - ULSD OSBL HANDLING
10012301
MIXER-GD719A - TANK-FB719 - ULSD OSBL HANDLING
10012302
TANK MODIFICATIONS-FB703, FB710, FB711 - ULSD OSBL
10012303
INSTRUMENTATION - ULSD OSBL HANDLING
10012322
M&E-I.S.B.L.-LINES, PIPING-REF- 2409'LF GASOL
10012323
M&E - I.S.B.L. - 4" LEAD-FREE CIRCULATION LINE
10012613
ETHANOL IMPLEMENTATION - TANK 740 LOADING PUMP
10012614
ETHANOL IMPLEMENTATION - TANK 740 LOADING STATION
10012615
ETHANOL IMPLEMENTATION - PIPES, VALVES & FITTINGS
10012616
ETHANOL IMPLEMENTATION - TANK 758 ROOF
10012995
TANK FB-752 - DOUBLE BOTTOM FLOOR
10013027
ISBL LINES & PIPING - IMPROVE C3, C4, LPG HANDLING
10013028
CONCRETE PIER SUPPORTS - LCO RAILRACK
10013810
M&E - FIRE/SAFETY EQPT - REFINING WTR.TO GA-759S
10013886
TANK FB-752 - DOUBLE BOTTOM FLOOR
10014101
GA-771 DUAL TANDEM SEAL ASSEMBLY
10014102
GA-771S DUAL TANDEM SEAL ASSEMBLY
10014103
GA-772 DUAL TANDEM SEAL ASSEMBLY
10014104
GA-772S DUAL TANDEM SEAL ASSEMBLY
10014319
OIL MOVEMENT (O.M.) -BLOCK / BLEED VALVES & PIPING
10014335
GA-780 HVN CHARGE PUMP
 
FB-707 TANK MODIFICATIONS - WET GAS SCRUBBER
10014814
LPG RERUN PUMP WITH VFD DRIVE - GA-758
10014815
PIPE, VALVES, AND FITTINGS- OFF-SPEC LPG RERUN SYS
10015864
FB-723 Tank Bottom
10016601
FB-717 (2 SETS OF 5 SAMPLE TABS)
10016602
FB-718 (2 SETS OF 5 SAMPLE TABS)
10016603
FB-719 (2 SETS OF 5 SAMPLE TABS)
10016604
FB-720 (2 SETS OF 5 SAMPLE TABS)
10016605
FB-726 (2 SETS OF 5 SAMPLE TABS)
10016606
FB-730 (2 SETS OF 8 SAMPLE TABS)
10016607
FB-732 (2 SETS OF 8 SAMPLE TABS)
10016608
FB-733 (2 SETS OF 8 SAMPLE TABS)
10016609
FB-734 (2 SETS OF 8 SAMPLE TABS)
10016610
FB-723 (2 SETS OF 8 SAMPLE TABS)
10016611
FB-725 (2 SETS OF 5 SAMPLE TABS)
10016612
FB-729 (2 SETS OF 5 SAMPLE TABS)


Exhibit A – Page 7
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10016613
FB-740 (2 SETS OF 5 SAMPLE TABS)
10016614
FB-748 (2 SETS OF 5 SAMPLE TABS)
10016615
FB-750 (2 SETS OF 5 SAMPLE TABS)
10016616
FB-752 (2 SETS OF 5 SAMPLE TABS)
10017148
FB-701 AUTOMATIC TANK GAUGING SYSTEM
10017149
FB-702 AUTOMATIC TANK GAUGING SYSTEM
10017150
FB-753 AUTOMATIC TANK GAUGING SYSTEM
10017151
FB-723 AUTOMATIC TANK GAUGING SYSTEM
10017152
FB-740 AUTOMATIC TANK GAUGING SYSTEM
10017153
FB-725 AUTOMATIC TANK GAUGING SYSTEM
10017154
FB-729 AUTOMATIC TANK GAUGING SYSTEM
10017155
FB-748 AUTOMATIC TANK GAUGING SYSTEM
10017156
FB-750 AUTOMATIC TANK GAUGING SYSTEM
10017157
FB-752 AUTOMATIC TANK GAUGING SYSTEM
10017158
FB-714 AUTOMATIC TANK GAUGING SYSTEM
10017159
FB-715 AUTOMATIC TANK GAUGING SYSTEM
10017160
FB-741 AUTOMATIC TANK GAUGING SYSTEM
10017161
ELECTR./CIVIL INFRASTRUCTURE - AUTO TANK GAUGING
10017162
AUTOMATIC TANK GAUGING PC HARDWARE
10017163
AUTOMATIC TANK GAUGING PC SOFTWARE (ENTIS XL)
10017722
PIPE, VALVES, FITTINGS
10017728
FB-716 NEW ROOF, INTERNAL COATING, AND GAUGE POLE
10017729
FB-718 NEW GAUGE POLE AND COATING
10017730
DISTILLATE SURGE TANK CONTROL VALVE USV-718
10017731
GASOLINE SURGE TANK CONTROL VALVE USV-716
10017732
TANK 716 LEVEL GAUGE LT-7716
10017733
TANK 718 LEVEL GAUGE LT-7718
10017734
TANK 718 TEMPERATURE TRANSMITTER TUT-7718
10017735
TANK 716 TEMPERATURE TRANSMITTER TUT-7716
10017736
TANK 718 HIGH LEVEL SWITCH LSHH-7718
10017737
TANK 716 HIGH LEVEL SWITCH LSHH-7716
10017738
4” PIPING FROM FB-727 TO FB-733
10017738
4" PIPING FROM FB-727 TO FB-733
10019266
SAMPLE TAPS FOR TANK 711
10019401
FB-705 CONE ROOF
10019402
FB-705 ALUMINUM INTERNAL FLOATING ROOF
10019403
FB-705 FOAM CHAMBERS
10019508
TANK 703 NEW DOUBLE BOTTOM
10019509
TANK 703 FOAM CHAMBERS
10019531
TANK 703 NEW BERM
10019755
PIPE/VALVES/FITTINGS - PUMP SUCTION AND DISCHARGE
10021206
LEVEL TRANSMITTER: TKS 711,717,726,727,730,733,734


Exhibit A – Page 8
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10021207
TEMP TRANSMITTERS: TKS 711,717,726,727,730,733,734
10021208
LEVEL ALARMS: TKS 711,717, 726,727,730, 733,734
10021209
LADDER ON TANK FB-741
10021210
LADDER ON TANK FB-715
10021211
PLATFORM FOR FB-702
10021212
PLATFORM FOR FB-717
10021213
PLATFORM FOR FB-752
10021214
GAUGE POLE FOR FB-711
10021215
NEW NOZZLES FOR FB-726 (NO GAUGE POLE)
10021216
GAUGE POLE FOR FB-727
10021217
GAUGE POLE FOR FB-730
10021218
GAUGE POLE FOR FB-733
10021219
GAUGE POLE FOR FB-734
10021220
CONTROL SYSTEM SOFTWARE
10022256
PIPING FOR KEROSENE INJECTION INTO HEATER OIL
10022357
FB-753 NEW DOUBLE BOTTOM WITH COATING
10022358
FB-753 TANK BASIN UPGRADE
10022462
FB-709 NEW DOUBLE BOTTOM WITH COATING
10022463
FB-709 TANK BASIN UPGRADE
10022797
EMERGENCY SHUT-OFF VALVE USV-6754 & CONDUIT/CABLE
10022798
PIPING ASSOCIATED WITH USV-6754
10022799
LEVEL TRANSMITTER: TANK 747
10022800
TEMP TRANSMITTERS TANK 747
10022801
LEVEL ALARM: TANK 747
10022802
CONTROL SYSTEM SOFTWARE
10023702
FB-712 NEW DOUBLE BOTTOM
10023703
FB-712 FOAM PIPING AND CHAMBERS
30000664
Electrical/Instrument Components
30001339
Concrete/Earth
95000461
Repair Costs
95000462
Repair Costs
99000364
TANK 727 FLOOR COATING & REPAIRS
99000370
TANK 764- NEW DOUBLE BOTTOM FLOOR
99000371
TANK 764 - MAJOR PLANNED UPGRADES
99000445
TANK 718 NEW CONE ROOF & COATING
99000454
FB-736 DOUBLE BOTTOM FLOOR
99000455
FB-736 CONE ROOF
99000765
FB-701 TANK RESTORATION COSTS
99000855
FB-728 MISC. REPAIRS AND COATINGS
99000947
FB-714 RING #1
99000948
FB-714 MISC. BOTTOM PATCHING
99000972
FB-727 SECOND COURSE PARTIAL REPLACEMENT


Exhibit A – Page 9
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
99001051
FB-771 PRIMARY SEAL
99001052
FB-771 SECONDARY SEAL
99001053
FB-771 ERF SUMP
99001159
FB-771 TANK BASIN UPGRADE
99001320
FB-753 TANK RESTORATION
99001460
FB-731 OUTER RIM REPLACE AND TANK INSP
99001477
FB-709 CONE ROOF REPLACEMENT
99001667
FB-702 MISC REPAIRS TO PRIMARY & SECONDARY SEALS;
99001668
FB-715 SHELL REPAIRS
99001675
FB-747 BOTTOM REPAIRS
10005992
M&E - I.S.B.L.-INSTRUMENTS-REF- SILVER GASOLINE
10006089
M&E-I.S.B.L.-LINES, PIPING-REF- TK 705 HVN SVC
10006104
FACILITIES TO BLEND RR 40 DSL IN TK 744
10006213
M&E-I.S.B.L.-LINES, PIPING-REF- L.FREE PREMIUM
10006218
M&E-I.S.B.L.-LINES, PIPING-REF- INSUL.&HT.TRACE crude line
10006220
M&E-I.S.B.L.-LINES, PIPING-REF- INSUL.&HT.TRACE crude line
10006238
M&E-I.S.B.L.-LINES, PIPING-REF- SILVER GASOLINE
10006247
M&E - LINES, ELECTRICAL LINES: - EXT LTNG FB-750
10006268
M&E - PUMP UNIT - REFINING - GA730S FLO BYPS
10006289
M&E - PUMP UNIT - REFINING - C3 LOADING
10006320
M&E - PUMP UNIT - REFINING - SITE PREP. GA - 778
10006009
M&E-I.S.B.L.-LINES, PIPING-REF- SEGREGATE RR40
10006056
M&E-I.S.B.L.-LINES, PIPING-REF- PARALLEL CRUDE
10007214
M&E - ANALYTICAL EQPT - REFINING LABORATORY EQPT - LPG Upgrade
10007220
M&E - REFINING COMPRESSOR UNIT - ELECTRICAL:LPG facility upgrade
10007307
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - TRACK #6
10007337
M&E - I.S.B.L.-INSTRUMENTS-REF- CETANE IMPROVR gatepak
10007353
M&E - I.S.B.L. - INSTRUMENTS - REFINING upgrade LPG alarms
10007354
LPG/BUTANE TV SURVIELLANCE & REMOTE STOP VALVES
10007357
M&E - I.S.B.L. - INSTRUMENTS - REFINING LPG upgrade
10007358
M&E - ISBL INSTRUMENTS- REMOTE TRIP LPG/BUTANE
10007464
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L. LPG Upgrade
10007466
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L. LPG facility upgrade
10007470
M&E-I.S.B.L.-LINES, PIPING-REF- LPG FACIL UPGRD
10007474
M&E-I.S.B.L.-LINES, PIPING-REF- RR40 DCO HEADER
10007475
CONVERT FB-756 AST INTO WATER/GASO SEPARATOR
10007527
M&E - LINES, ELECTRICAL LINES: - LPG Upgrade
10007529
M&E - LINES, ELECTRICAL LINES: - LPG facility upgrade
10007531
M&E - LINES, ELECTRICAL LINES: - ALARMS LPG AREA
10007555
M&E - PUC CONST-AOC RFG,TRANS, SP, N LPG facility upgrade
10007587
M&E-TANK:ABOVE GRND STORAGE-REF- S/N 8421318702 FB-729 Mixers
10007606
M&E-TANK:ABOVE GRND STORAGE-REF- S/N 8421318702 FB-729 Mixers


Exhibit A – Page 10
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007613
M&E - FIRE/SAFETY EQPT - REFINING LPG TK.LOAD LIN
10007614
M&E - GARAGE, SERVICE TOOLS & EQUIPMENT
10007615
M&E-GARAGE,SERV TOOLS & EQPT-REF- WARNING LIGHTS
10007617
TRACK 4 - 1500LF
10007618
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF001LF1500
10007619
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF001LF1500
10007620
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF0086-107H
10007621
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF0086-107H
10007622
M&E - GARAGE, SERVICE TOOLS & EQUIPMENT
10007623
M&E-GARAGE,SERV TOOLS & EQPT-REF- RAILROAD SPUR
10007624
M&E-GARAGE,SERV TOOLS & EQPT-REF- C3 LOADING
10007625
M&E-GARAGE,SERV TOOLS & EQPT-REF- CAS'GHD.UNLOAD.
10007626
M&E-GARAGE,SERV TOOLS & EQPT-REF- FIELD C4 UNLOAD
10007627
M&E - GARAGE,SERVICE TOOLS & EQUIPMENT - REFINING
10007628
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF005 LPG RACKS
10007629
M&E-GARAGE,SERV TOOLS & EQPT-REF- EF005 LPG RACKS
10007630
M&E -GARAGE,SERV TOOLS & EQPT-REF- EF005 LPG RACKS
10007631
M&E -GARAGE,SERV TOOLS & EQPT-REF- FIELD C4 UNLOAD
10007632
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - GOODALL
10007633
M&E - GARAGE,SERVICE TOOLS & EQUIPMENT - REFINING
10007634
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - NU 5
10007635
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - EF006
10007636
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - EF006
10007637
M&E - GARAGE,SERVICE TOOLS & EQPT - REF - EF006
10007638
M&E -GARAGE,SERV TOOLS & EQPT-REF- MOVE SPOUTS 3T2
10007639
M&E - GARAGE,SERVICE TOOLS & EQUIPMENT - REFINING
10007640
M&E - GARAGE,SERVICE TOOLS & EQUIPMENT - REFINING
10007641
M&E- RR CASINGHEAD UNLOAD GASOLINE (PX-524)
10007642
M&E - I.S.B.L. - INSTRUMENTS - REFINING
10007643
M&E - I.S.B.L.-INSTRUMENTS-REF- MERCAPTAN
10007644
M&E - I.S.B.L.-INSTRUMENTS-REF- STORE METHANOL
10007645
M&E - I.S.B.L. - LINES, PIPING - REF - 3"4" 122'
10007646
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L.
10007647
M&E - I.S.B.L. - LINES, PIPING - REF - NU 2
10007648
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L.
10007649
M&E - I.S.B.L. - LINES, PIPING - REF - C3 LOADING
10007650
M&E-I.S.B.L.-LINES, PIPING-REF- CASEH'D.UNLOAD
10007651
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L.
10007652
M&E - I.S.B.L. - LINES, PIPING - REFINING I.S.B.L.
10007654
M&E - LINES, ELECTRICAL LINES: - LIGHT FIXTURES
10007655
M&E - LINES, ELECTRICAL LINES: - EF001
10007656
M&E - LINES, ELECTRICAL LINES: - EF001


Exhibit A – Page 11
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



Asset No.
Asset Description
10007657
M&E - LINES, ELECTRICAL LINES: - EF001
10007658
M&E - LINES, ELECTRICAL LINES: - FIELD C4 UNLOAD
10007659
M&E - LINES, ELECTRICAL LINES: - FLOODLIGHT
10007660
M&E - LINES, ELECTRICAL LINES: - EF001
10007661
M&E - LINES, ELECTRICAL LINES: - EF001
10007662
M&E - LINES, ELECTRICAL LINES: - EF001
10007663
M&E - LINES, ELECTRICAL LINES: -
10007664
M&E - LINES, ELECTRICAL LINES: -
10007665
M&E - LINES, ELECTRICAL LINES: - FIELD C4 UNLOAD
10007666
M&E - LOADING RACKS - REF FURNACE OIL TO RAIL RACK
10007667
M&E - PUMP UNIT - REFINING - CAS'GHD.RUNDOWN GA-784
10010050
LPG RR LIGHTING UPGRD & SHELTER
10011481
M&E - I.S.B.L. - LINES, PIPING
10016485
LAND IMPROVEMENTS FOR CLASS YARD EXPANSION
10016486
NEW RAILROAD FOR CLASS YARD EXPANSION
10016487
SIX NAPHTHA LOADING ARMS
10016488
NAPHTHA LOADING - PIPES/VALVES/FITTINGS


For clarification purposes only (and for ease of future reference), the storage tanks listed below are intended to be included as part of the Mandan Tankage; however, such tanks may not be set forth in the list above due to certain internal accounting and general ledger issues.

LOCATION
TANK NUMBER
RESERVED CAPACITY (in Barrels)
Mandan
FB-701
96,000
Mandan
FB-702
96,000
Mandan
FB-703
96,000
Mandan
FB-705
96,000
Mandan
FB-706
96,000
Mandan
FB-707
32,900
Mandan
FB-708
30,000
Mandan
FB-709
30,000
Mandan
FB-710
30,000
Mandan
FB-711
30,000
Mandan
FB-712
30,000
Mandan
FB-714
30,000
Mandan
FB-715
20,000
Mandan
FB-716
15,000
Mandan
FB-717
43,000
Mandan
FB-718
30,000
Mandan
FB-719
30,000


Exhibit A – Page 12
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



LOCATION
TANK NUMBER
RESERVED CAPACITY (in Barrels)
Mandan
FB-720
30,000 (OOS)
Mandan
FB-721
10,000
Mandan
FB-722
10,000
Mandan
FB-723
96,000
Mandan
FB-724
96,000 (OOS)
Mandan
FB-725
96,000
Mandan
FB-726
96,000
Mandan
FB-727
96,000
Mandan
FB-728
96,000
Mandan
FB-729
96,000
Mandan
FB-730
96,000
Mandan
FB-731
96,000
Mandan
FB-732
30,000
Mandan
FB-733
96,000
Mandan
FB-734
96,000
Mandan
FB-737
20,000 (OOS)
Mandan
FB-738
43,000
Mandan
FB-740
20,000
Mandan
FB-741
15,000
Mandan
FB-742
30,000 (OOS)
Mandan
FB-743
20,000
Mandan
FB-744
24,000
Mandan
FB-745
20,000
Mandan
FB-746
700
Mandan
FB-747
96,000
Mandan
FB-748
96,000
Mandan
FB-749
300 (OOS)
Mandan
FB-750
96,000
Mandan
FB-751
96,000
Mandan
FB-752
96,000
Mandan
FB-753
96,000
Mandan
FB-754
96,000
Mandan
FB-755
96,000
Mandan
FB-756
24,000
Mandan
FB-758
5,000
Mandan
FB-764
96,000
Mandan
FB-766
22,000
Mandan
FB-767
8,000
Mandan
FB-768
1,000 (OOS)
Mandan
FB-771
96,000
Mandan
FB-773
12
Mandan
FB-774
21



Exhibit A – Page 13
Mandan Tankage, Mandan Rail Rack and Trackage, Mandan LPG Truck Rack



EXHIBIT B

Salt Lake Tankage
Salt Lake Rail Rack and Trackage
Salt Lake Refinery Truck Racks

Asset No.
Asset Description
10012941
PIPING - LCO TO TRUCK RACK LOADING SYSTEM
10004434
M&E -I.S.B.L.-INSTRUMENTS-REF -LOADING RACK
10002558
PIPING, CONTAINMENT PAD, ETC. FOR VACUUM TRUCKS
10004359
M&E-I.S.B.L.-LINES, PIPING-REF-HVY FUEL OIL RK
10005754
DCO TRUCK LOAD OUT
10002553
DCO TRUCK LOAD OUT
10011460
SUCTION AND DISCHARGE PIPING- BLACK WAX TRUCK RACK
10011457
CONCRETE PAD & DRAIN - BLACK WAX TRUCK RACK
10011470
CONCRETE PAD & DRAIN - BLACK WAX TRUCK RACK
10005758
HPD BLACK WAX UNLOADING
10011458
CONRETE PUMP PAD - BLACK WAX TRUCK RACK
10004358
M&E-I.S.B.L.-LINES, PIPING-REF-CRUDE OIL RACK
10004272
M&E-I.S.B.L.-LINES, PIPING-REF-CRUDE UNLOADING
10011459
PUMP - BLACK WAX TRUCK RACK
10011471
PUMP - BLACK WAX TRUCK RACK
10011473
PUMP - BLACK WAX TRUCK RACK
10011472
PUMP - BLACK WAX TRUCK RACK
10004491
M&E-GARAGE, SERV TOOLS & EQPT-REF-CRUDE OIL RACK
10011786
PUMP - BLACK WAX TRUCK RACK
10014884
BLR VAPOR RECOVERY SYSTEM COMPRESSION
10019965
BUTANE LOADING RACK STRUCTURAL REINFORCEMENT
10014885
BLR VAPOR RECOVERY SYSTEM AUTOMATION
10013156
BUTANE LOADING RACK PIPING
10004441
M&E -I.S.B.L.-INSTRUMENTS-REF-BLR TRC GROUDNG
10004363
M&E-I.S.B.L.-LINES, PIPING-REF-BUTANE LOADING
10004122
M&E-PROCESS UNIT COST CONST-AOC -BUTANE LOAD SPT
10013452
LAND (UNION PACIFIC RR TRACKS & PROPERTY)15 ACRES
10020131
LOADING ARMS/FALL PROTECTION SPOT 1/2 - MODIFY LOA
10013453
RAILROAD TRACKS
10011207
PIPING/CONTROL VALVES - ALKYLATE RAIL LOADING RACK
10011208
VAPOR RECOVERY SYS W/ WALKWAY- ALKY RAIL LOAD RACK
10004129
M&E- REF OMD:OFFLOAD KEROSENE FROM RAIL
10004139
M&E -LOADING RACKS -REF
10011258
PIPING/CONTROL VALVES - ALKYLATE RAIL LOADING RACK
10004138
M&E -LOADING RACKS -REF


Exhibit B – Page 1
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10004493
M&E-GARAGE, SERV TOOLS & EQPT-REF-TANK CAR LOAD
10014303
BAKKEN CRUDE UNLOADING ARM
10011259
VAPOR RECOVERY SYS W/ WALKWAY- ALKY RAIL LOAD RACK
10004165
M&E -I.S.B.L.-INSTR -REF BLR U/G RAIL SPOT CAMERA
10003954
RAILROAD EQUIPMENT TANK CAR -
10011209
CONCRETE BASE @ VAPOR RECOVERY-ALKY RAIL LOAD RACK
10004365
M&E -I.S.B.L. -LINES, PIPING -REF -UN TRACK
10003955
RAILROAD EQUIPMENT TANK CAR -FREIGHT
10020134
TANK 188
10020127
F-848 PP STORAGE BULLET
10020128
F-849 PP STORAGE BULLET
10020135
PIPING FROM TLR TO TANKAGE
10048457
TANK 245
99000879
TANK 326 TURNAROUND IN 2014
10020136
STRUCTURAL STEEL FOR PIPING AND RELATED TO TANK
10017221
2013 PHASE 1 WAXEY TANK 186
10020129
J-988A PP LOADING PUMPS
10020130
J-988B PP LOADING PUMPS
10003994
M&E -TANK: ABV GRND STRAGE -REF -WATER DRAW SYS
10020318
J-878A SOFT START FOR PUMP
99000409
TANK 328 RESTORATIONS - 2012
10003997
M&E -TANK: ABV GRND STRAGE -REF TANK -LSDHF
99000410
TANK 325 RESTORATIONS - 2012
10014608
BLACK WAX PUMP
10004106
M&E -PUMP UNIT -REF POWER UNIT -WATER DRAW SYS
10004389
M&E -I.S.B.L.-INSTRUMENTS-REF -IN-LINE BLENDER
99001120
TANK 204
10011012
9TH ROAD CROSSING UPGRADE
99000368
TANK 323 RESTORATION - 2011
10004175
M&E -I.S.B.L. -LINES, PIPING -REF -PIPELINE
10014744
UPGRADE SPILL CONTAINMENT 2011
10011819
TK-204 ROOF AND PROTECTIVE COATING TO BOTTOM
10011903
ROOF - TANK 322
10003968
M&E-TANK:ABV GRND STRAGE-REF SLC-OMD TK243 BOTTOM
10013154
TANK 326 (2) PUMPS
10003962
M&E-TANK-REF CAP-SLC-OMD TF2, TK242 FLR REPL
10011934
TK-246 & TK-247 PIPING - ROUTED FOR ULSD #1
10004003
M&E -TANK: ABV GRND STRAGE -REF -TF2 BOTOM REPL
10011967
TK-204 PIPING - ROUTED TO HSD BLENDER (ULSD CONV)
10004030
M&E -TANK: ABOVE GROUND STORAGE
10004137
M&E -PIPING FAC TO GET ISOBUTANE TO BLENDING
10004332
M&E-I.S.B.L.-LINES, PIPING-REF-WATER DRAW SYS


Exhibit B – Page 2
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10004004
M&E -TANK: ABV GRND STRAGE -REF -TF2 BOTTOM REPL
99000357
TANK 243 RESTORATION - 2010
10004328
M&E-I.S.B.L.-LINES, PIPING-REF-OFF-TEST LINE
10004311
M&E-I.S.B.L.-LINES, PIPING-REF-IN-LINE BLENDER
10002568
UNITED MS-B 4" DISTILLATE PIPELINE PUMP
10004284
M&E-I.S.B.L.-LINES, PIPING-REF-TF3 ALKYLATE LP
10003966
M&E-TANK-SLC-TANK 245 SECONDRY CONTAINMNT BOTTOM
10002991
9TH ROAD CROSSING UPGRADE - PIPING
10004123
M&E -PROCESS UNIT COST CONST- NEW BLACK WAX PUMP
10013059
UPGR TANK CONTAINMENT SYS - ADJACENT TANKS 206/268
10003964
M&E-TANK:ABV GRND STRAGE-CAP-SLC-OMD TK209 BOTTOM
10003969
M&E -TANK: ABV GRND STRAGE -REF ABV GRND STRAGE -
10003999
M&E -TANK: ABV GRND STRAGE -REF TANK -LSDHF
10011715
ULTRAFORMATE 6"RUNDOWN LINE-OMD CONTRL RM TO TK298
10004300
M&E-I.S.B.L.-LINES, PIPING-REF-UPGRADE@TANK206
10004196
M&E -I.S.B.L. -LINES, PIPING -REF I.S.B.L.: -
10004024
M&E -TANK: ABOVE GROUND STORAGE
10012940
PIPING FROM TANK 211 TO PIPELINE
10004126
M&E -PROC UNIT COST CONST- TF2, TK 141 BOTTOM REPL
10004025
M&E -TANK: ABOVE GROUND STORAGE
10014260
TANK GAUGING UPGRADES 2008
10013145
REMOTE TELEMETRY UNIT 3 - LEVEL TRANSMITTER
10004169
M&E - REF CAP-SLC-OMD TURBO RUNDOWN EXPANSION
10004026
M&E -TANK: ABV GRND STRAGE -REF TANK -INTERNAL
10004010
M&E -TANK: ABV GRND STRAGE -REF TANK -STEEL BOTTOM
10004290
M&E-I.S.B.L.-LINES, PIPING-REF-TANK FARM NO 2
10003961
M&E-TANK-REF TF3 TK307 BOTTOM REPL & INTERNL COAT.
10004013
M&E -TANK: ABV GRND STRAGE -REF -NEW BOTTOM&ROOF
10022472
TANK 190
10003956
M&E -PIPING 1997 OMD MCI
10004000
M&E -TANK: ABV GRND STRAGE -REF -142 BOT REPLACE
10002570
SECONDARY FLOOR - TANK # 252
10010218
REPLACE PRIMARY AND SECONDARY SEAL IN TANK 326
10003970
M&E -TANK: ABV GRND STRAGE -REF
10004128
M&E- REF TK 141 CONVERSN TO RR 40/LCCO
10004088
M&E -PUMP UNIT -REF POWER UNIT -P-857 TK FARM#3
10004390
M&E -I.S.B.L.-INSTRUMENTS-REF -IN-LINE-BLENDER
10004335
M&E -I.S.B.L. -LINES, PIPING -REF -TANK 206
10004028
M&E -TANK: ABV GRND STRAGE -REF -PH 79 CKM0865
10003981
M&E -TANK: ABV GRND STRAGE -REF TANK -FOAM DAM
10011469
ROAD CROSSING - TANK FARM # 2
10004351
M&E -I.S.B.L. -LINES, PIPING -REF -TF2


Exhibit B – Page 3
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10003982
M&E -TANK: ABV GRND STRAGE -REF TANK -NEW BOTTOM
10003993
M&E -TANK: ABV GRND STRAGE -REF -PRIM/SEC SEALS
10004310
M&E-I.S.B.L.-LINES, PIPING-REF-INLINE BLENDER
10004021
M&E -TANK: ABOVE GROUND STORAGE
10002571
SECONDARY FLOOR - TANK # 308
10003973
M&E -TANK: ABV GRND STRAGE -REF -SECONDARY SEAL
10003971
M&E -TANK: ABV GRND STRAGE -REF
10003988
M&E -TANK: ABV GRND STRAGE -REF -PRIMARY/SC SEAL
10004017
M&E -TANK: ABV GRND STRAGE -REF TANK -PIPING
10004049
M&E -TANK: ABV GRND STRAGE -REF TANK -STEAM HEAT
10004298
M&E-I.S.B.L.-LINES, PIPING-REF-TF2 12" 1000'
10005760
OMD 813 A/B/C LOW FLOW SWITCH
10004046
M&E -TANK: ABV GRND STRAGE -REF -HTG LEVEL SYS
10004012
M&E -TANK: ABV GRND STRAGE -REF TANK -NEW BOTTOM
10003998
M&E -TANK: ABV GRND STRAGE -REF -HTG LEVEL SYS
10004029
M&E -TANK: ABV GRND STRAGE -REF -FIBERGLASS BTM
10003967
M&E-TANK-CAP-SLC-OMD PLATFRMS AT TK188 & TK246
10004355
M&E -I.S.B.L. -LINES, PIPING -REF -TF #2&3
10003972
M&E -TANK: ABV GRND STRAGE -REF TANK -EXTERNAL
10004164
M&E -I.S.B.L.-INSTR -REF GASOLINE COMPOSITOR
10004007
M&E -TANK: ABOVE GROUND STORAGE
10004329
M&E-I.S.B.L.-LINES, PIPING-REF-MTBE CTL VALVE
10004034
M&E -TANK: ABV GRND STRAGE -REF -FIBERGLASS BTM
10004297
M&E-I.S.B.L.-LINES, PIPING-REF-TF2 12" X 650'
10004127
M&E -TF2, TK 297 PRIMARY SEAL REPL & INTRNL COATNG
10004155
M&E -LINES, ELECTRICAL LINES: -TF3 PUMP STA
10004047
M&E -TANK: ABV GRND STRAGE -REF -SN-90A2968501
10004327
M&E -I.S.B.L. -LINES, PIPING -REF -TF2 TF3
10004044
M&E -TANK: ABOVE GROUND STORAGE
10003965
M&E-TANK-REF CAP-SLC-OMD-TK328 SEAL REPL
10005764
OMD-U/G T-329 RV & PIPING
10004089
M&E -PUMP UNIT -REF POWER UNIT -P-860ATK FARM#3
10003995
M&E -TANK: ABV GRND STRAGE -REF -RING REPLACEMNT
10004353
M&E-I.S.B.L.-LINES, PIPING-REF-TF2 INSULATED
10004356
M&E-I.S.B.L.-LINES, PIPING-REF-TF#3 RELOCATE
10004294
M&E-I.S.B.L.-LINES, PIPING-REF-TANK FARM NO 3
10004016
M&E -TANK: ABV GRND STRAGE -REF -ALTAMONT CRUDE
10004027
M&E -TANK: ABV GRND STRAGE -REF TANK -INTERNAL
10004051
M&E -TANK: ABV GRND STRAGE -REF -UNLOADING PIPE
10003974
M&E -TANK: ABV GRND STRAGE -REF -SECONDARY SEAL
10003978
M&E -TANK: ABV GRND STRAGE -REF -HEIGHT EXTENSIN
10004463
M&E-GARAGE, SERV TOOLS & EQPT-REF-OVERFLOW BASIN


Exhibit B – Page 4
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10014057
OMD LIFT STATION LEVEL TRANSMITTERS
10004061
M&E -PUMP UNIT -REF POWER UNIT -TK FARM #3
10003336
M&E-TANK:ABOVE GROUND STRAGE-REF FOUNDATIONS
10003076
UPGRADE J818 PUMP AT TANK 190
10003990
M&E -TANK: ABOVE GROUND STORAGE
10004371
M&E -I.S.B.L.-INSTRUMENTS-REF -TF3 LIGHTNG U/G
10004081
M&E -PUMP UNIT -REF POWER UNIT -6" PRODUCTS PL
10004070
M&E -PUMP UNIT -REF POWER UNIT -P-751 8" PROD PL
10004084
M&E -PUMP UNIT -REF POWER UNIT -P-751 8" PROD PL
10003987
M&E -TANK: ABV GRND STRAGE -REF TANK -90A2965501
10004009
M&E -TANK: ABV GRND STRAGE -REF -JENSEN 605-1.5
10004035
M&E -TANK: ABV GRND STRAGE -REF -MODEL 308RSES30
10004430
M&E -I.S.B.L.-INSTRUMENTS-REF -OMD-TAS TERMNAL
10004350
M&E -I.S.B.L. -LINES, PIPING -REF -TANK 246
10003976
M&E -TANK: ABV GRND STRAGE -REF -SEAL EXTENSION
10003991
M&E -TANK: ABV GRND STRAGE -REF TANK -TANK LEVEL
10003983
M&E -TANK: ABV GRND STRAGE -REF -PRIMARY SEALS
10004020
M&E -TANK: ABV GRND STRAGE -REF TANK -CONE ROOF
10011641
HONEYWELL BLENDING SYSTEM - COMPUTER HARDWARE
10003339
M&E -TANK: ABOVE GROUND STORAGE
10004393
M&E-I.S.B.L.-INSTRUMENTS-REF-BUTANE BLENDING
10004006
M&E -TANK: ABV GRND STRAGE -REF -JENSEN 620-VA20
10004240
M&E-I.S.B.L.-LINES, PIPING-REF-6" & 8" PROD U/G
10004286
M&E -I.S.B.L. -LINES, PIPING -REF -TF #2
10004014
M&E -TANK: ABV GRND STRAGE -REF TANK -TK 252 DIKE
10004065
M&E -PUMP UNIT -REF POWER UNIT -TF BLENDER-1
10004018
M&E -TANK: ABV GRND STRAGE -REF TANK -TANK 243
10003996
M&E -TANK: ABOVE GROUND STORAGE
10004033
M&E -TANK: ABV GRND STRAGE -REF TANK -VALVES
10004321
M&E -I.S.B.L. -LINES, PIPING -REF -TANK 141
10003975
M&E -TANK: ABV GRND STRAGE -REF TANK -FOAM DAM
10003985
M&E -TANK: ABV GRND STRAGE -REF -JENSEN F-605-5
10003989
M&E -TANK: ABV GRND STRAGE -REF -SECONDARY SEAL
10004050
M&E -TANK: ABV GRND STRAGE -REF -STEAM HEAT TRAC
10003337
M&E -TANK: ABOVE GROUND STORAGE
10003979
M&E -TANK: ABV GRND STRAGE -REF TANK -DEA STORAGE
10004160
M&E -LINES, ELECTRICAL LINES: -TF2 TANKS
10004336
M&E-I.S.B.L.-LINES, PIPING-REF-T #190 JUMPOVER
10004085
M&E -PUMP UNIT -REF POWER UNIT -TK FARM3#2
10004337
M&E -I.S.B.L. -LINES, PIPING -REF -TANK 325
10003980
M&E -TANK: ABV GRND STRAGE -REF -SECONDARY SEAL
10004002
M&E -TANK: ABV GRND STRAGE -REF TANK -TANK BOTTOM


Exhibit B – Page 5
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10003958
M&E -TOWER -REF TOWER -LSDHF BLNDR TWR
10004045
M&E -TANK: ABV GRND STRAGE -REF -INLET MANIFOLD
10004052
M&E -TANK: ABV GRND STRAGE -REF -BUTANE BLANKET
10004402
M&E -I.S.B.L.-INSTRUMENTS-REF -COMP. SAMPLER
10004115
M&E-PROCESS UNIT COST CONST-AOC -OCTANE BLENDER
10012334
TK-246 & TK-247 PIPING - ROUTED FOR ULSD #1
10004326
M&E-I.S.B.L.-LINES, PIPING-REF-T325 JP-4FILTER
10004415
M&E -I.S.B.L.-INSTRUMENTS-REF-AVGAS BLENDING
10003992
M&E -TANK: ABV GRND STRAGE -REF -PRIMARY/SE SEAL
10004001
M&E -TANK: ABV GRND STRAGE -REF TANK -TANK BOTTOM
10004068
M&E -PUMP UNIT -REF POWER UNIT -TF BLENDER-1
10004334
M&E-I.S.B.L.-LINES, PIPING-REF-T-325 JUMPOVER
10004120
M&E -PROCESS UNIT COST CONST-TANK 309
10004161
M&E -LINES, ELECTRICAL LINES: -TF3 TK 309 PUMP
10003338
M&E -TANK: ABOVE GROUND STORAGE
10004015
M&E -TANK: ABV GRND STRAGE -REF TANK -TANK 243
10004154
M&E -LINES, ELECTRICAL LINES: -TF4 FLOOD LIGHT
10004323
M&E -I.S.B.L. -LINES, PIPING -REF -TANK 309
10004341
M&E-I.S.B.L.-LINES, PIPING-REF-325TK CROSSOVER
10004022
M&E -TANK: ABV GRND STRAGE -REF TANK -ULR SERVICE
10004330
M&E-I.S.B.L.-LINES, PIPING-REF-T-325 JUMPOVER
10004345
M&E-I.S.B.L.-LINES, PIPING-REF-WATER SUC TF4
10003340
M&E -TANK: ABOVE GROUND STORAGE
10003984
M&E -TANK: ABOVE GROUND STORAGE
10004074
M&E -PUMP UNIT -REF PUMP POWER UNIT-TK-206
10003986
M&E -TANK: ABOVE GROUND STORAGE
10004011
M&E -TANK: ABV GRND STRAGE -REF TANK -INSTALLATION
10004039
M&E -TANK: ABV GRND STRAGE -REF TANK -LOWER LEGS
10004086
M&E -PUMP UNIT -REF POWER UNIT -TK FARM #2
99001185
TANK 212 TURNAROUND
10020133
NEW PIPING FOR OLEFINS
10004347
M&E-I.S.B.L.-LINES, PIPING-REF-156-188-268-322
10002560
SECONDARY BOTTOM & COATING - TANK # 158
10023600
TANK 244 ABOVE GROUND TANK
10020108
J-928G - YELLOW WAX CHARGE PUMPS
10020109
J-928H - YELLOW WAX CHARGE PUMPS
10020110
J-928E - BLACK WAX CHARGE PUMPS
10020111
J-928F - BLACK WAX CHARGE PUMPS
10020317
J-878A BOOSTER PUMP
10004121
M&E-PROCESS UNIT COST CONST-AOC -J809 PRESSUR SW
10004075
M&E -PUMP UNIT -REF POWER UNIT -J823B 3HP
10004107
M&E -PUMP UNIT -REF POWER UNIT -J892 PUMP


Exhibit B – Page 6
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



Asset No.
Asset Description
10005741
J-813 & J813A MOTOR STARTERS
10004346
M&E -I.S.B.L. -LINES, PIPING -REF -TF 2 & 3
10002807
PRIMARY & SECONDARY SEALS FOR TANK #298
10017856
SLC ETHANOL RATIO BLENDING PIPING & EQUIPMENT
10017855
SLC ETHANOL RATIO BLENDING SKIDS
10016669
ETHANOL RAIL UNLOADING RACK
10023825
PIPING FOR SAFETY SHOWER -ETHANOL UNLDG RACK
99000880
TANK 142 TURNAROUND IN 2014
10004487
M&E-GARAGE, SERV TOOLS & EQPT-REF-142 TK FIREWALL
10005749
RELOCATE TK 155 OOS PRESSURE VENT
10005681
M&E-PROCESS UNIT COST CONST-AOC -TF2 PIPING T245
99000762
TANK 291 YEAR 2013 TURNAROUND
99001737
TANK 328 ABOVE GROUND STORAGE TANK
99001540
TANK 330 TURNAROUND
99001540
TANK 330 TURNAROUND
10020317
J-878A BOOSTER PUMP
TBD
TANK 427D


For clarification purposes only (and for ease of future reference), the storage tanks listed below are intended to be included as part of the Salt LakeTankage; however, such tanks may not be set forth in the list above due to certain internal accounting and general ledger issues.


LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
Salt Lake City
141
14,896
Salt Lake City
142
14,323
Salt Lake City
155
10,313
Salt Lake City
157
19,915
Salt Lake City
158
19,915
Salt Lake City
186
58,748
Salt Lake City
188
58,748
Salt Lake City
190
48,348
Salt Lake City
204
55,094
Salt Lake City
206
62,091
Salt Lake City
209
(OOS)
Salt Lake City
212
56,627
Salt Lake City
213
56,627
Salt Lake City
236
56,627


Exhibit B – Page 7
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
Salt Lake City
242
55,688
Salt Lake City
243
55,209
Salt Lake City
244
15,484
Salt Lake City
245
24,071
Salt Lake City
246
11,190
Salt Lake City
247
11,190
Salt Lake City
248
60,000
Salt Lake City
252
55,688
Salt Lake City
291
15,107
Salt Lake City
294
(OOS)
Salt Lake City
297
3,275
Salt Lake City
298
3,575
Salt Lake City
305
5,117
Salt Lake City
306
5,117
Salt Lake City
307
6,714
Salt Lake City
308
6,714
Salt Lake City
309
(OOS)
Salt Lake City
310
(OOS)
Salt Lake City
312
(OOS)
Salt Lake City
314
(OOS)
Salt Lake City
315
(OOS)
Salt Lake City
321
24,171
Salt Lake City
322
37,871
Salt Lake City
323
37,871
Salt Lake City
324
54,974
Salt Lake City
325
54,974
Salt Lake City
326
54,974
Salt Lake City
327
54,974
Salt Lake City
328
54,974
Salt Lake City
329
10,313
Salt Lake City
330
24,071
Salt Lake City
331
33,105
Salt Lake City
848
2,800
Salt Lake City
849
2,800
Salt Lake City
427A
606
Salt Lake City
427B
606
Salt Lake City
427C
905
Salt Lake City
427D
905



Exhibit B – Page 8
Salt Lake Tankage, Salt Lake Rail Rack and Trackage, Salt Lake Refinery Truck Racks



EXHIBIT C

LARW Tankage and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack

Asset No.
Asset Description
10013233
Offsites - Buildings - 241 RP&S Control Room
10013238
Offsites - Buildings - Blender In-Line
10013251
Offsites - Blending
10013258
Offsites - Onsite Piping
10013271
Offsites - Pumps
10013281
Offsites - Tankage - TK-000476
10013303
Offsites - Tankage - TK-007501
10013304
Offsites - Tankage - TK-011000
10013305
OFFSITES - TANKAGE - TK-011001 LCO
10013306
Offsites - Tankage - TK-011002
10013307
OFFSITES - TANKAGE - TK-011003 DIESEL
10013308
Offsites - Tankage - TK-011004
10013309
Tank - TK-013500 FIRE WATER
10013310
TANK 013501 FIRE WATER
10013311
Offsites - Tankage - TK-013502
10013312
Offsites - Tankage - TK-013503
10013313
Offsites - Tankage - TK-013504
10013314
Offsites - Tankage - TK-013505
10013315
OFFSITES - TANKAGE - TK-013506 JET FUEL
10013316
Offsites - Tankage - TK-013507
10013317
OFFSITES - TANKAGE - TK-013508 AVGAS
10013318
Offsites - Tankage - TK-013509
10013319
Offsites - Tankage - TK-013510
10013320
TANK 013511 BRINE WATER TANK
10013321
Offsites - Tankage - TK-013512
10013330
Offsites - Tankage - TK-036001
10013331
OFFSITES - TANKAGE - TK-036002 JET A
10013332
Offsites - Tankage - TK-076000
10013333
Offsites - Tankage - TK-080034
10013334
Offsites - Tankage - TK-080038
10013335
Offsites - Tankage - TK-080039
10013336
Offsites - Tankage - TK-080042
10013338
OFFSITES - TANKAGE - TK-080044 GASOLINE
10013339
Offsites - Tankage - TK-080049
10013340
Offsites - Tankage - TK-080050

Exhibit C – Page 1
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10013341
Offsites - Tankage - TK-080051 AZ-BOB
10013342
Offsites - Tankage - TK-080055
10013343
OFFSITES - TANKAGE - TK-080062 NAPTHA
10013344
OFFSITES - TANKAGE - TK-080063 HS CAT FEED
10013345
Offsites - Tankage - TK-080064
10013346
Tank 080065
10013347
Offsites - Tankage - TK-080065 Resid
10013348
Offsites - Tankage - TK-080066
10013349
Offsites - Tankage - TK-080067
10013350
Offsites - Tankage - TK-080069
10013351
Offsites - Tankage - TK-080070 AVJET A
10013352
Offsites - Tankage - TK-080077
10013353
Offsites - Tankage - TK-080078
10013354
OFFSITES - TANKAGE - TK-080080 CRUDE
10013355
Offsites - Tankage - TK-080081
10013356
Offsites - Tankage - TK-080083
10013357
Offsites - Tankage - TK-080084 SLOP
10013358
Offsites - Tankage - TK-080085
10013359
Offsites - Tankage - TK-080087
10013360
Offsites - Tankage - TK-080089
10013361
Offsites - Tankage - TK-080090
10013362
Offsites - Tankage - TK-080091
10013363
Offsites - Tankage - TK-080209
10013364
OFFSITES - TANKAGE - TK-080210 GASOLINE
10013365
Offsites - Tankage - TK-080211
10013366
Offsites - Tankage - TK-080212
10013367
OFFSITES - TANKAGE - TK-080213 NAPTHA
10013368
Offsites - Tankage - TK-080214 Naptha
10013369
Offsites - Tankage - TK-080215
10013370
Offsites - Tankage - TK-080217 - FCCU Hvy Naptha
10013371
Offsites - Tankage - TK-080219
10013372
OFFSITES - TANKAGE - TK-080220 CARBOB
10013373
OFFSITES - TANKAGE - TK-080221 REFORMER CHARGE
10013374
Offsites - Tankage - TK-096000
10013375
Offsites - Tankage - TK-096059
10013376
Offsites - Tankage - TK-118066
10013377
Offsites - Tankage - TK-125002
10013378
Offsites - Tankage - TK-125003
10013379
OFFSITES - TANKAGE - TK-125004 HTU NAPTHA
10013384
OFFSITES - TANKAGE - TK-020426 SOUR WATER
10013387
Offsites - Vapor Recovery Unit
10013432
RP&S: MOV FOR P-1692

Exhibit C – Page 2
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10013448
GEN PLT, Gasoline Blendin
10013456
P/L PIG LAUNCHER & RECEIVER - AT REFINERY
10013472
TANK 7501 DOUBLE BOTTOM
10013473
TANK 13505 DOUBLE BOTTOM
10013474
TANK 80034 DOUBLE BOTTOM
10013475
TK 80217 - DOUBLE TANK BOTTOM NAPHTHA
10013477
TANK 80216 - ALUMINUM DOME
10013478
TANK 96000 - ALUMINUM DOME
10013543
TANK 80216 - ALUMINUM DOME REFORMATE
10013544
TANK 7501 DOUBLE BOTTOM
10013545
TANK 13505 DOUBLE BOTTOM CRU 2/3 LT. NAPHTNA
10013563
TANK 80034 DOUBLE BOTTOM
10013564
TK 80217 - DOUBLE TANK BOTTOM
10013567
TANK 96000 - ALUMINUM DOME GASOLINE
10013608
RPS Analyzers and Instrumentation
10013646
80084 SAAB TANK RADAR PRO GAUGE
10013647
80062 SAAB TANK RADAR PRO GAUGE
10013648
80085 SAAB TANK RADAR PRO GAUGE
10013649
80070 SAAB TANK RADAR PRO GAUGE
10013650
36002 SAAB TANK RADAR PRO GAUGE
10013651
80068 SAAB TANK RADAR PRO GAUGE
10013652
80058 REX LEVEL GAUGES
10013653
80080 SAAB TANK RADAR PRO GAUGE
10013654
80219 SAAB TANK RADAR PRO GAUGE
10013655
80081 SAAB TANK RADAR PRO GAUGE
10013656
80089 SAAB TANK RADAR PRO GAUGE
10013657
80063 SAAB TANK RADAR PRO GAUGE
10013658
80061 SAAB TANK RADAR PRO GAUGE
10013659
80067 SAAB TANK RADAR PRO GAUGE
10013660
7201 SAAB TANK RADAR PRO GAUGE
10013661
80083 SAAB TANK RADAR PRO GAUGE
10013662
80065 REX LEVEL GAUGES
10013663
80064 REX LEVEL GAUGES
10013664
80082 REX LEVEL GAUGES
10013665
7501 SAAB TANK RADAR PRO GAUGE
10013666
80079 SAAB TANK RADAR PRO GAUGE
10013667
80066 REX LEVEL GAUGES
10013671
80087 SAAB TANK RADAR PRO GAUGE
10013674
80084 SAAB TANK RADAR PRO GAUGE
10013675
80062 SAAB TANK RADAR PRO GAUGE
10013676
80085 SAAB TANK RADAR PRO GAUGE
10013677
80070 SAAB TANK RADAR PRO GAUGE

Exhibit C – Page 3
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10013678
36002 SAAB TANK RADAR PRO GAUGE
10013679
80068 SAAB TANK RADAR PRO GAUGE
10013680
80058 REX LEVEL GAUGES
10013681
80080 SAAB TANK RADAR PRO GAUGE
10013682
80219 SAAB TANK RADAR PRO GAUGE
10013683
80081 SAAB TANK RADAR PRO GAUGE
10013684
80089 SAAB TANK RADAR PRO GAUGE
10013685
80063 SAAB TANK RADAR PRO GAUGE
10013686
80061 SAAB TANK RADAR PRO GAUGE
10013687
80067 SAAB TANK RADAR PRO GAUGE
10013688
7201 SAAB TANK RADAR PRO GAUGE
10013689
80083 SAAB TANK RADAR PRO GAUGE
10013690
80065 REX LEVEL GAUGES
10013691
80064 REX LEVEL GAUGES
10013692
80082 REX LEVEL GAUGES
10013693
7501 SAAB TANK RADAR PRO GAUGE
10013694
80066 REX LEVEL GAUGES
10013695
80087 SAAB TANK RADAR PRO GAUGE
10013817
TANK 80090 DOUBLE BOTTOM
10013818
TANK 80066 DOUBLE BOTTOM
10013819
TANK 80049 DOUBLE BOTTOM
10013820
TANK 96000 DOUBLE BOTTOM
10013880
P-1691 CENTRIFUGAL PUMP - HORIZONTAL
10013927
TRANSMIX 600' PIPING & 3" VALVE
10013928
TRANSMIX TRANSMITTER (72-FT924)
10014112
72PV-0532 MINIMUM FLOW BYPASS
10014113
72FV-1302 FLOW CONTROL VALVE
10014114
72FT-1302 WEDGE METER/ TRANSMITTER
10014115
72FV-1303 FLOW CONTROL VALVE
10014116
72FT-1303 WEDGE METER/ TRANSMITTER
10014117
72PV-1304 MINIMUM FLOW BYPASS
10014118
72FV-1301 HVY CRUDE CONTROL VALVE (RP&S)
10014119
72FT-1301 WEDGE METER/TRANSMITTER
10014120
72FV-1306 FLOW CONTROL VALVE
10014121
72FT-1306 WEDGE METER/TRANSMITTER
10014132
Offsites - Tankage - TK-080216 CRU HN
10014314
TRANSMIX 600' PIPING & 3" VALVE
10014340
TK-80090 -RP&S FLOATING ROOF STORAGE TANK FUEL OIL
10014341
TK-76000 - RP&S DOUBLE BOTTOM INSTALLATION
10014348
TK-80083 - RP&S FIXED ROOF STORAGE TANK - SLOP OIL
10014349
RPS-2 ILB FTIR ANALYZER 72AIT613
10014350
RPS-2 ILB FTIR ANALYZER 72AIT614

Exhibit C – Page 4
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10014351
RPS-2 ILB FTIR ANALYZERS PLC 72LCP612
10014425
TK-80211 GASOLINE DOUBLE BOTTOM
10014427
TANK - 80069 SLOP
10014777
FIRE FOAM PIPING FOR TANK 80212
10014778
FIRE FOAM PIPING FOR TANK 80216
10014779
FIRE FOAM PIPING FOR TANK 96000
10014780
TK-80068
10014783
TK-80071 CRUDE
10015027
TANK 80075
10015028
MIXERS (ME-931 AND ME-932) FOR TANK 80075
10015029
SAMPLE PUMP P-3619 FOR TANK 80075
10015030
PIPING / ELECTRICAL - TANK 80075
10015031
INSTRUMENTATION AND AUTOMATION - TANK 80075
10015032
TANK 80079 CRUDE
10015033
TANK 80079 MIXERS ME-919 AND ME-920
10015034
SAMPLE PUMP P-3583 FOR TANK 80079
10015035
TANK 80079 PIPING / ELECTRICAL
10015036
TANK 80079 INSTRUMENTATION AND AUTOMATION
10015043
TANK 80076
10015044
TANK 80076 SAMPLE PUMP P-3583 & MOTOR M-4572
10015045
TANK 80076 MIXERS & MOTORS ME-921/922, M-4568/4569
10015046
TANK 80076 PIPING / ELECTRICAL
10015047
TANK 80076 AUTOMATIC GAUGING
10015255
TANK 80058
10015256
TANK 80058 ELECTRICAL
10015257
TK 80058 SAMPLE PUMP P-3617 MOTOR M-4598/4596/4597
10015258
TK 80058 PIPING
10015259
TANK 80058 GAUGE INSTRUMENTATION AND AUTOMATION
10015260
TANK 80214 ELECTRICAL
10015261
TANK 80214 DOUBLE BOTTOM
10015262
TANK 80214 PUMP P-3616 AND MOTOR M-4596
10015263
TANK 80214 PIPING
10015264
TANK 80214 GAUGING INSTRUMENTATION AND AUTOMATION
10015804
TANK 80216 DOUBLE BOTTOM
10015805
TANK 80216 INSTRUMENTATION AND GAUGING
10015806
TANK 80216 ELECTRICAL
10015807
TANK 80216 SAMPLE PUMP P-3622 M-4609
10015808
TANK 80216 PIPING
10015959
TANK 80045 WITH FLOATING ROOF
10015960
TANK 80045 INSTRUMENTATION AND ELECTRICAL
10015961
TANK 80045 MIXER ME-0935, MOTOR M-4606,
10015962
TANK 80045 SAMPLE PUMP P-3621 AND MOTOR M-4608

Exhibit C – Page 5
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10015963
TANK 80045 PIPING
10015964
TANK 80045 AUTOMATIC GAUGING
10015978
TANK 80033 DIESEL
10015979
TANK 80033 INSTRUMENTATION AND GAUGING
10015980
TANK 80033 ELECTRICAL
10015981
TANK 80033 PIPING
10015982
TANK 80033 SAMPLE PUMP
10015983
TANK 80033 MIXER AND MOTOR
10016540
TANK 80072
10016541
TANK 80072 SAMPLE PUMP MOTOR P-3620 M-4605
10016542
TANK 80072 MIXER ME-933 & MOTOR M-4603
10016543
TANK 80072 MIXER ME-934 & MOTOR M-4604
10016544
TANK 80072 ELECTRICAL
10016545
TANK 80072 INSTRUMENTATION AND AUTOMATION
10016546
TANK 80072 PIPING
10016548
TANK 80061
10016549
TANK 80061 SAMPLE PUMP MOTOR P-3637 & MOTOR M-4626
10016550
TANK 80061 MIXER ME-940 & MOTOR M-4623
10016551
TANK 80061 ELECTRICAL
10016552
TANK 80061 INSTRUMENTATION AND AUTOMATION
10016553
TANK 80061 PIPING
10016577
TANK 80037
10016578
TANK 80037 SAMPLE PUMP P-3657 MOTOR M-4646
10016579
MIXER ME-948 & MOTOR M-4647
10016580
TANK 80037 ELECTRICAL
10016581
TANK 80037 INSTRUMENTATION AND AUTOMATION
10016582
TANK 80037 PIPING
10016583
TANK 80212 DOUBLE BOTTOM REPLACEMENT
10016584
TANK 80212 ELECTRICAL
10016585
TANK 80212 INSTRUMENTATION AND AUTOMATION
10016586
TANK 80212 PIPING
10016632
RAILROAD TRACKS RR-1175
10016705
TANK 80082
10016706
Tank 80082 SAMPLE PUMP P-3639 & MOTOR M-4628
10016707
Tank 80082 Piping
10016708
Tank 80082 MIXER ME-942 & MOTOR M-4625
10016709
Tank 80082 MIXER ME-943 & MOTOR M-4630
10016710
Tank 80082 ELECTRICAL
10016711
Tank 80082 INSTRUMENTATION AND AUTOMATION
10016721
TANK 80042 RADAR GAUGES
10016723
TANK 80044 RADAR GAUGES
10016724
TANK 80045 RADAR GAUGES

Exhibit C – Page 6
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10016725
TANK 80049 RADAR GAUGES
10016726
TANK 80050 RADAR GAUGES
10016727
TANK 80051 RADAR GAUGES
10016728
TANK 80055 RADAR GAUGES
10016729
TANK 80057 RADAR GAUGES
10016730
TANK 80209 RADAR GAUGES
10016731
TANK 80210 RADAR GAUGES
10016732
TANK 80211 RADAR GAUGES
10016733
TANK 80212 RADAR GAUGES
10016734
TANK 80213 RADAR GAUGES
10016735
TANK 80214 RADAR GAUGES
10016736
TANK 80215 RADAR GAUGES
10016737
TANK 80216 RADAR GAUGES
10016738
TANK 80217 RADAR GAUGES
10016739
TANK 80220 RADAR GAUGES
10016740
TANK 80221 RADAR GAUGES
10016741
TANK 96000 RADAR GAUGES
10016742
TANK 96059 RADAR GAUGES
10016743
TANK 125002 RADAR GAUGES
10016744
TANK 125003 RADAR GAUGES
10016745
TANK 125004 RADAR GAUGES
10016922
TANK 80057
10016923
TK 80057 SAMPLE PUMP P-3638 & M-4627
10016924
TK 80057 MIXER ME-941 & MOTOR M-4624
10016925
TANK 80057 ELECTRICAL
10016926
TANK 80057 INSTRUMENTATION AND AUTOMATION
10016927
TANK 80057 PIPING
10017129
RP&S UGH PIPING
10017164
TANK 80033 FOAM PIPING
10017668
FOAM PIPING TK 80075
10017669
FOAM PIPING TK 80071
10017670
TK ROOF 13505
10017672
TK ROOF 80066
10017673
FOAM PIPING TK 80090
10017674
FOAM PIPING TK 80090 ADDTL COST
10017675
FOAM PIPING TK 13505
10017676
FOAM PIPING TK 80066
10017718
FOAM PIPING TK 80076
10017915
RP&S FIREWATER PIPING - PH 2-3
10018771
RP&S WATER DRAW LINES NTF
10019386
TK 80219 SLUDGE IMPROVEMENTS-PIPING
10019394
LINE-51 PRESSURE RELIEF VALVE TAG# R-7129

Exhibit C – Page 7
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10019395
LINE-51 PRESSURE RELIEF VALVE TAG# R-7130
10019396
LINE-51 PIPING
10019400
RP&S TK 80219 DOUBLE BOTTOM
10019510
LAR-W TANK FARM-SYSTEM 1 PIPING
10019511
LAR-W TANK FARM-SYSTEM 3 PIPING
10019512
LAR-W TANK FARM-SYSTEM 4 PIPING
10019513
LAR-W TANK FARM-SYSTEM 5 PIPING
10019514
LAR-W TANK FARM-SYSTEM 6 PIPING
10019515
LAR-W TANK FARM-SYSTEM 7 PIPING
10019991
INLINE BLENDING RVP ANALYZER ELEMENT 72-AE-0658A
10019992
INLINE BLENDING RVP ANALYZER ELEMENT 72-AE-0658B
10019993
INLINE BLENDING RVP ANALYZER TRANSMITTER 72-AT-065
10019994
INLINE BLENDING RVP ANALYZER SAMPLE CON 72-AU-0658
10020138
SLUDGE PIPING REROUTE FROM TK-7501 & TK-7201
10020144
3 10' CONNECT PIPELINE CARSON TERMINAL 2 LNS 28/32
10020323
8,200' PIPELINE EXT OF 71R/79R @ VAULT 252 TO LARW
10021447
E51 7130 RV RE-ROUTE TO SLOPS- 42 FT-6 INCH PIPE
10021659
TANK 776 TRANSMITTERS -TANK GAUGING-PHASE III
10021660
TANK 777 TRANSMITTERS -TANK GAUGING-PHASE III
10021661
TANK 778 TRANSMITTERS -TANK GAUGING-PHASE III
10021662
TANK 779 TRANSMITTERS -TANK GAUGING-PHASE III
10021663
TANK 780 TRANSMITTERS -TANK GAUGING-PHASE III
10021664
TANK 1501 TRANSMITTERS -TANK GAUGING-PHASE III
10021665
TANK 1502 TRANSMITTERS -TANK GAUGING-PHASE III
10021666
TANK 1503 TRANSMITTERS -TANK GAUGING-PHASE III
10021667
TANK 6000 TRANSMITTERS -TANK GAUGING-PHASE III
10021668
TANK 6001 TRANSMITTERS -TANK GAUGING-PHASE III
10022407
METHANOL INJECTION FOUNDATION
10022420
HCU TO TK 80035 6" LINE - 110 FT
10022423
FPT BTTMS TO ULSD- CNTRL VALVE TO TK 36002 -FV 208
10022424
FPT BTTMS TO ULSD - CNTRL VALVE TO TK 80070 - PV 2
10022425
FPT BOTTOMS TO ULSD - PIPING 40 FT
10022598
LARW - GASOLINE COMP. TK FRM PIPE - 100 FT, 10 INC
10022663
PROPANE LOADOUT REC - VPR LINE 560 FT - AVRG 3 INC
10022664
PROPANE LOADOUT REC - 3" CV TO FLARE (74-FV525)
10022665
PROPANE LOADOUT REC - 2" CV TO PRPN BULLET (74-FV5
10022666
PROPANE LOADOUT REC - MERCAPTAN CONV. BED (V-3634)
10022667
PROPANE LOADOUT REC. ELECT & INSTRUMENTATION
10022677
DISTILLATE TIE - T16 (LBT) PIPING - 50FT, 12 INCH
10022778
RP&S ADDT'L WATER DRAW LINES
10023010
RP&S ADDT'L WATER DRAW LINES (FINAL PHASE)
10023311
TANK 80092

Exhibit C – Page 8
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10023653
OFFSITES - TANKAGE - TK-080071-origin# 100042927-1
10023654
Offsites - Tankage - TK-080075-origin# 100042931-1
10023655
OFFSITES - TANKAGE - TK-080079-origin# 100042935-1
10023656
80079 SAAB TANK RADAR PRO GAUG-origin# 100043910-1
10023728
PACIFIC PIPELINE - PLC-PNL-1
10023729
PACIFIC PIPELINE - RIO-PNL-1
10023730
PACIFIC PIPELINE - RIO-PNL-2
10023802
TANK 80036
10023856
TANK 125001
30000280
TANK 80039 REBUILD
30000391
TANK 80065 REBUILD
30000396
TANK 80081 REBUILD
30000404
TANK 80038 REBUILD
30000463
Piping
30001283
TANK 125001 REBUILD
30001292
TANK 80036 REBUILD
30003929
TANK 80060 REBUILD
95000478
TANK 80218 1ST & 2ND SHELL COURSE
99000507
TANK 80221 DOUBLE BOTTOM REPLACEMENT
99001074
TANK 125000 FOAM CHAMBERS AND PIPING
99001075
TANK 125000 REBUILD
99001076
TANK 125000 INSTRUMENTATION AND ELECTRICAL
99001077
TANK 125000 PIPING
99001078
TANK 125000 SAMPLE STATIONS
99001358
TANK 80035
99000595
TANK 80218 ROOF REPLACEMENT
99000596
TANK 80218 INSTRUMENTATION AND GAUGING
10013383
OFFSITES - TANKAGE - TK-080218 WATER
10013996
Offsites - Tankage - TK-007201
10016513
TRUCK RACK FLARE HEADER PIPING
10016514
TRUCK RACK FLARE HEADER FOUNDATION AND SUPPORT
10016515
TRUCK RACK RELIEF VALVE R-6875
10016516
TRUCK RACK RELIEF VALVER-6876
10016517
TRUCK RACK RELIEF VALVER-6877
10016518
TRUCK RACK RELIEF VALVER-6878
10016519
TRUCK RACK RELIEF VALVER-6879
10016520
TRUCK RACK RELIEF VALVER-6705
10016521
TRUCK RACK RELIEF VALVER-6706
10016522
TRUCK RACK FH FIREPROOFING
10016523
TRUCK RACK FH INSTRUMENTATION
10017119
LPG TRUCK LOADING PIPING & VALVES PH1
10017209
LAR TKRK FLOW LOOP 02F106

Exhibit C – Page 9
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10017210
LAR TKRK FLOW LOOP 74F0522
10020598
PROPANE RACK INSTRUMENTATION UPGRADES
10021646
RP&S-BUTANE TRUCK RCK PIPING - 150', 8"
10021647
RP&S-BUTANE TRUCK RCK PIPING - 350', 6"
10021648
RP&S-BUTANE TRUCK RCK PIPING - 150' - 4"
10021649
RP&S-BUTANE TRUCK RCK PIPING - 240' - 2"
10022899
RP&S-PROPANE TRUCK RCK PIPING - 50', 1"
10022900
RP&S-PROPANE TRUCK RCK PIPING -100', 10"
10022901
RP&S-PROPANE TRUCK RCK PIPING - 100', 6"
10022902
RP&S-PROPANE TRUCK RCK PIPING - 100', 3"
10022903
RP&S-PROPANE TRUCK RCK PIPING -150', 4"
10022904
RP&S-PROPANE TRUCK RCK -FLARE PIPING - 200', 2"
10022905
RP&S-PROPANE EQUALIZING LINE- 200', 2"
10012677
RAILROAD UNDERPASS CATHODIC PROTECTION ANODE BEDS
10012663
P/L PIG LAUNCHER & RECEIVER - AT REFINERY
10013262
In Line Blend Analyzers & Instrumentation
10018911
CUSTODY TRANSFER METER TAG# 72FT-111
10018912
TRANSMIX METER TAG# 72 FE-112
10018913
TRANSMIX METER TAG# 72 FE-113
10018914
TRANSMIX CUSTODY METER ELECTRICAL
10018915
TRANSMIX VALVE TAG# 72 FV-112
10018916
TRANSMIX VALVE TAG# 72 FV-113
30000174
Tank Gauges PH III
30000177
RAIL CAR FALL PROTECTION
30000308
LARW NW Tank Farm 5B Firewater Piping
30000335
70 Series Butane Sphere Level Gauges
30001335
LARW NW Tank Farm 5A Firewater Piping
10018873
LOADING RACKS
10018829
TK 0014 MTBE SO TK FIELD 3N/8W
10018831
TK 0959 FCC FEED E. OF #9 C.T. 22N/1W
10018834
TK 0061 COLD SOUR GAS OIL
10018835
TK 0062 REFORMATE
10018836
TK 0063 REFORMATE
10018837
TK 0773 HYDRO GO FD ASPH. BLENDG. 9N/4E
10018840
TK 0064 ALKYLATE
10018841
TK 0031 MTBE UNF JP-4 SO TK FIELD 8N/4W
10018864
TANKS < 4,000 BBLs (COUNT: 63)
10019290
INTERMEDIATE STOVE OIL FLEX
10020609
TK-73 PRESSURE TRANSMITTER
10020610
TK-76 PRESSURE TRANSMITTER
10023767
TANK 62 ACTUATOR - 75-HV-718
10023768
TANK 63 ACTUATOR -75-HV-719

Exhibit C – Page 10
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



Asset No.
Asset Description
10018838
TK 0016 ANS CRUDE N. SLOPE S. TK FIELD 3N/10W
10018839
TK 0017 ANS CRUDE N. SLOPE S. TK FIELD 3N/11W
10018846
1 CRUDE TK 0190 SLOP OIL UN TOLUENE 3N/2E
30001382
Other Machinery & Equipment
95000479
TANK 61 FLOOR
10019475
SPHERE 78 FIRE DELUGE SYSTEM
10021279
TK-FARM PROGRAMMABLE LOGIC CONTROLLER 75-PLC-9333
10021534
TK 16 - CRUDE FILL LINE (12"-206')
10021535
TK 16 - ALT FILL LINE (8"-152')
10021536
TK 16 - SUCTION LINE (12"-161')
10021537
TK 17 - CRUDE FILL LINE (12"-168')
10021538
TK 17 - ALT FILL LINE (8"-173')
10021539
TK 17 - SUCTION LINE (12"-185')
10022613
#1 TRTR TO PUMP SLAB PIPING - 200 FT - AVG 6 INCH
10047918
JET FUEL PIPING LINE 103
10023060
LARW FIREWATER SYSTEM NW TANK - 5A

For clarification purposes only (and for ease of future reference), the storage tanks listed below are intended to be included as part of the LARW and LARC Tankage; however, such tanks may not be set forth in the list above due to certain internal accounting and general ledger issues.


LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
LAR - Carson
14
358,162
LAR - Carson
16
96,247
LAR - Carson
17
95,649
LAR - Carson
31
82,396
LAR - Carson
61
100,965
LAR - Carson
62
100,312
LAR - Carson
63
100,600
LAR - Carson
64
100,220
LAR - Carson
73
30,570
LAR - Carson
74
15,021
LAR - Carson
75
14,972
LAR - Carson
76
30,570
LAR - Carson
78
10,239
LAR - Carson
959
163,366
LAR - Carson
350
1,770
LAR - Carson
351
1,770

Exhibit C – Page 11
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
LAR - Carson
352
1,770
LAR - Carson
353
1,770
LAR - Carson
354
1,770
LAR - Carson
355
1,770
LAR - Carson
398
6,910
LAR - Carson
399
6,910
LAR - Carson
677
16,671 (OOS)
LAR - Carson
678
16,690 (OOS)
LAR - Carson
679
16,307 (OOS)
LAR - Carson
680
16,279 (OOS)
LAR - Carson
681
30,000
LAR - Carson
682
30,000
LAR - Carson
683
30,000
LAR - Carson
684
30,000
LAR - Carson
773
97,844
LAR - Wilmington
476
400
LAR - Wilmington
776
700
LAR - Wilmington
777
700
LAR - Wilmington
778
700
LAR - Wilmington
779
700
LAR - Wilmington
780
700
LAR - Wilmington
1501
985
LAR - Wilmington
1502
985
LAR - Wilmington
1503
985
LAR - Wilmington
6000
6,000
LAR - Wilmington
6001
6,000
LAR - Wilmington
7201
7,156
LAR - Wilmington
7501
8,395
LAR - Wilmington
11000
11,567
LAR - Wilmington
11001
11,567 (OOS)
LAR - Wilmington
11002
11,567 (OOS)
LAR - Wilmington
11003
11,567 (OOS)
LAR - Wilmington
11004
11,567 (OOS)
LAR - Wilmington
13500
13,818 (OOS)
LAR - Wilmington
13501
13,818 (OOS)
LAR - Wilmington
13502
13,818
LAR - Wilmington
13503
13,818
LAR - Wilmington
13504
13,818
LAR - Wilmington
13505
13,818
LAR - Wilmington
13506
13,818
LAR - Wilmington
13507
13,818 (OOS)

Exhibit C – Page 12
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
LAR - Wilmington
13508
13,818
LAR - Wilmington
13509
13,818 (OOS)
LAR - Wilmington
13510
13,818
LAR - Wilmington
13511
13,818
LAR - Wilmington
13512
13,818 (OOS)
LAR - Wilmington
20426
20,144
LAR - Wilmington
36001
36,612
LAR - Wilmington
36002
36,612
LAR - Wilmington
50000
50,000
LAR - Wilmington
76000
76,158
LAR - Wilmington
80033
81,383
LAR - Wilmington
80034
81,383
LAR - Wilmington
80035
81,383
LAR - Wilmington
80036
81,383
LAR - Wilmington
80037
81,383
LAR - Wilmington
80038
81,383
LAR - Wilmington
80039
81,383
LAR - Wilmington
80042
81,383
LAR - Wilmington
80044
81,383
LAR - Wilmington
80045
81,383
LAR - Wilmington
80049
81,383
LAR - Wilmington
80050
81,383
LAR - Wilmington
80051
81,383
LAR - Wilmington
80055
81,383
LAR - Wilmington
80057
82,340
LAR - Wilmington
80058
81,383
LAR - Wilmington
80061
81,383
LAR - Wilmington
80062
81,383
LAR - Wilmington
80063
81,383
LAR - Wilmington
80064
81,383
LAR - Wilmington
80065
81,383
LAR - Wilmington
80066
81,383
LAR - Wilmington
80067
81,383
LAR - Wilmington
80068
81,383
LAR - Wilmington
80069
81,383
LAR - Wilmington
80070
81,383
LAR - Wilmington
80071
81,383
LAR - Wilmington
80072
81,383
LAR - Wilmington
80075
78,511
LAR - Wilmington
80076
81,383
LAR - Wilmington
80077
81,383

Exhibit C – Page 13
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
LAR - Wilmington
80078
81,383
LAR - Wilmington
80079
81,383
LAR - Wilmington
80080
81,383
LAR - Wilmington
80081
81,383
LAR - Wilmington
80082
81,383
LAR - Wilmington
80083
81,383
LAR - Wilmington
80084
81,383
LAR - Wilmington
80085
81,383
LAR - Wilmington
80087
81,383
LAR - Wilmington
80089
81,383
LAR - Wilmington
80090
81,383
LAR - Wilmington
80091
81,383
LAR - Wilmington
80092
81,383
LAR - Wilmington
80209
85,610
LAR - Wilmington
80210
85,610
LAR - Wilmington
80211
85,610
LAR - Wilmington
80212
85,610
LAR - Wilmington
80213
85,610
LAR - Wilmington
80214
85,610
LAR - Wilmington
80215
85,610
LAR - Wilmington
80216
85,610
LAR - Wilmington
80217
85,610
LAR - Wilmington
80218
80,000
LAR - Wilmington
80219
85,610
LAR - Wilmington
80220
85,610
LAR - Wilmington
80221
81,239
LAR - Wilmington
96000
96,689
LAR - Wilmington
96059
96,689
LAR - Wilmington
118066
117,477
LAR - Wilmington
125000
123,278
LAR - Wilmington
125001
123,278
LAR - Wilmington
125002
125,897
LAR - Wilmington
125003
125,897
LAR - Wilmington
125004
125,897


Exhibit C – Page 14
LARW and LARC Tankage
LARW Rail Rack and Trackage & LARC Rail Rack and Trackage
LARW LPG Truck Rack & LARC LPG Truck Rack



EXHIBIT J

Wingate Terminal

Asset No.
Asset Description
L000000068
Normal Butane Rail Pump
L000000069
Normal Butane Rail Pump
L000000070
Iso-Butane Pipeline Pump
L000000072
Fire Water Pump House
L000000073
Control Room
L000000074
Boiler House
L000000075
Warehouse
L000000076
New Front Office
L000000077
IE Shop
L000000078
Welding Shop
L000000079
Rail Rack
L000000080
Owned Rail - 20000 LN SQ FT
L000000081
Normal Butane Storage Sphere
L000000082
Normal Butane Storage Sphere
L000000083
Gasoline Storage Sphere
L000000084
Gasoline Storage Sphere
L000000085
Gasoline Storage Sphere
L000000086
Gasoline Storate Sphere
L000000087
Gasoline Storage Sphere
L000000088
ISO Butane Tank
L000000089
ISO Butane Tank
L000000090
Propane Tank
L000000091
Propane Tank
L000000092
Propane Storage Tank
L000000093
Normal Butane Tank
L000000094
Gasoline Vent KO Drum
L000000095
Re-Run
L000000105
Vin#1FT7W2ZB67BEC97445
L000000308
Caterpillar Generator
L000000427
Backhoe Loader
L000000428
2012 Xtreme Telehandler Forklift
TBD
Flare
TBD
Water pipeline
TBD
Off site water tanks

For clarification purposes only (and for ease of future reference), the storage tanks listed below are intended to be included as part of the WingateTankage; however, such tanks may not be set forth in the list above due to certain internal accounting and general ledger issues.

Exhibit J – Page 1
Wingate Terminal



LOCATION
TANK NUMBER
RESERVED CAPACITY
(in barrels)
Wingate Terminal
V-500 - V-505
8,004
Wingate Terminal
V-506 - V-510
8,521
Wingate Terminal
V-516 - V-518
5,450
Wingate Terminal
V-511 - V515
12,413
Wingate Terminal
V-200 - V-207
9,941
Wingate Terminal
V-208
1,243
Wingate Terminal
V-400 - V-407
10,652
Wingate Terminal
V-209 - V-214
10,291
Wingate Terminal
V-215
7,676
Wingate Terminal
V-216
10,313
Wingate Terminal
V-100 - V-101
12,390
Wingate Terminal
V-102 - V-103
20,791
Wingate Terminal
V-104
10,313
Wingate Terminal
V-519
95



Exhibit J – Page 2
Wingate Terminal



EXHIBIT P

Excluded Assets and Liabilities

Mandan Refinery

Asset Description
High voltage equipment, transformers and feeders up to the disconnect at the switch rack dedicated to assets owned by the Logistics Parties

ResCar train car repair facility

Salt Lake City Refinery

Asset Description
High voltage equipment, transformers and feeders up to the disconnect at the switch rack dedicated to assets owned by the Logistics Parties

Main fire water piping running along the perimeter of the tank farm and outside of the tank farm boundary

Any storm or wastewater piping inside the boundary of the tank farm



Exhibit P – Page 1
Excluded Assets and Liabilities



LARW Refinery Unit and LARC Refinery Unit

Asset Description
High voltage equipment and feeders remains the responsibility of the refinery up to the disconnect at the switch rack dedicated to assets owned by the Logistics Parties
Main 210lb steam line to/from the LARW Refinery Unit and the sulfur recovery plant (“SRP”)
Stripped pipelines to/from LARW Refinery Unit and the SRP
Fuel gas pipeline to/from LARW Refinery Unit and the SRP
Spare pipeline to/from LARW Refinery Unit and the SRP
Cross plant DEA
Cross plant flare
Cross plant LPG/H2/fuel gas system
Cross plant sour water systems
Cross plant vapor recovery systems unless equipment if fitted on tanks
Cross plant slop systems
Blended effluent pipeline from LCOD/HCOD to tank 80043
Wastewater separators and ponds
SRP blow down line from the SRP to ditch at tank-80216
Communication trunks and utility piping to/from the SRP and the refinery

Wingate Terminal

Asset Description
Fractionation plant with associated vessels and piping

Bakersfield Asphalt Terminal

Asset Description
Tank T-60002 (owned by Granite Construction)



Exhibit P – Page 2
Excluded Assets and Liabilities

Exhibit 10.2

THIRD AMENDED AND RESTATED SCHEDULES
TO FOURTH AMENDED AND RESTATED OMNIBUS AGREEMENT

A Fourth Amended and Restated Omnibus Agreement was executed as of October 30, 2017 (the “Fourth Amended and Restated Omnibus Agreement”), among Andeavor, on behalf of itself and the other Andeavor Entities, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Andeavor Logistics LP and Tesoro Logistics GP, LLC. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Fourth Amended and Restated Omnibus Agreement.
The Parties agree that the Schedules are hereby amended and restated in their entirety as of the date hereof to be as attached hereto. Pursuant to Section 9.12 of the Fourth Amended and Restated Omnibus Agreement, such amended and restated Schedules shall replace the prior Second Amended and Restated Schedules as of the date hereof and shall be incorporated by reference into the Fourth Amended and Restated Omnibus Agreement for all purposes.





[Signature Page Follows]






    







Executed as of September __, 2018, but effective August 6, 2018.

ANDEAVOR

By:      /s/ Gregory J. Goff            
Gregory J. Goff
President and Chief Executive Officer


TESORO REFINING & MARKETING COMPANY LLC

By:      /s/ Gregory J. Goff            
Gregory J. Goff
President and Chief Executive Officer


TESORO COMPANIES, INC.

By:      /s/ Gregory J. Goff            
Gregory J. Goff
President and Chief Executive Officer


TESORO ALASKA COMPANY LLC

By:      /s/ Gregory J. Goff            
Gregory J. Goff
President and Chief Executive Officer


Signature Page
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement



ANDEAVOR LOGISTICS LP

By:     Tesoro Logistics GP, LLC,
its general partner

By:      /s/ Steven M. Sterin             
Steven M. Sterin
President and Chief Financial Officer

TESORO LOGISTICS GP, LLC


By:      /s/ Steven M. Sterin             
Steven M. Sterin
President and Chief Financial Officer



















Signature Page
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


Schedule I
Pending Environmental Litigation
For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

The soil and groundwater on the southern central portion of the site near the 24-inch crude oil line have been impacted with hydrocarbons from a release from the line first observed in September 2011. The California Regional Water Quality Control Board issued an Investigative Order dated September 30, 2011 and to date all requirements of the order have been met. Additional investigative or remedial activities may be required.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement dated as of December 6, 2013 (“ Carson Assets Indemnity Agreement ”), among the Partnership, the General Partner, Tesoro Logistics Operations LLC (the “ Operating Company ”) and TRMC, supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For West Coast Assets Contribution Agreement listed on Schedule VII:

None.


Schedule I- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: Andeavor, Tesoro Alaska, TRMC, the Partnership and the General Partner are subject to a pending consent decree with the United States Environmental Protection Agency and the Department of Justice pursuant to which injunctive relief will be ordered with respect a number of refineries (the “2016 Environmental Consent Decree”).

ANCHORAGE AND FAIRBANKS TERMINALS: Andeavor, Tesoro Alaska, TRMC, the Partnership and the General Partner are subject to the pending 2016 Environmental Consent Decree pursuant to which injunctive relief will be ordered with respect a number of refineries.

The indemnification obligations of the Andeavor Entities under Section 3.1(a) of the Fourth Amended and Restated Omnibus Agreement with regard to the 2016 Environmental Consent Decree are limited as provided in Schedule IX.

For Martinez Assets Contribution Agreement listed on Schedule VII:

Andeavor, Tesoro Alaska, TRMC, the Partnership and the General Partner are subject to the 2016 Environmental Consent Decree.

For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:

The environmental indemnification provisions in Article VI of the Sponsor Equity Restructuring Agreement dated August 13, 2017 (“SERA”) between Andeavor, Andeavor Logistics LP and Tesoro Logistics GP, LLC supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, other than Section 3.5(b), and shall be the exclusive provisions for all indemnification obligations relating to the subject matter of the indemnities so provided in Article VI of the SERA.


For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

1.
In July 2016, the US EPA and the U.S. Department of Justice announced a $425 million settlement with TRMC, including the TRMC Anacortes Refinery, in relation to violations of the Clean Air Act. The settlement (the Consent Decree) with the U.S. Department of Justice requires that the storage tanks be added to the Refinery’s LDAR program and be monitored regularly for leaks. Some valve locations are difficult to monitor and may require relocation nearer to grade. These locations have been identified and will be addressed when

Schedule I- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




the tanks are taken out of service during inspections. Per the Consent Decree, the Refinery must install closed-purge, closed-loop, or closed-vent samplers at all storage tanks by 2021. According to facility representatives, there are 42 tanks left to retrofit.

2.
The recent Consent Decree with the U.S. Department of Justice has required that the Refinery perform a BWON (Benzene Waste Operations National Emission Standards for Hazardous Air Pollutants) Audit to recalculate the Total Annual Benzene amount and the total benzene emitted under the 2 Mg per year exemption. During this process, the Refinery determined that it exceeded the 2 Mg exemption and reported the exceedance to NWCAA in the 2016 Annual Compliance Certification air operating permit.


For 2018 Assets Contribution Agreement listed on Schedule VII:

1.
With respect to the Mandan Rail Rack and Trackage and the Salt Lake Rail Rack and Trackage (each as defined in the 2018 Assets Contribution Agreement), an August 2013 Fuels Consent Decree contains provisions that apply to tanks storing Conventional Gasoline. Capital Improvements and Audits have been performed under the Consent Decree, but the tanks are still subject to a mandated System-Wide Compliance Plan for sampling tank contents.

2.
With respect to the LARW Refinery Unit, the LARC Refinery Unit, and the LA Refinery Interconnecting Pipeline (each as defined in the 2018 Assets Contribution Agreement), litigation by environmental advocacy group(s), CBE v. SCAQMD, challenging the LARIC Environmental Impact Review for combining the LARW Refinery Unit and the LARC Refinery Unit. Contests anything within scope of that EIR, including LA Refinery Interconnecting Pipeline connections.

3.
For LARC Refinery Unit operations and assets only, the 2001 EPA Consent Decree entitled U.S. and the State of Indiana, State of Ohio, and the Northwest Air Pollution Authority, Washington v. BP Exploration & Oil Co .

4.
LARC Tankage (as defined in the 2018 Assets Contribution Agreement) was issued Cleanup and Abatement Order (CAO) No. 90-121, dated 22 August 1990.

5.
Certain of the Assets (as defined in the 2018 Assets Contribution Agreement) are subject to a 2016 Environmental Consent Decree with the United States Environmental Protection Agency and the Department of Justice.




Schedule I- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule II

Environmental Matters

For Initial Contribution Agreement set forth on Schedule VII :

1. Anchorage #1 Terminal soil and groundwater have been impacted by gasoline and diesel releases from previously buried pipelines. The site is considered characterized and is currently undergoing removal of product from the water table, groundwater treatment, and long-term monitoring.

2. Anchorage #2 Terminal soil and groundwater have been impacted by gasoline releases occurring prior to Andeavor’s purchase of the facility. The site is considered characterized and is currently undergoing groundwater monitoring and treatment. Off-site groundwater investigations are scheduled for 2012.

3. Stockton Terminal soil and groundwater have been impacted by gasoline and diesel releases from pipelines and/or product storage tanks. The site is considered substantially characterized and is undergoing groundwater treatment and groundwater monitoring. Off-site groundwater impacts are commingled with neighboring petroleum storage terminals.

4. Burley Terminal groundwater was impacted by gasoline releases occurring prior to Andeavor’s purchase of the facility. Groundwater impacts were commingled with neighboring petroleum storage terminals. Hydrocarbon concentrations in groundwater samples do not exceed previously established target levels for groundwater and surface water protection. Regulatory closure is pending.

5. Wilmington Sales Terminal soil and groundwater have been impacted by gasoline releases occurring prior to Andeavor’s purchase of the facility. Groundwater investigation and monitoring is on-going. Andeavor is indemnified by the previous owner for Investigation and remediation obligations.

6. Salt Lake City Terminal soil and groundwater have been impacted by gasoline and diesel releases from pipelines and/or product storage tanks occurring prior to Andeavor’s purchase of the facility. The site is considered characterized and is currently undergoing removal of product from the water table and long-term monitoring. There are no known soil or groundwater impacts at the Northwest Crude Oil tank farm.

7. The Stockton Terminal emits volatile organic compounds (VOCs) below “major source” emission criteria. In 2010, the San Joaquin Air Quality Management District announced it is reducing its major source threshold. When the Stockton Terminal expands its operations or increases throughput, the potential to emit VOC will increase and the Stockton terminal will become subject to regulation as a major source. This will require a Title V Air Operating Permit. In addition, the Stockton facility will be required to install an automated continuous emission monitor at a cost of approximately $75,000.

Schedule II- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For Amorco Contribution Agreement set forth on Schedule VII :


1.     The soil and groundwater on the site of the Tankage, as defined in the Amorco Contribution Agreement, have been impacted by methyl tertiary butyl ether
releases from previously buried pipelines. The site is considered characterized and is currently undergoing removal of methyl tertiary butyl ether from the water table, groundwater treatment, and long-term monitoring.

2.     Any environmental violation or contamination due to SHPL, as defined in the Amorco Contribution Agreement, being underground prior to the Closing Date.

For Long Beach Contribution Agreement listed on Schedule VII :


1.     Any environmental violation or contamination, as defined in the Long Beach Contribution Agreement, prior to the Closing Date.

2.     Any anomalies in the Pipeline System that require repair as discovered by the first internal line inspection of any portion of the Pipeline System for which TRMC is notified in writing prior to the First Deadline Date.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

The environmental indemnification provisions of the Carson Assets Indemnity Agreement supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, except as otherwise expressly provided in the Carson Assets Indemnity Agreement.

Schedule II- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For West Coast Assets Contribution Agreement listed on Schedule VII:

1.     Nikiski Terminal. Subsurface soil and groundwater has not been assessed at this facility. There have been no historic releases that have prompted a soil and groundwater investigations. The area within the tank containment berms was lined with low-permeability soils in the early 1990s. The loading rack, fuel filters and piping manifolds are above concrete secondary containment.

2.      Anacortes Light Ends Rail Facility and planned diesel truck rack areas. Subsurface soil and groundwater has not been assessed at this area of the Anacortes refinery. There have been no historic releases that have prompted a soil and groundwater investigation.

3.     Anacortes Storage Facility . Historic tank overtopping events and tank bottom corrosion releases have impacted soil and groundwater in the shore tank area of the Anacortes refinery. Groundwater near the shore tanks is monitored for natural attenuation. Groundwater between the tanks and the nearby shoreline has not been characterized, however the hydrocarbon concentrations in this area is not expected to be a threat to human health or the environment.

4.     Martinez Refinery LPG Loading Area . Past waste disposal and hydrocarbon releases have impacted areas surrounding the Martinez Refinery LPG loading rack, pad and tanks. Areas north and northeast of the rack were used for past waste disposal. There are documented intra-refinery pipeline releases in the north and western boundaries of the LPG rack concrete pad. The refinery plans to excavate and cap the nearby waste disposal area in 2017. The pipeline releases are being remediated as part of the overall Martinez refinery cleanup. Soil and groundwater directly beneath the loading rack, propane tanks and truck pad have not been sampled.

5.     Tesoro Alaska Pipeline.

The pump station for the Tesoro Alaska Pipeline is adjacent to the Kenai Refinery Lower Tank Farm. Multiple historic tank and buried pipeline releases have impacted soil and groundwater in the area; however there are no documented releases from the pipeline pump station. The soil and groundwater surrounding the pump station is considered characterized and undergoing groundwater monitoring and treatment.

A pipeline release in 2001 resulted in soil, groundwater and surface water impacts in an undeveloped area of the Kenai Peninsula. The quantity of the release is not known. Soil surrounding the release was excavated and stockpiled at the Kenai Refinery while groundwater and surface water were remediated on-site. The Alaska Department of Environmental Conservation issued a No Further Action letter for this cleanup effort in 2008. There are no other known release sites on the pipeline between the Kenai Refinery and Anchorage.

Schedule II- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





Historic spills and releases have impacted the Anchorage #1 terminal, including past releases from the Tesoro Alaska Pipeline receiving station. Groundwater remediation monitoring is ongoing across the Anchorage #1 terminal. In addition, a soil vapor venting system is being installed to address a flame suppressant compound detected in soils near the receiving station control room.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE:

Area of significant groundwater and soil impacts: (1) lower tank farm groundwater impact source area including 1988 jet fuel release and unknown light products release in area of Tank 63, (2) process unit historic releases from oily water sewer system including releases from failed grout in subsurface sewer hubs, (3) groundwater issues generally 35 to 40 feet below ground surface and groundwater impacts in three water-bearing zones below refinery and off-site and (4) possible contributor to refinery-wide groundwater impacts.

ANCHORAGE AND FAIRBANKS TERMINALS:

Pursuant to the Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016 (the “ Alaska Assets Contribution Agreement ”), among Tesoro Logistics LP, a Delaware limited partnership (the “ Partnership ”), Tesoro Logistics GP, LLC, a Delaware limited liability company and the general partner of the Partnership (the “ General Partner ”), Tesoro Logistics Operations LLC, a Delaware limited liability company (the “ Operating Company ”), Tesoro Alaska Company LLC, a Delaware limited liability company (“ TAC ”) and Tesoro Corporation, a Delaware corporation (“ Tesoro ”), TAC contributed 100% of the limited liability company interests (the “ TAT Interests ”) in Tesoro Alaska Terminals LLC, a Delaware limited liability company (“ TAT ”), to the General Partner, the General Partner contributed 100% of the TAT Interests to the Partnership, and the Partnership contributed 100% of the TAT Interests to the Operating Company, all on the terms and conditions set forth in that contribution agreement.

Prior to the date of the Alaska Assets Contribution Agreement, TAT acquired certain assets defined as the “Anchorage and Fairbanks Terminals” in the Alaska Assets Contribution Agreement from Flint Hills Resources Alaska, LLC pursuant to an Asset Purchase Agreement, dated November 20, 2015 (the “ Flint Hills APA ”), by and between Flint Hills Resources Alaska, LLC and TAC. As described in the Flint Hills APA, the following liabilities existed at the Anchorage and Fairbanks Terminals prior to the closing of the transactions contemplated under the Flint Hills APA:


Schedule II- Page 4 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Anchorage Terminal :
1.
Deviations reported under Anchorage Air Permit No. AQ0235TVP03, Issue Date: April 2, 2014, Effective Date: May 2, 2014
Flint Hills Resources Alaska, LLC did not submit a report as required under Condition 68 based upon defects listed in Condition 6.3 discovered during the out of service inspection conducted on T-4216 during July 2014. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
Flint Hills Resources Alaska, LLC did not report all emissions or operations that exceed or deviate from the requirements of its permit within 30 days of the end of the month in which the excess emission or deviation occurred. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
Flint Hills Resources Alaska, LLC did not perform preventative maintenance in accordance with 40 CFR Subpart ZZZZ within 365 days of effective date on EU IDs 7, 8, and 9. The maintenance was performed 2 days after that date. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated July 30, 2014.
Flint Hills Resources Alaska, LLC did not report all emissions or operations that exceed or deviate from the requirements of this permit within 30 days of the end of the month in which the excess emissions or deviation occurred. The deviation report covering this incident is set out in the Flint Hills Resources Alaska, LLC deviation report dated January 29, 2015.
On April 10, 2014. ADEC issued Flint Hills Resources Alaska, LLC a letter of Acceptance of the Anchorage Facility Compliance Certificate, and identified 4 deviations from the air permit.
2.
In a letter dated July 22, 2015, the ADEC indicated that the Anchorage Terminal Oil Discharge Prevention and Contingency Plan needed the additional information specified in the July 22, 2015 letter to be submitted in order for the plan renewal to be approved. On September 2, 2015, the facility submitted the requested information and is awaiting ADEC approval.
3.
On May 15, 2015 Flint Hills Resources Alaska, LLC received a notice of failure to pay Air Quality fees relating to Air Permit No. AQ0235TVP03. Those fees were paid on June 2, 2015.

Schedule II- Page 5 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




4.
In a letter dated October 1, 2015, ADEC approved the facility’s request for a waiver of secondary containment, subject to the terms of the letter, until March 31, 2016.
5.
On July 24, 2014 ADEC issued a letter to Flint Hills Resources Alaska, LLC advising that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the July 22, 2014 Anchorage Facility Jet Fuel release.
6.
On April 21, 2014, ADEC issued a letter to Flint Hills Resources Alaska, LLC advising it that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the April 20, 2014 gasoline release.
Fairbanks Terminal :
(i)
In a letter dated May 29, 2015, ADEC detailed items that needed correction related to ADEC’s May 19, 2015 inspection of the terminal and its Oil Discharge Prevention and Contingency Plan. The facility has submitted a response to ADEC and is working with the agency to correct the identified items.
(ii)
On April 24, 2014 ADEC advised Flint Hills Resources Alaska, LLC that the Primary Response Action Contractor is no longer an ADEC approved and registered contractor. Therefore, Flint Hills Resources Alaska, LLC’s Fairbanks Facility Oil Discharge Prevention and Contingency Plan was out of compliance and needed amendment.
(iii)
Two underground storage tanks are located at the Fairbank Terminal, both of which are used to store heating oil. One underground storage tank was removed from the Purchased Site prior to Flint Hills Resources Alaska, LLC’s leasehold.
(iv)
Asbestos materials has been identified and are known to be located at the Anchorage Facility in the following locations:

Schedule II- Page 6 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Material Type
Location(s)
EPA Category
Gray Caulk
(10% Chrysotile)
Fire Pump Room, Warehouse
Category II
Sheetrock
(4% Chrysotile)
Boiler Room, Warehouse
Category II
Brown Insulation
(5% Chrysotile)
Heat Exchanger Building
Category I
Window Caulk
(3% Chrysotile)
Warehouse
Category II
Gray Mastic
(10% Chrysotile)
Concrete Pad Near Tank 4136
Category II
Black Mastic
(6% Chrysotile)
Concrete Pad Near Tank 4136
Category II
Black Mastic
(17% Chrysotile)
Exchanger on West Side of Asphalt Tank Farm
Category II
Black Mastic
(6% Chrysotile)
Piping located near railroad tracks on Ocean Dock Road.
Category II
Black Mastic
(20% Chrysotile)
Piping on side of Tank 4263, East Tank Farm
Category II
White Insulation
(60% Chrysotile)
Piping on side of Tank 4263, East Tank Farm
Category I
Mastic/Insulation
(20% Chrysotile)
Top skirt of Tank 4263, East Tank Farm
Category I
Mastic
(15% Chrysotile)
Sections of buried pipelines
Category II

In the Flint Hills APA, Flint Hills Resources Alaska, LLC noted that it had no knowledge of other asbestos-containing material currently located at the sites purchased by TAT. However, Flint Hills Resources Alaska, LLC noted that asbestos material has been removed in the past during renovation and/or demolition work at the purchased sites.
Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that it has no knowledge of polychlorinated biphenyls (“ PCB ”) material or equipment containing PCBs existing at the purchased sites. Flint Hills Resources Alaska, LLC, however, noted that it understands that PCBs may have been present under prior lessees operations of the sites but has no direct knowledge of this.
Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that it understands “disposal areas” to include areas where Hazardous Materials have been Released. See Section 3.11(h) of Seller Disclosure Schedule under the Flint Hills APA for Flint Hills Resources Alaska, LLC’s knowledge regarding disposal areas on the Purchased Sites. In addition, a significant amount of fill material was used to augment the elevation and stability of the soils beneath the Anchorage facility. This fill included debris and materials such as such as wood, metal, and concrete. Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that it has no knowledge that the fill material contained Hazardous Materials when it was placed on the site.
Flint Hills Resources Alaska, LLC stated in the Flint Hills APA that:


Schedule II- Page 7 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




1.
On July 24, 2014 ADEC issued a letter to Flint Hills Resources Alaska, LLC advising that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the July 22, 2014 Anchorage Facility Jet Fuel release.
2.
On April 21, 2014, ADEC issued a letter to Flint Hills Resources Alaska, LLC advising it that Flint Hills Resources Alaska, LLC is a responsible party under Alaska law for the April 20, 2014 gasoline release.
3.
In a letter dated July 22, 2015, ADEC indicated that the Anchorage Terminal Oil Discharge Prevention and Contingency Plan needed the additional information specified in the July 22 letter to be submitted in order for the plan renewal to be approved. On September 2, 2015, the facility submitted the requested information and is awaiting ADEC approval.
Flint Hills Resources Alaska, LLC assumed all environmental liabilities known at the time the Purchased Facilities were acquired from Williams in 2004.
For Martinez Assets Contribution Agreement listed on Schedule VII:

MARTINEZ TANKAGE:

The following pending refinery notices of violation:

1.
Notice issued April 16, 2013 by the Bay Area Air Quality Management District (“ BAAQMD ”) related to liquid discovered on internal floating roof of Tank 870;
2.
Notice issued February 11, 2014 by BAAQMD related to a leaking PV valve on Tract 3 VRS Tank 613; and
3.
Notice issued August 12, 2014 by BAAQMD related to a ½ inch gap at well sliding cover on Tank 692.

Existing soil and groundwater contamination has been identified and is being managed under existing programs and agreements by TRMC and third parties, within three (3) solid waste management units located on Tract 3 of the “Licensed Premises” (as defined in the November 21, 2016 License Agreement between TRMC and the Operating Company)Anacortes, on which the crude oil, feedstock and refined product storage tankage are situated, with such waste management units being identified as areas within red or green boundary lines on the WMU HAZARD MAP-Orientation Unit Or System Overall General Sheets, as reflected on the Golden Eagle Refinery Plat, Drawing Number 020-DA-518-001, as copy of which is shown below.


Schedule II- Page 8 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




EXPNG.JPG
For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:

None. The environmental indemnification provisions in Article VI of the Sponsor Equity Restructuring Agreement dated August 13, 2017 (“SERA”) between Andeavor, Andeavor Logistics LP and Tesoro Logistics GP, LLC supersede in their entirety the environmental indemnification provisions of Article III of the Fourth Amended and Restated Omnibus Agreement, other than Section 3.5(b), and shall be the exclusive provisions for all indemnification obligations relating to the subject matter of the indemnities so provided in Article VI of the SERA.

For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

1.
The transfer piping on the wharf has not been reviewed for risk of surge. In the event of misalignment during cargo operations or accidental valve closure on vessel or shore there is a potential to overpressure the transfer piping. A surge study will be conducted and any required modifications will be undertaken.

2.
There is a seep of oil through the north secondary containment dike for Tanks 6 and 7 and into the adjacent storm water swale. Absorbent booms are placed at intervals in the swale to contain the oil. Any oil that makes its way to the wastewater treatment facility can be

Schedule II- Page 9 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




managed at the flume. Additional information about the seep, as well as investigation efforts to determine the source, was provided in a memo from Pacific Groundwater Group. Investigation efforts have not yet identified the source of the seep. TRMC personnel have reported the seep to the Washington State Department of Ecology Industrial Section.

3.
The tank containment dikes are coated with asphalt and roofing tar and the asphalt coating is deteriorating on many of the dikes, vegetation is encroaching, and some minor sloughing was noted. If not maintained, further erosion may occur to containment dikes and there are potential compliance risk related to 40 CFR 121, SPCC, and WAC 173-180-320. A tank containment dike erosion control program is in place but needs to be accelerated to mitigate erosion issues over next three years.

4.
Certain floating roof deck fittings do not meet the requirements of Refinery MACT Subpart CC for storage tanks. According to TRMC representatives, seals/gaskets need to be replaced on 27 tanks in the Assets covered by the 2017 Anacortes Contribution Agreement.

5.
Per the Consent Decree mentioned in Schedule 1, the Refinery must install closed-purge, closed-loop, or closed-vent samplers at all storage tanks by 2021. According to facility representatives, there are 42 tanks left to retrofit in the Assets covered by the 2017 Anacortes Contribution Agreement.

6.
Several out-of-service assets are included in the drop, including 17 tanks, the asphalt loading rack, pipelines, the red dye shed, and lead shed areas. TRMC has indicated a total of 17 out-of-service tanks (Tanks 34, 46, 47, 48, 55, 62, 88, 89, 90, 95, 98, 99, 110, 147, 159, 232, and 249).

7.
Propane and butane vessels were observed to potentially not have drain-away protection that is sized and configured for one-half the largest vessel. A release should be able to drain away from the vessels to prevent further releases, explosions, and fires.


For 2018 Assets Contribution Agreement listed on Schedule VII:

Defined terms used in this portion of Schedule II without definition will have the meaning given such terms in the 2018 Assets Contribution Agreement.


Schedule II- Page 10 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




LOS ANGELES REFINERY (CARSON AND WILMINGTON UNITS)
1.
On August 22, 1990, the Los Angeles Regional Water Quality Control Board (RWQCB) issued Cleanup and Abatement Order (CAO) No. 90-121 to Tesoro Refining & Marketing Company LLC (TRMC) for the LARC Refinery Unit. The CAO requires investigation and remediation of light non-aqueous phase liquid (LNAPL) on the water table and groundwater containing dissolved-phase petroleum hydrocarbons and methyl tert-butyl ether (MTBE). TRMC operates a LNAPL and groundwater recovery system predominantly along the western boundary of LARC Refinery Unit. LNAPL also is removed from selected wells within the process and tank farm areas via vacuum truck. Other remediation efforts at the LARC Refinery Unit include vapor-phase hydrocarbon extraction from soils and enhancing natural biologic degradation in groundwater. Groundwater and soil remediation and LNAPL removal will be ongoing.

2.
Subsurface environmental investigation at the LARW Refinery Unit began in the early 1980s. These investigations revealed soil and groundwater impacts from dissolved petroleum hydrocarbons, MTBE, tert-butyl alcohol (TBA) and LNAPL. Shell Oil Products US (SOPUS) is responsible for soil and groundwater remediation originating prior to May 2007. SOPUS has recovered LNAPL using a total fluids extraction system and tracked LNAPL recovery rates since 2010. A Remediation Feasibility Study was submitted by SOPUS to the RWQCB in August of 2017. SOPUS presented four "remedy packages" to meet remedy objectives; however, additional data are needed prior to designing a total fluids extraction or dual pump liquid extraction. Releases from TRMC operations have not commingled with impacts attributable to SOPUS.

3.
Groundwater impacts at the LARC Refinery Unit and the LARW Refinery Unit have migrated downward and offsite. SOPUS, TRMC and Kinder Morgan have modeled groundwater flow and continue to document natural biodegradation in the lower aquifers.

4.
On January 4, 2010, TRMC notified the California Emergency Management Agency of a naphtha release from LARW Refinery Unit Tank 80214. The release was initially estimated at 15,200 barrels. The RWQCB issued CAO R4-2011-0037 to TRMC on April 11, 2011. The CAO required the assessment and delineation of soil and groundwater impacts associated with this release. In response, TRMC investigated the Tank 80214 area and constructed a LNAPL and groundwater extraction system, which is under continuous operation. Remedial efforts are on-going, however active pumping is expected to be complete within 10 years.

5.
Underground piping is to be removed/decommissioned under Cleanup Abatement Order (CAO), Los Angeles Plant (File No. 85-20) issued by the California Water Quality Board, Los Angeles Region Order 88-70 was adopted June 27, 1988. Between 2003 and 2017, approximately 89,895 feet of aboveground pipeline was installed and approximately 69,182

Schedule II- Page 11 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




feet of underground pipeline was decommissioned. Additional underground piping must be removed under this program.

MANDAN REFINERY
1.
On October 16, 2018 the North Dakota Department of Health (NDOH) issued a RCRA Hazardous Waste Storage and Treatment and Corrective Action Permit (HW-002) for operations at the Mandan Refinery. The Permit requires the investigation and mitigation of hazardous wastes and hazardous waste constituents released from facility waste management units, including the wastewater collection system below areas of refinery operations and petroleum storage. Mitigation measures include collecting groundwater from down-gradient recovery trenches and monitoring groundwater twice per year. Continued groundwater monitoring, operation of the groundwater trench collection system, and annual reporting to the NDOH is expected to be on-going.

SALT LAKE REFINERY
1.
TRMC operates a remediation system to contain and recover LNAPL and groundwater at the Salt Lake Refinery. This recovery and monitoring system is operated under a Stipulated Consent Order (SCO), dated January 9, 1992, between the Utah Solid and Hazardous Waste Control Board and Amoco Oil Company, the former refinery owner. Under the SCO, Amoco completed a RCRA Facility Investigation and developed a Corrective Action Plan (CAP) that included a groundwater remediation/containment system, tracking of soil impacts and establishing deed restrictions to limits property and groundwater use. The LNAPL extraction system operates primarily along the western boundary of the refinery, including the west side of the storage tank area. Dissolved petroleum hydrocarbons are no longer detected in site groundwater. As a result, TRMC is currently in discussions with the State of Utah Department of Environmental Quality, Division of Waste Management and Remediation Control, to update the SCO and CAP into a Site Management Plan and Environmental Covenant. It is unknown whether the State will agree with TRMC’s proposed and revised technical approach.

2.
Asphalt seeps within the bermed area at Tank 204 can impact operations within the containment area. The Salt Lake Refinery is currently removing residual pockets of asphalt through routine maintenance. The asphalt has not migrated through the containment area. Asphalt seeps are not expected to infiltrate through soils to the water table. Groundwater from monitoring wells located near Tank 204 do not contain dissolved petroleum hydrocarbons or LNAPL.

3.
LNAPL and water have been observed within the secondary containment at Tank 247. The wastewater treatment facility capacity at the Salt Lake Refinery can be overwhelmed following heavy precipitation events. The backup of hydrocarbon containing wastewater

Schedule II- Page 12 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




into the tank berm area reduces the secondary containment capacity and could result (temporarily) in non-compliance with the SPCC requirements. Impacts to groundwater and soil from pooled wastewater and LNAPL are unknown and could require additional remediation.

4.
Laboratory instruments containing free-phase mercury were once used within the Bulk Loading Rack (BLR) Control Building. Impacts from this practice were discovered on December 1, 2014. The free phase mercury in soil was remediated in the immediate area of the BLR, and interior floors were cleaned and sealed. Mercury remains in the shallow soil surrounding the north side of the BLR Control Building; however institutional controls – including an asphalt cap - are in place to prevent earthwork or disturbing the area without approval and permitting. Post-remediation indoor air sampling demonstrated that the BLR Control Building is suitable for worker occupancy.

JAL NGL STORAGE FACILITY
1.
The facility records at the JAL NGL Storage Facility include the following information regarding releases, impacts or potential impacts:
a)
A former compressor unit leaked an unknown quantity of oil containing poly-chlorinated biphenyls (PCBs).
b)
The southwest corner of the property is used for construction debris, out of service equipment, transformers and storage of other discarded materials. Contaminated soil also is placed in this area.
c)
Groundwater is impacted by former operation of brine ponds. Kinder Morgan is responsible for these groundwater impacts.
d)
Wastes, including water, solids, and lubricating oils, were previously disposed in an on-site injection well.

WINGATE TERMINAL
1.
In 2015, the New Mexico Oil Conservation Division issued Abatement Plan AP-121 to Western Refining. Site groundwater impacts will be addressed after the facility is closed or if contamination migrates off-site. Until closure of the facility’s active operations, the AP-121 requires monitoring eight wells and submitting a report each year. Groundwater monitoring and annual reporting is expected to be on-going.

2.
Asbestos is present at the Wingate Terminal, including buildings that are cladded in transite and pipes insulated with asbestos wrap. Currently, asbestos is kept sealed and managed in place.


Schedule II- Page 13 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




3.
Two burn pits were used before the existing flare system was constructed. Flare pits may be a source of surface and subsurface soil impacts.

STATELINE NM TERMINAL
1.
A sump was reportedly overfilled on March 8, 2018 due to a power outage. This caused a release of 24.4 bbl of crude oil, which flowed across the terminal property and to adjacent undeveloped ranch land. Remedial actions are in process.




Schedule II- Page 14 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule III

Pending Litigation

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

None.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII:

None.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII:

None.

For West Coast Assets Contribution Agreement listed on Schedule VII:

None.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: None.

ANCHORAGE AND FAIRBANKS TERMINALS: None.

For Martinez Assets Contribution Agreement listed on Schedule VII:

None.

Schedule III- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:
The Additional Indemnification provisions in Article VI of SERA supersede in their entirety the indemnification provisions of Section 3.5(a) of the Fourth Amended and Restated Omnibus Agreement, and shall be the exclusive provisions for all indemnification obligations relating to the subject matter of the indemnities so provided in of Section 3.5(a) of the Fourth Amended and Restated Omnibus Agreement.


For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

None

For 2018 Assets Contribution Agreement listed on Schedule VII:

1.
Great Northern Gathering & Marketing LLC vs. Mountain Peak Builders, LLC , Case No. 27-2015-CV-00222, District Court, McKenzie County, North Dakota; Mountain Peak Builders, LLC vs. Great Northern Gathering & Marketing LLC , Case No. 4:15-cv-034, the United States District Court of North Dakota; Cross-Country Pipeline Supply Co., Inc. v. Great Northern Gathering & Marketing LLC and Great Northern Midstream LLC , Civil Case No. 27-2017-CV-00305, in the District Court, McKenzie County, North Dakota. Three related suits regarding construction liens on certain Tesoro Great Plains Midstream LLC assets in North Dakota relating to work for the prior owner (all fully indemnified and being defended by third party/seller - secured by escrow).

2.
Efrain Onsurez v Rangeland Energy - Litigation in which plaintiff claims that Rio Pipeline (fka Rangeland) drivers are trespassing on his land and related grievances. Affects Rio Pipeline assets in Texas and New Mexico.

3.
Other litigation scheduled on Schedule I (Environmental Litigation).

4.
The following HR lawsuits and pending administrative claims:

(a)     Lawsuits:
Wuestenfeld v. Rangeland – Former contractor at Rio Pipeline (fka Rangeland) (Midland Terminal) alleges sex harassment and retaliation.
LAR :
Valliere/Bonner v. TRMC - Class action lawsuit alleging failure to provide compliant rest periods and associated Labor Code violations.
Kairn v. TRMC - Two lawsuits, one in state court and one in federal court. Kairn alleges gender discrimination in the state court case, which is scheduled to go to trial

Schedule III- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




in November 2018. The federal court case alleging gender discrimination and retaliation is stayed.
Tate vs. Tesoro Corp - Complaint names Tesoro Corporation on a joint employment theory and the putative class is defined as including a subclass of Brinderson class members who worked at a refinery owned by Tesoro in California (which would cover the LARW Refinery Unit and the LARC Refinery Unit). Tesoro is indemnified by Brinderson.

(b)     Administrative Charges :
Mandan Refinery :
Sprague - former contractor alleges he was discriminated against due to his disability.
Salt Lake Refinery :
McArthur - former SLC refinery employee alleges sexual harassment, age discrimination, and retaliation.
LARC/LARW Refinery Units :
Davis - Employee alleges that he was not offered a pipefitter position due to discrimination based on race.
McGhee - Employee alleges he was terminated due to his disability.
Wanis - Employee alleges his termination was discriminatory on the basis of race, ancestry, national origin and religion.













Schedule III- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule IV

Section 4.1(a): General and Administrative Services

(1)
Executive management services of Andeavor employees who devote less than 50% of their business time to the business and affairs of the Partnership, including stock based compensation expense

(2)
Financial and administrative services (including, but not limited to, treasury and accounting)

(3)
Information technology services

(4)
Legal services

(5)
Health, safety and environmental services

(6)
Human resources services
 

Section 4.1(c)(vii): Other Reimbursable Expenses

For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :

None.

For Long Beach Contribution Agreement listed on Schedule VII :

None.

For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

None.

For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

None.


Schedule IV- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




For West Coast Assets Contribution Agreement listed on Schedule VII:

None.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

None.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE: None.

ANCHORAGE AND FAIRBANKS TERMINALS: None.

For Martinez Assets Contribution Agreement listed on Schedule VII:

None.

For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:

None

For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

None

For 2018 Assets Contribution Agreement listed on Schedule VII:

None



Schedule IV- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule V
ROFO Assets
Asset
 
Owner
 
 
 
Nikiski Dock and Storage Facility (Nikiski, Alaska)  
A single-berth dock and storage facility located at the Kenai Refinery that includes five crude oil storage tanks with a combined capacity of approximately 930,000 barrels, ballast water treatment capability and associated pipelines, pumps and metering stations. The dock and storage facility receives crude oil from marine tankers and from local production fields via pipeline and truck, and also delivers refined products from the refinery to marine vessels.
 
Tesoro Alaska
 
 
 
 
 
 
 
 
 
 
 
 



Schedule V- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule VI
Existing Capital and Expense Projects
For Initial Contribution Agreement listed on Schedule VII :

Expense Projects

None.

Capital Projects

1.     That certain project related to AFE # 102120001, which provides for side stream ethanol blending into all gasoline at the Salt Lake City terminal by adding truck ethanol unloading capability, utilizing the existing premium day tank for ethanol and delivering premium direct from the Salt Lake City refinery tankage. New ethanol truck unloading facilities will be installed. New Pumps will also be installed for delivering higher volumes of premium gasoline from the Salt Lake City refinery to the Salt Lake City terminal. An ethanol injection skid will be installed along with piping changing to the existing Salt Lake City terminal to allow the ethanol to be injected in the gasoline stream. This project has been completed.

2.     That certain project AFE# 112120005 at the Mandan refinery, to update additive equipment to allow the offering of Shell additized gasoline. This project has been completed.
3.     That certain project related to AFE # 107120005, which provides for ratio ethanol blending into gasoline on the rack at the Burley, Idaho Terminal by adding truck ethanol unloading capability, adding tankage for ethanol storage and installing new ethanol meters associated with each gasoline loading arm. New ethanol truck unloading facilities will also be installed.
4.     That certain project AFE# 104100015-M at the Mandan refinery, to update the truck rack sprinkler system. This project has been completed.
5.     That certain project number AFE# 122120002 (TCM Idea# 2010113017) at the Mandan refinery, to upgrade the rack blending hydraulic system to reduce/eliminate inaccurate blends at the load rack.
6.     That certain project number TCM Idea # 2011433001 at the Mandan refinery, to move the JP8 to new bay and have three bays for loading product across the rack. This project has been cancelled.
7.     That certain project number TCM Idea # 2011432602 at the Stockton terminal, install a continuous vapor emission monitor on the vapor recovery unit for compliance with air quality regulations.

Schedule VI- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




For Amorco Contribution Agreement listed on Schedule VII :
Expense Projects

All major expense projects that are within the scope of open Work Orders as of the applicable Closing Date.

Capital Projects

1.     That certain project related to AFE# 097100014 and AFE# 107100014 at the Amorco terminal, which provide repairs and upgrades to the wharf regarding MOTEMS standards.

2.     That certain project related to AFE# 112100001 at the Amorco terminal, which installs a jet mixer system for crude lab testing.

For Long Beach Contribution Agreement listed on Schedule VII :

Expense Projects

1.    Any cost that may be incurred to adjust diesel fuel tank vents near light fixtures after a review is conducted and if action is deemed necessary.

2.     Costs related to substantial repair or replacement project scheduled for 2012 and 2013 for the pipeline segments in the portion of the Southern California Edison right-of-way area immediately adjacent to the marine terminal to address corrosion, and include IO# 3021407 titled “SCA Wilmington Edison Reroute” and IO# 3021749 titled “SCA. Edison Reroute 24 inch, 16 inch, 14 inch”.

Capital Projects

1.     That certain project related to AFE# 072104079LBT titled “UG Piping – LBT” related to underground pipeline repairs at the Terminal. In addition, any subsequent new projects to address the same specific under-ground piping issues per AFE# 072104079LBT (i.e. a second phase UG Piping project) that would occur on or before the end of year 2015.

2.      That certain project related to the TCM Idea# 2012433432 AFE# 125120020 titled “LBT Berth 84a Loading Arm Replacement” which repairs or replaces the loading arms at the Terminal and any related AFE project that will occur upon final project approval to substantially repair or replace the loading arms at the Terminal.

3.    That certain project related to the TCM Idea# 2012433433 AFE# 125120021 titled “LBT Berth 86 Loading Arm Replacement” which repairs or replaces the loading arms at the Terminal and any related AFE project that will occur upon final project approval to substantially repair or replace the loading arms at the Terminal.


Schedule VI- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




4.     Any remaining costs of those certain projects related to the leak detection on the Terminal and Terminal Pipelines which are substantially complete and include AFE# 107110002, AFE# 117110001, AFE# 117110003, AFE# 117110002, and AFE# 125120002.
For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

Expense Projects
None.
Capital Projects
Any capital costs or expenses that may be incurred for the installation of a custody transfer meter related to the AFE# 125120017 titled “CROF Custody Transfer Meter and Station”.
For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :
Expense Projects
Expenses associated with the API 653 internal inspection, the Carson Crude Terminal Tank 401 (AFE# 13E1219120001BP/WBS 19125.E012.975) scheduled to start in November 2013, including without limitation, cleaning of such Tank (including any waste removal) and any repairs to such Tank required as a result of such inspection.
Capital Projects
None.
For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :
Expense Projects
1.    All 2013 and 2014 costs related to AFE# 136104215BP-M (PRISM ID 32503) for a partial replacement of Rhodia Sulfuric Acid Line 29 will be reimbursed by TRMC to cover the 2014 expenditure of $1.1 million for line neutralization, the pig run and tie-ins. Subject to confirmation with the refinery on exact outage dates, the bulk of this cost will be incurred in March and April.
2.    All 2013 costs or 2013 carry-over costs related to AFE# 13E1012000002BP-M12 & 13E1012000002BP-M5 PRISM ID 32518 (under the 2013 AFE # 13E1012000002BP) for the Manual Entry Corrosion Program at Terminal 2 will be reimbursed by TRMC. All 2014 costs will be covered by the Partnership’s 2013 budget.

Schedule VI- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





3.    All remaining 2013 inspection and repair costs related to AFE# 13E1012000002BP-M2 (PRISM ID 32549) associated with the Marine Terminal 2 – TK 218 – API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
4.    All remaining 2013 inspection and repair costs related to AFE# 13E1212000001-M (PRISM ID 31418) associated with the Marine Terminal 2 – TK 205 – API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
5.    Remaining expenses related to AFE# 13E1179000001-M (PRISM ID 32040) to upgrade PLC systems in the LA Basin will be reimbursed by TRMC.
6.    All remaining 2013 inspection and repair costs related to AFE# 13E1212000002-M (PRISM ID 31419) associated with the Marine Terminal 2 – TK 217 – API 653 Internal Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
7.    All remaining expenses related to AFE# 136104222BP-M (PRISM ID 32556) associated with the Pipeline OQ Verification will be reimbursed by TRMC.
8.    All remaining 2013 inspection and repair costs related to AFE# 13E1012000006-M (PRISM ID 31409) associated with the Carson Products – TK VH1 – API 653 Inspection only (not including repairs at this point) will be reimbursed by TRMC. TRMC shall review and approve the tank repair scope and review inspection reports to prevent unnecessary upgrades or “urban renewal.”
 
Capital Projects

1.     Maintenance capital expenditures related to that certain AFE# 136104194BP-M (PRISM ID 32480) at Terminal 2 to replace all fire water piping at Berths 76, 77 and 78 areas of Terminal 2 in Long Beach, CA with new piping. This project will also replace all associated valves, fixtures, monitors, and fire-fighting accessories.
2.    Maintenance capital expenditures related to that certain TCM Idea# 2013434229 (PRISM ID 25829) at Terminal 2 to replace the existing bladder type foam tank with two atmospheric tanks and foam skids located at either end of the facility along with new piping to support the installation.

Schedule VI- Page 4 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




3.    Maintenance capital expenditures related to that certain TCM Idea# 2013434243 (PRISM ID 20054) at Terminal 2 to replace the existing loading arms at T2's Berth 77 and 78. The current parts are so old that they are no longer readily available, so in order to properly maintain this equipment to minimize down-time for repairs, these arms should be replaced with the newest models.
4.    All capital expenditures related to that certain AFE# 136104077BP-M (PRISM ID 32481) for MOTEMS dock side piping upgrades at Terminal 2.
5.    Maintenance capital expenditures related to that certain AFE# 145120008 (PRISM ID 32560) at Terminal 2 to replace the main 12kV electrical switchgear that experienced electrical damage due to several factors: nearing its equipment service life, component degradation, exposure to the elements. The main copper busbar component of the switchgear was recently replaced and dipped in epoxy coating. However, during the repairs, cracks on the insulation of the main horizontal operating bus were discovered. The exterior enclosure is slowly showing signs of corrosion and the glastic insulation materials are degrading.
6.    Upon TRMC’s approval to complete the following projects, all capital costs incurred to connect the Los Angeles Wilmington and Carson refinery systems, as well as the crude and product pipeline systems: TCM Idea# 2013434786, AFE# 132110022-M (TCM Idea# 2013434419), TCM Idea# 2013434788, AFE# 132110023-M (TCM Idea# 2013434417), AFE# 132110025-M (TCM Idea# 2013434418), AFE# 132110030-M (TCM Idea# 2013434420), AFE# 132110031-M (TCM Idea# 2013434784), TCM Idea# 2013434785 and AFE# 132110026 (TCM Idea# 2013434137).
7.    Upon TRMC’s approval to complete the project, all capital costs related to the project at Terminal 2 targeted to reduce Andeavor’s demurrage cost due to barge delivered additive alternative, under AFE# 132110024-M (TCM Idea# 2013434220).
8.    All capital costs related to AFE# 131907046, the implementation of an equivalent solution using Andeavor ECC 6 MOC module, including necessary configuration changes and customization of interfaces to be completed and executed in line with other transformation projects identified as part of integrating other BP assets such as TMS5 to DTN Guardian3, Load Tracker, etc. in the Logistics area.
9.    All capital costs related to AFE# 131907047. As a part of the BP Carson Tranche 1 Contribution Agreement, Andeavor acquired Maximo, i-Maintain, Maximo Mobile and Primavera. These applications are used for scheduling and managing routine maintenance tasks and planning capital projects (Primavera). These business functions will be transitioned to SAP PM (using GWOS) and a TSO instance of Primavera. This initiative should be performed in line with Maximo to SAP PM transformation project and with other logistics and refining projects.

Schedule VI- Page 5 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




10.    All capital costs related to AFE# 131907045. This project, in conjunction with Andeavor's acquisition of the BP Carson City Refinery, is designed to transition and successfully integrate the Southwest's Logistics Mechanical Integrity Inspection System Information Technology assets into the Andeavor Information Technology application landscape.
For West Coast Assets Contribution Agreement listed on Schedule VII:
Expense Projects
1.     Nikiski Terminal . Tesoro Alaska shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to reinstate water supply to the Operating Company’s Nikiski Terminal in connection with the water suppression system.

2.     Anacortes Light Ends Rail Facility. TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:
to determine the adequacy of fire water at the facility;
with respect to any modifications needed to be made to fire water system to provide adequate fire water; and
for relocation of the knockout drum, if relocation is required.

3.     Anacortes Storage Facility

TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore Tank 135 to API 653 specifications. TRMC shall be deemed to be the generator of all hazardous waste and other waste removed from Tank 135 in connection with such cleaning and restoration and shall be responsible for all obligations arising as the generator of such hazardous waste and other waste.

TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group for decommissioning and repair of sewer lines for Tanks 165 and 166.

4.     Martinez Light Ends Rail Facility . TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:

o      to determine the adequacy of fire water at the facility; and
o      with respect to any modifications needed to be made to fire water system to provide adequate fire water.

5.     Martinez Clean Products Truck Rack . TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group:


Schedule VI- Page 6 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




o      if required to supplement data currently available in the baseline inspections records in order to properly document corrosion, to carry out new tank corrosion inspections on Tanks 777, 778 and 890, as well as any repairs resulting from such inspections to meet API 653 standards; and
o      with respect to Tank 777, the tank berm size and tank proximity evaluation scheduled to completed by year-end 2014, as well as any required adjustments resulting therefrom.

6.     Martinez Light Ends Storage . If required to supplement data currently available in the baseline inspection records in order to properly document pipe integrity, TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group for inspections and analyses conducted to confirm baseline pipe integrity by year-end 2014, as well as any repairs arising from defects identified through such inspections.

7.     Tesoro Alaska Pipeline

Andeavor shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to carry out the repairs and tests identified in the Coffman Engineers report dated May 8, 2014, including the planned hydro-test in 2015 and any resulting repairs therefrom.

Andeavor shall reimburse the Partnership Group for any costs or expenses incurred by the Partnership Group to carry out repairs identified pursuant to the inspection on the Tesoro Alaska Pipeline as a result of the inspection scheduled to begin June 30, 2014.

Capital Projects
Martinez Capital Projects

1.    All capital costs related to AFE# 127100012 - Design, procure, and install Biodiesel Blending Facility at existing Martinez Tract 3 Truck Loading Rack.
2.    All capital costs related to AFE# 132100017 – Martinez gasoline loading rack filtration.
3.    All capital costs related to AFE# TBD regarding Fall Protection for Top Loading Tank Cars and Trucks.
4.    All capital costs related to AFE# 132100017 regarding the installation of a new Tract 3 Gasoline Loading Rack Filtration System to replace the existing rental units.
5.    All capital costs related to AFE# PTS 12475 regarding LPG Tank Car Loading Rack Improvements.

Schedule VI- Page 7 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




6.    All capital costs related to AFE# TBD regarding the installation of a system to add ExxonMobil additives to gasoline at the Tr. 3 truck loading rack.
7.    All capital costs related to AFE# 145110009 regarding the implementation of Tesoro Alaska Pipeline mainline delivery strainer.

Alaska Capital Projects
1.    All capital costs related to AFE# 125100055 - Additive reservoir tank and pumping system for the Nikiski Terminal truck loading rack.
2.    All capital costs related to AFE# 125110005 - Fabrication and installation of a skid-mounted clay treatment system at the Tesoro Alaska Pipeline Port of Anchorage delivery facility.
3.    All capital costs related to AFE# 125110007 – Provision of inline strainers upstream of the Kenai Pump station pipeline pumps and upstream of the Anchorage receiving station control valve.
4.    All capital costs related to AFE# 124100034 - Purchase and installation of (5) IP CCTV Cameras, and security video monitoring station for Tesoro Alaska Pipeline Anchorage control room (located at the Port of Anchorage Industrial Park), MLV 7 on Northern Lights Blvd, and the ASIG Filter Building located at Ted Stevens International Airport.
5.    All capital costs related to AFE# 145110002 regarding the installation of semi-deep cathodic protection wells, a new rectifier and electrical service at the Tesoro Alaska Pipeline.
6.    All capital costs related to AFE# 124100030 regarding new CCTV monitoring system at the Nikiski Terminal.
7.    All capital costs related to AFE# 145120005 regarding a new cathodic protection anode bed and rectifier for the Nikiski Terminal.
 

Schedule VI- Page 8 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

Capital Projects
TRMC shall reimburse the Partnership Group for:
1.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following piping systems projects: AFE# 136104160BP (TCM Idea# 2013218160), TCM Idea# 2013212538, TCM idea# 2013212540 and TCM Idea# 2013212539. For any such projects listed above in this section 1 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

2.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following instrumentation and control projects: AFE# 154100014 (TCM Idea# 2014217001), TCM Idea #2014217008, AFE# 136104169BP (TCM Idea# 2013218169), AFE# 136104190BP (TCM Idea# 2013218190), TCM Idea# 2013212558, and TCM Idea # 2014217023. For any such projects listed above in this section 2 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following tank improvements: TCM Idea# 2014217135 (tk 56), TCM Idea# 2013212585 (tk 1), TCM Idea# 2014217132 (tk 90), TCM Idea# 2014217133 (tk 11), TCM Idea# 2013212575 (tk 34), TCM Idea # 2013212587 (tk 35), TCM Idea# 2013212588 (tk 10), TCM Idea# 2013212589 (tk 58), TCM Idea# 2013212592 (tk 39), TCM Idea# 2013212593 (tk 968), TCM Idea# 2013212595 (tk 60), TCM Idea# 2013212596 (tk 69), TCM Idea # 2013212597 (tk 57), TCM Idea# 2013212599 (tk 51). For any such projects listed above in this section 3 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

4.      All capital costs related to the repair or replacement of brick structure piping supports, with the scope of repairs to be developed in 2016 and the execution of such repairs to be completed in 2017.

5.      All capital costs related to the upgrade or replacement of the cathodic protection system for the tanks as identified through a cathodic protection assessment to be completed prior to year end 2016. An action plan will be developed to address recommendations identified through the assessment. The program is expected to commence in 2016 and will be executed over a 4-year period.


Schedule VI- Page 9 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




6.      All capital costs related to the multi-phase upgrade or replacement of tank level measurement and transmitter instruments, upon mutual consent of TRMC and the Partnership of the scope for the multi-year project.  Notwithstanding the foregoing, the Partnership in its sole discretion shall determine the final scope of any element of the tank level instrument upgrade project required to maintain safe operation of the Assets. TRMC’s reimbursement to the Partnership Group for capital costs incurred during the Term to complete the tank level instrument upgrade or replacement project shall not exceed $15,000,000 in the aggregate.  

Expense Projects

1.      With respect to the Remaining Pipeline 88 Interest (as defined in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII), TRMC shall reimburse the Partnership for any costs and expenses associated with curing any anomalies identified by the August 2015 in-line inspection thereof.

2.      With respect to the Tankage (as defined in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII), as well as the land on which such Tankage is located, TRMC shall reimburse the Partnership for any costs and expenses associated with any liabilities, costs and expenses that might be imposed upon the Partnership as operator of the Tankage and which relate to the environmental condition of the land on which the Tankage is located and surrounding lands, including but not limited to any government-imposed fines or remediation costs and natural resource damages, but excluding (i) any liabilities, costs and expenses that arise from any releases or discharges of hydrocarbons or other substances from the Tankage after the date hereof or (ii) any liabilities, costs and expenses that arise from negligent acts or omissions or willful misconduct of the Partnership and its agents, contractors and representatives.

3.      Until the later of (i) November 12, 2020 or (ii) the completion of any repairs identified by any applicable non-invasive or external inspections that occurred prior to such date, TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore any tank included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII to API 653 or API 510 specifications that are identified through the Partnership Group’s non-invasive or external inspections.

4.      During the term (including any extension thereof) of the Carson II Storage Services Agreement, dated as of November 12, 2015, by and among TRMC, the General Partner, the Partnership and the Operating Company (the “Carson II Storage Agreement”), TRMC shall reimburse the Partnership Group for any costs and expenses incurred by the Partnership Group to restore any tank included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII to API 653 or API 510 specifications, as determined by the results of the first scheduled internal inspection of any such tank after the date hereof (the “First Internal Inspection”). TRMC shall be deemed to be the generator of all hazardous waste and other waste

Schedule VI- Page 10 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




removed from any such tanks in connection with such cleaning and restoration and shall be responsible for all obligations arising as the generator of such hazardous waste and other waste.

a)
TRMC and the Operating Company shall mutually agree on the inspection schedule and the duration of such inspections so as to minimize disruption within the Wilmington and Carson refinery systems, with TRMC having the right to approve the final inspection schedule.

b)
If TRMC fails to renew the Carson II Storage Services Agreement, prior to November 12, 2022, in accordance with the terms thereof, the Partnership Group may elect to accelerate API 653 or API 510 inspections prior to the expiration of the Carson II Storage Agreement.

5.      Notwithstanding Sections 3 and 4 above, the parties agree that the following tanks included in the 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 24 months prior to the date of that Contribution Agreement, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of TRMC:


Schedule VI- Page 11 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Tank Number
Year of Last Inspection
53
2013
87
2013
41
2013
4
2013
88
2013
5
2013
24
2013
325
2013
326
2013
45
2014
65
2014
89
2014
276
2014
289
2014
303
2014
340
2014
50
2014
302
2014
138
2014
139
2014
289
2015
65
2015
969
2015
40
2015
955
2015
194
2015


For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

KENAI TANKAGE:

Capital Projects
TAC shall reimburse the Partnership Group for:
1.
Upon mutual consent on project scope between TAC and the Partnership, TAC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following instrumentation and control projects: AFE# 2012217023 (TCM Idea# 137100002), TCM Idea# 2014216018, TCM Idea# 2007002425. For any such projects listed above in this section 1 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.


Schedule VI- Page 12 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




2.
All capital costs related to the assessment and upgrade or replacement of tank level measurement and transmitter instruments, upon mutual consent of TAC and the Partnership of the scope for the multi-year project. Notwithstanding the foregoing, the Partnership in its sole discretion shall determine the final scope of any element of the tank level instrument upgrade project required to maintain safe operation of the Assets.

3.
All capital costs related to installation of tank liners during first API 653 inspection cycle to bring each tank into conformance with Alaska Department of Environmental Conversation standards.

4.
All capital costs related to the assessment and necessary upgrades of cathodic protection system including:

Additional anode ground beds
Additional surface distributed anodes
Additional amperes of cathodic protection for on-grade storage tanks
Under tank monitoring systems

The program is expected to commence in 2016 and will be executed over a 3-year period.

5.
All capital costs related to internal inspection, assessment and repair of Tank 11 internal floating roof.


Expense Projects
1.
The parties agree that Tank 37 included in the Alaska Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 24 months prior to the date hereof, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of TAC.

2.
Any costs or expenses related to:

Completion of pressure relief documentation, expected to be complete by year-end 2016.
Completion of area classification plans per NEC 500.4, expected to be complete by year-end 2017.


ANCHORAGE AND FAIRBANKS TERMINALS:

Capital Projects

Schedule VI- Page 13 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




TAC shall reimburse the Partnership Group for:
1.
All capital costs related to:

a)
Anchorage Terminal
Installation of permanent fire water pipeline supports with proper coating; expected to be complete by year-end 2017.
Assessment, evaluation and potential replacement of two deep anode ground beds (No. 2 and No. 5); expected to be completed within cathodic protection program by year-end 2018.
Installation of third tank floor on Tank 4236 with either new cathodic protection system or an El Segundo system; expected to be complete by year-end 2020.
Assessment and upgrades to add access platforms and roof protection to east side filter vessels; expected to be complete by year-end 2017.

b)
Fairbanks Terminal
Assessment, evaluation and potential replacement of two deep anode ground beds and installation of two new rectifiers to allow ground beds to be operated independently; expected to be completed within cathodic protection program by year-end 2018.

Expense Projects
1.
Any costs or expenses related to:

a.
Anchorage Terminal
Inspection and assessment of buried product pipeline; expected to be complete by year-end 2017.
Assessment of manual operation of rail car sump tankage; expected to be complete by year-end 2017.

b.
Fairbanks Terminal – Any costs or expenses related to:
Arc flash assessment; expected to be complete by year-end 2017.
Relief valve sizing and selection assessment; expected to be complete by year-end 2017.
For Martinez Assets Contribution Agreement listed on Schedule VII:

Capital Projects
TRMC shall reimburse the Partnership Group for:
1.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following secondary containment projects identified for Tract 3 and Tract 6: AFE# 127100010 (TCM Idea# 2007000713), TCM Idea# 2012211027. In addition, TRMC shall reimburse the

Schedule VI- Page 14 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Partnership for any additional capital costs or expenses that are associated with the regulatory mandated validation of secondary containment volumes for the Spill Prevention Controls and Countermeasures Plan. For any such projects listed above in this section 1 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

2.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following tank repairs, improvements and new build projects: AFE# 152100015 (TCM Idea# 2007000694), TCM Idea# 2007000701, TCM Idea# 2009001043, TCM Idea# 2012211055, TCM Idea# 2012211056, TCM Idea# 2012211080, TCM Idea# 2012211082, TCM Idea# 2013211049, TCM Idea# 2013211073, TCM Idea# 2014211011, TCM Idea# 2014211038, TCM Idea# 2014211040. For any such projects listed above in this section 2 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the Avon Warf Upgrade project (MOTEMS), AFE# 077100030 (TCM Idea# 2007001314), and the Avon Wharf Pipeline Surge Protection project, AFE # 154100001 (TCM Idea # 2012211075). In addition, TRMC shall reimburse the Partnership for any additional capital costs or expenses that are determined to be required to bring the Avon Wharf into compliance with MOTEMS at the time of the commencement of service of the replacement Wharf, but not for future MOTEMS that may be imposed after the replacement Wharf is approved and permitted for operation. For any such projects listed above in this section 3 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

4.      Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following miscellaneous projects: TCM Idea# 2007001600, TCM Idea# 2014211008. For any such projects listed above in this section 4 that are required to maintain safe operation of the Assets, the Partnership shall determine the final project scope in its sole discretion.

5.      All capital costs related to the replacement and associated initial permitting requirements of the Marine Vapor Control System.

6.      All capital costs related to the upgrade or replacement of the cathodic protection system for the tanks as identified through a cathodic protection assessment. An action plan will be developed to address recommendations identified through the assessment. The program is expected to commence in 2017 and will be executed over a 4-year period.


Schedule VI- Page 15 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




7.      All capital costs and expenses that may be associated with the Asset Retirement Obligations with respect to the existing Avon Wharf and its berths (but not including any future costs of demolition and retirement of the structures on the replacement Wharf now being constructed).

8.      All capital costs and expenses that may be associated with the removal of abandoned pipelines in the Licensed Premises, but only to the extent that such abandoned pipelines have never been used to provide services under the Martinez Storage Services Agreement and such pipelines are then required to be removed pursuant to applicable law, regulation or governmental order.

9.      All capital costs and expenses related to the Getty pipeline thermal expansion assessment and potential relocation of the pipeline above ground, per refinery inspection recommendation.

10.      All capital costs and expenses related to the assessment and potential repairs to underground storm water piping.

Expense Projects

1.      The parties agree that the following tanks included in the Martinez Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 24 months prior to the date of that Contribution Agreement, or the next scheduled tank inspection falls beyond the year 2036, and such tanks are excluded from the reimbursement requirements listed in Section 5.1(a) of this Agreement, unless such actions fail to meet such compliance standards due to the negligence of TRMC.

Tank Number
26
258
517
601
612
641
690
701
702
709
710
711



Schedule VI- Page 16 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




For Assets owned by Western Refining, Inc. and Western Refining Logistics LP and their subsidiaries prior to the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:
None, except as provided under the SERA, which and shall be the exclusive provisions for all such matters provided in the SERA.



Schedule VI- Page 17 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

Capital Projects
TRMC shall reimburse the Partnership Group for:
1.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following gasoline blending unit projects identified: TCM Idea# 2017211656, TCM Idea# 2016215025, TCM Idea# 2014215018, and TCM Idea# 2012215056. For any such projects listed above in this section 1 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

2.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following tank repairs, improvements and new build projects: TCM Idea# 2015215024, TCM Idea# 2015215023, TCM Idea# 2015215020, TCM Idea# 2015215022, TCM Idea# 2015215006, TCM Idea# 2016215005, TCM Idea# 2015215008, AFE# DTKRS.0600.2017.03 (TCM Idea# 2015215017), AFE# DTKRS.0600.2017.02 (TCM Idea# 2015215018), AFE# DTKRS.0600.2017.01 (TCM Idea# 2015215010), TCM Idea# 2015215019, TCM Idea# 2015215015, TCM Idea# 2015215012, TCM Idea# 2015215026, TCM Idea# 2009005038, AFE# DTKRS.0600.2016.03 (TCM Idea# 2011215042), AFE# DTKRS.0600.2016.05 (TCM Idea# 2009005041). For any such projects listed above in this section 2 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the tank improvement program listed under AFE# 164100007 (TCM Idea# 2015215004). The Partnership, in its sole discretion, shall determine the final scope of the project listed above in this section 3, if required to maintain safe operation and compliance of the Assets.

4.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following manifest rail unloading project identified: TCM Idea# 2016215023. The Partnership, in its sole discretion, shall determine the final scope of the project listed above in this section 4, if required to maintain safe operation and compliance of the Assets.

Schedule VI- Page 18 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





5.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all capital costs incurred for the execution of the following miscellaneous projects identified: AFE# 172100068 (TCM Idea# 2017211658), AFE# 162100077 (TCM Idea# 2016215022), TCM Idea# 2013215028, AFE#172100086 (TCM Idea# 2014215009). For any such projects listed above in this section 5 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

6.
All capital costs related to the installation of closed-purge, closed-loop, or closed-vent samplers at all storage tanks by 2021 (per the Consent Decree mentioned in Schedule 1). According to TRMC representatives, as recorded in section 2.2.4 of ERM’s Due Diligence Summary Report (October 2017), there are 42 tanks left to retrofit in the Assets covered by the 2017 Anacortes Contribution Agreement.

Expense and/or Capital Projects

1.
The parties agree that the following tanks included in the 2017 Anacortes Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 36 months prior to the date hereof and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of TRMC.


Schedule VI- Page 19 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Tank Number
TK001
TK019
TK024
TK025
TK026
TK028
TK060
TK091
TK092
TK134
TK248
TK156
TK158
TK180
TK241 A
TK241 B

2.
Upon mutual consent on project scope between TRMC and the Partnership, TRMC shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following miscellaneous projects identified in the tables below.

Tank Farm Projects
IEA) - Replace aging power poles in Tank Farm
IEA) - Upgrade Switch Racks
IEA) - Tank Farm Conduit
IEA) - Replace MOV's in the tank farm
IEA) - Replace Coggins Conduit and wire
IEA) - Tank Farm Grounding
IEA) - Install electric heat tracing
PIPE) - Upgrade steam piping in tank farm
REF) - Sample station compliance
IEA) - Skim oil sump level controller to P-709
INSP) - Required inspection work on V-801
INSP) - Required inspection work on TK-38
REF) - Purchase tank 8 heater
TKWK) - Roof Drains, Seal Failures
IEA) - Back pressure regulator for C4 to storage
INSP) - Offsite/Rack Piping RBMI Implementation – Field

Marine Terminal Projects

Schedule VI- Page 20 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




REF) - Contingency boom replacement
IEA) - Causeway Conduit
PPXX) - Abrasive Blast and recoat wharf lines and remove asbestos conduit
REF) - Rebuild bumpers to be prioritized by operations
WINP) - Install stairway to access spill boats

Rail Projects
RAIL) - Rail Maintenance & Inspection
Rail) - Rail Track Repair

Note, the above projects in this section 2 are characterized by Program and Technical ID or Work Note shown in the Major Special Maintenance (MSM) budget of the Andeavor Anacortes Refinery. For any such projects listed above in this section 2 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.

3.
All additional operating expenses associated with accelerating the tank containment dike erosion control program, for the mitigation of erosion issues, over the next five years. This issue is recorded in section 2.2.2 of ERM’s Due Diligence Summary Report (October 2017) as well as section 3.2.1 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

4.
All costs related to the installation of independent high-high level switches, consistent with the established tank inspection and repair program. This issue is recorded in section 3.2.1 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

5.
All costs for any future modifications required to comply with Andeavor “Tank & Loading Rack” fire protection standard CPER-004 currently under review. This issue is recorded in section 3.4.11 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

6.
All costs for implementing a surge study for the wharf transfer piping and for any required modifications discovered as a result of this study. This issue is recorded in sections 2.2.1 and 6.2.1 of ERM’s Due Diligence Summary Report (October 2017).

7.
All costs for implementing a study of the dike arrangement to the north and east sides of Tank 38, which may not adequately direct contents to the remote containment area in the event of a vessel failure, and for any required modifications discovered as a result of this study. This issue is recorded in section 3.2.2 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

Schedule VI- Page 21 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





8.
All costs for potential future expenses of investigation and mitigation work related to seep of oil through the north secondary containment dike for tanks 6 and 7. This issue is recorded in sections 6.1.1 and 6.2.3 of ERM’s Due Diligence Summary Report (October 2017).

9.
All costs related to the installation of storage tank seals and gaskets, required by Refinery Sector Rule MACT Subpart CC, to be identified in the established compliance schedule for tank inspection and repair. This issue is recorded in section 2.2.3 of ERM’s Due Diligence Summary Report (October 2017).

10.
All costs to empty, blind-flange or air-gap any of the out-of-service tanks listed below.

Tank Number
TK034
TK046
TK047
TK048
TK055
TK062
TK088
TK089
TK090
TK095
TK098
TK099
TK110
TK147
TK159
TK232
TK249

11.
All costs for removal of out-of-service assets identified in section 6.2.8 of ERM’s Due Diligence Summary Report (October 2017). These assets include 17 tanks (shown in Section 10 above), asphalt loading rack, pipelines, red dye shed and lead shed.

12.
All costs related to the performing of an assessment of propane and butane vessel containment areas, and any resulting project expenses required, to ensure compliance with National Fire Protection Association (NFPA) fire codes. This issue is recorded in section 6.3.3 of ERM’s Due Diligence Summary Report (October 2017).

Schedule VI- Page 22 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





13.
All costs related to performing an initial direct assessment, and any resulting required repairs, of the Andeavor-owned segment of the underground “Kinder Morgan” crude pipeline. This issue is recorded in section 3.3.1 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

14.
All costs related to performing an initial inspection, and any resulting required repairs, of the wharf sumps. This issue is recorded in section 3.3.5 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

15.
All costs related to performing an initial inspection, and any resulting required repairs, of the cathodic protection (CP) systems for the aboveground storage tank bottoms, buried facility piping and marine structures. During this inspection the rectifiers will be surveyed and any rectifiers which are not Nationally Recognized Testing Laboratory (NRTL) listed per OSHA (Occupational Safety and Health Administration) and NFPA requirements will be replaced and costs will be subject for reimbursement. These issues are recorded in section 3.4.17 of Coffman’s Mechanical Integrity Due Diligence Study (September 2017).

16.
All cost of in-service inspections and evaluations of the condition of tank walls and tank floors for each of the following tanks, using accepted engineering methods for non-invasive external inspections that do not require that a tank be emptied or structurally altered, which are conducted before the earlier of (i) an API 653 inspection of such tank and (ii) November 7, 2022, up to an aggregate reimbursable cost not to exceed two million dollars for all such tanks.


Schedule VI- Page 23 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Tank Number
TK003
TK005
TK006
TK008
TK011
TK013
TK015
TK017
TK018
TK021
TK022
TK027
TK030
TK032
TK033
TK035
TK036
TK037
TK038
TK113
TK114
TK142
TK148
TK230
TK247
TK054
TK056
TK138
TK160
TK157
TK221
TK222
TK223
TK224
TK225
TK226
TK227
TK228
TK229



Schedule VI- Page 24 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For 2018 Assets Contribution Agreement listed on Schedule VII:

Defined terms used in this portion of Schedule VI without definition will have the meaning given such terms in the 2018 Assets Contribution Agreement.

Capital Projects
The Andeavor Entities shall reimburse the Partnership Group for:
1.
Los Angeles Refinery Wilmington - Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of Partnership Group, the Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:
IDEA #
AFE
DESCRIPTION
NA
LA-130014
RAIL CAR FALL PROTECTION
100000000000000007122018
NA
TANK GAUGING PH V
100000000000000013322018
NA
LAR CATHODIC PROTECTION PROGRAM
100000000000000014342018
NA
RP&S CONTROL SYSTEM MODERNIZATION
100000000000000020072018
NA
REPLACE EAST RAILCAR LOADING PLATFORM
100000000000000042922018
NA
Tank Gauging VII
100000000000000042822018
NA
UPR – LARW
NA
NA
Tank 11001 Double-Bottom Upgrade Project
NA
LA-120052
TANK GAUGING – PHASE III
NA
LA-160120
LARW FIREWATER UPGRADE NW TANK FARM – 5B
NA
LA-170005
2017 WIL TANK 80065 REBUILD
NA
LA-170010
TK-80081 REBUILD – CRUDE
NA
LA-170018
TK-080038 REBUILD
NA
LA-170038
2023 WIL TANK 80060 REBUILD – CRUDE
NA
TA-170031
2017 WIL TANK 80218 SHELL REPAIRS
NA
SC-189066 / TA-180016
TANK 80210 Unplanned Repairs (Revision No. WP 18044B)

Schedule VI- Page 25 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For any such projects listed above in this section 1 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
2.
Los Angeles Refinery Carson - Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:
IDEA #
AFE
DESCRIPTION
NA
LA-160102
70 SERIES BUTANE SPHERE LEVEL MEASUREMENT
NA
LA-180057
PROPANE LOADING ODORANT TRIP
NA
TA-170032
2018 CAR TANK 61 FLOOR/BOTTOM SHELL

Schedule VI- Page 26 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




 
For any such projects listed above in this section 2 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
3.
Mandan Refinery - Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:
IDEA #
AFE
DESCRIPTION
NA
MN-170096
TANK FIELD MODERNIZATION - PHASE 4
100000000000000013852018
NA
FB-754 NEW CR & INTERNAL FLOATING ROOF CONVERSION
100000000000000013862018
NA
FB-706 NEW CR & INTERNAL FLOATING ROOF CONVERSION
NA
MN-180087
INSTALL SPARE GA-778 PROPANE LOADING PUMP
NA
MN-180084
TANK FIELD MODERNIZATION - PHASE 5
100000000000000020132018
NA
REPLACE OM PLC OR MOVE TO THE DCS
100000000000000020182018
NA
FB-724 - NEW INTERNAL FLOATING ROOF
NA
MN-180094
Firewater Line to Rail Switch Yard
NA
MN-180085
Oil Movements HPM Migration
100000000000000041422018
NA
FB-738 Foam Pipe and New Basin
NA
MN-170121
BUTANE TRUCK OFFLOADING
NA
TA-160011
FB-751 DOUBLE FLOOR REPLACEMENT
NA
TA-160013
FB-741 INTERNAL SHELL REPAIR
NA
TA-160014
FB-755 INSPECT AND REPAIR
100000000000000006842018
NA
FB-738 - BOTTOM REPAIRS AND BASIN ENHANCEMENT
100000000000000006852018
NA
FB-752 - BOTTOM REPAIRS AND BASIN ENHANCEMENT
100000000000000006862018
NA
FB-742 - BOTTOM REPLACEMENT
100000000000000006922018
NA
FB-710 Inspect and Repair
100000000000000006932018
NA
FB-726 Inspect and Repair
NA
TA-180109
FB-717 Repairs
100000000000000042412018
NA
Tank Field Modernization - Phase 6
NA
MN-180109 / NG-180069
Butane Sphere Valve Access Platforms
NA
MN-180100
Install Water Draw Systems on LPG Tanks

For any such projects listed above in this section 3 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
4.
Salt Lake Refinery - Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the Andeavor

Schedule VI- Page 27 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:
ITEM # (IDEA #)
ID (AFE)
DESCRIPTION
NA
SL-160012
SALT LAKE TIER III GASOLINE COMPLIANCE (Tank 248 + Rail + Dan Upgrades + Blend Upgrades)
NA
SL-170063
TANK 144 REPLACEMENT (new 245)
NA
SL-170004
TANK 245 REPLACEMENT (new 244)
NA
SL-170034
TANK 213
NA
SA-179045
Automation Modernization Program (AMP) (to replace OMD CSM and BLR SIS projects)
100000000000000017312018
NA
DIESEL / JET MANIFOLD SEGREGATION
100000000000000027732018
NA
TANK 243 REPLACEMENT
100000000000000006602018
NA
TANK 206 TURNAROUND
100000000000000006612018
NA
TANK 247 TURNAROUND
100000000000000006652018
NA
TANK 246 TURNAROUND
100000000000000006772018
NA
Tank 206(A) New Tank
Unknown
Unknown
Replace Bottom 1/3 of Sphere 306
NA
SL-180012
FCU Feed Strategy Project
For any such projects listed above in this section 4 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
5.
Delek Asphalt Terminals – Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:

Schedule VI- Page 28 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




IDEA #
AFE
Location
DESCRIPTION
TBD
TBD
Fernley (50%)
Fall Protection – Truck
TBD
TBD
Fernley (50%)
Fall Protection – Rail
TBD
TBD
Fernley (50%)
Remove surface impoundment
TBD
TBD
Elk Grove
Fall Protection – Truck
TBD
TBD
Elk Grove
Fall Protection – Rail
TBD
TBD
Elk Grove
Replace CS RTO lines with SS
TBD
TBD
Elk Grove
Remove surface impoundment
TBD
TBD
Elk Grove
Piping debottleneck
TBD
TBD
Elk Grove
Refurbish PMA unit
TBD
TBD
Mojave
Fall Protection – Truck
TBD
TBD
Mojave
Fall Protection – Rail
TBD
TBD
Mojave
Hot oil booster pump
TBD
TBD
Bakersfield
Fall Protection – Truck
TBD
TBD
Bakersfield
Fall Protection – Rail
TBD
TBD
Bakersfield
Remove surface impoundment
TBD
TBD
Bakersfield
New Boiler/Steam Generator
TBD
TBD
Bakersfield
Hot Water tank
TBD
TBD
Bakersfield
New emission control unit
TBD
TBD
Phoenix
Fall Protection – Truck
TBD
TBD
Phoenix
Fall Protection – Rail
TBD
TBD
System
Spare emulsion mill/housing
TBD
TBD
System
Spare PMA mill tooling
For any such projects listed above in this section 5 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
6.
BakkenLink / Fryburg – Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified:

Schedule VI- Page 29 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




IDEA #
AFE
DESCRIPTION
NA
NG-170034
FRYBURG RAIL TERMINAL T103 & T104 VALVE
NA
NG-180026
FRYBURG RAIL TERMINAL SECURITY IMPROVEMENT
NA
NG-180019
TGP METER SKID BUILDING UPGRADES
NA
NG-180020
ARC FLASH MITIGATION TGPM
NA
NG-180021
TANK LIGHTNING PROTECTION TGPM
NA
NG-180022
FLOWCAL IMPLEMENTATION BAKKENLINK
NA
NG-180017
TANK MIXERS T201 AND T301 AT WATFORD CIT
For any such projects listed above in this section 6 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
7.
Jal NGL Storage Facility – Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the applicable Andeavor Entities shall reimburse the Partnership Group for all capital costs incurred for the execution of the following projects identified
IDEA #
AFE
DESCRIPTION
TBD
TBD
Dead leg removal project: Remove several dead legs SW of the pump house and reroute a brine water line to mitigate an existing ramp concern
99991944
NA
2019.SMT.Jal NGL Storage Facility. Brine Pond liner replacement and salt/sand disposal
TBD
TBD
2019.SMT.Jal. Inline filters for line coming in from MAPCO
TBD
TBD
2019.SMT.Jal NGL Storage Facility. Install a gas separator in the brine line
TBD
TBD
2019.SMT.Jal NGL Storage Facility. SDV upstream of product pumps & relocate discharge/suction valves outside of pump room
For any such projects listed above in this section 7 that are required to maintain safe operation and compliance of the Assets, the Partnership shall determine the final project scope in its sole discretion.
Expense and/or Capital Projects
1.
The Parties agree that the following tanks relating to the LARW Refinery Unit included in the 2018 Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 36 months prior to the date hereof, or are deemed in compliance with API 653 through current risk-based management inspection (RBMI) standards and whose next API 653

Schedule VI- Page 30 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




inspection is scheduled greater than 20 years after the Effective Date, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of Andeavor.

Tank Number
776
777
778
779
780
1503
13502
50000
80035
80057
80092
80210
80219
125001
125002

2.
The Parties agree that the following tanks relating to the LARC Refinery Unit included in the 2018 Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 36 months prior to the date hereof, or are deemed in compliance with API 653 through current risk-based management inspection (RBMI) standards and whose next API 653 inspection is scheduled greater than 20 years after the Effective Date, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of Andeavor.

Tank Number
74
350
351
352
353
354
355
681


Schedule VI- Page 31 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




3.
Upon mutual consent on project scope between the Andeavor Entities and the Partnership, the Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following miscellaneous projects at the LARW Refinery Unit or LARC Refinery Unit, identified in the table below.

NRE ID#
Description
6473
RP&S Replace 200 ft of 8” Slops Line
6456
RP&S Replace 800 ft of 12” Vapor Recovery Piping – V2331 to VXXXX
6474
Tank 80219, hot tap a new nozzle at ~15’
6477
REPLACE LIGHTING AT CONTROL ROOM MANIFOLD
6273
Brinewater to slop Bypass line
6280
PLATFORM BETWEEN TANK 80219 AND 80087
6197
RP&S Install minimum flow kickback for P-1206
6202
RP&S Steam pressure control valve at tank 118066
5802
Replace 73-CP-1 (RP&S Central Tank Farm) PLC
TBD
Clean and air gap tanks 11000, 11001, 11003 and 11004
WP18044B
Tank 80210 expense minor repairs

4.
The Parties agree that the following tanks relating to the Mandan Refinery included in the 2018 Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 36 months prior to the date hereof, or are deemed in compliance with API 653 through current risk-based management inspection (RBMI) standards and whose next API 653 inspection is scheduled greater than 20 years after the Effective Date, and are excluded from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of Andeavor.


Schedule VI- Page 32 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Tank Number
FB-702
FB-708
FB-714
FB-715
FB-717
FB-721
FB-722
FB-725
FB-726
FB-728
FB-729
FB-731
FB-744
FB-747
FB-753
FB-758
FB-771
FB-774

5.
Upon mutual consent on project scope between Andeavor and the Partnership, the Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following miscellaneous projects at the Mandan Refinery, identified in the table below.

Expense Order #
Description
9074513
OTE – GA759 & GA759S Pump Foundation Replacement
9026500
OTE – Remove OM RV Pot & Modify Drain Piping
unknown
OTE – Resolve Wet Propane Issue

Upon mutual consent on project scope between Andeavor and the Partnership, the Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of repairs, or replacement as needed, stemming from the 2018 API-653 inspection of Tank FB-717, including identified settlement issues (reference Peter Mignosa report and recommendations, August 2018).

6.
The Parties agree that the following tanks relating to the Salt Lake Refinery included in the 2018 Assets Contribution Agreement listed on Schedule VII have been inspected, cleaned, and repaired to ensure compliance with API 653 or API 510 standards within the 36 months prior to the date hereof, or are deemed in compliance with API 653 through current risk-based management inspection (RBMI) standards and whose next API 653 inspection is scheduled greater than 20 years after the Effective Date, and are excluded

Schedule VI- Page 33 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




from the reimbursement requirements listed above unless such actions fail to meet such compliance standards due to the negligence of Andeavor.

Tank Number
142
190
204
212
213
244
245
306
321
326
330
427C

7.
Upon mutual consent on project scope between Andeavor and the Partnership, the Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following project at the Salt Lake Refinery, identified in the table below.

IDEA #
Description
Unknown
Tank 297 – Lift and Level
Unknown
J-928D ATB Loading

8.
Upon mutual consent on project scope between Andeavor and the Partnership, the Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following miscellaneous projects identified in the table below.

Asphalt Terminals
Description
Location
Berm repair
Elk Grove

Expense and/or Capital Reimbursements Identified in Due Diligence
Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of the Partnership Group, the applicable Andeavor Entities shall reimburse the Partnership Group for all expense and capital costs incurred for the execution of the following Andeavor reimbursements identified in the tables below. For

Schedule VI- Page 34 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




all reimbursements in which a study, evaluation, inspection or review must first be performed, such activity must be conducted within 24 months of the Effective Date in order to be subject to Andeavor reimbursement.
1.    Los Angeles Refinery Carson
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
LAR
The recently revised CA OSHA Rule 5189.1, Process Safety Management for Petroleum Refineries, incorporates a number of significant changes related to hazard reviews that will potentially result in modifications to RP&S assets. New review methodologies to be incorporated include:
• Safeguard Protection Analysis
• Hierarchy of Hazard Controls Analysis (HHC)
• Damage Mechanism Reviews (DMR)
Discussions with PSM staff indicated that while many of the practices have been adopted within the refinery, some of the additional hazard reviews are likely to result in project costs related to safeguard improvements
All costs related to implementing additional safeguard improvements to conform with changes in PSM requirements
LAR
Underground piping is removed/decommissioned as part of the UPR effort ongoing at the refinery (required by Cleanup Abatement Order (CAO)). There is a risk that additional underground piping not previously identified will need to be included in the program. Between 2003 and December 2017, approximately 89,895 feet of aboveground pipeline were installed and approximately 69,182 feet of underground pipeline were decommissioned.
All costs for projects to comply with Cleanup Abatement Order, decommissioning underground piping not previously included in the removal program
LAR
Additional investment related to Air Toxics health risk reduction requirements may be required due to:
• Increased calculated health risk due to changes in California Air Toxics risk calculation methodologies, resulting in additional risk reduction activities
• Increased focus on risk from refineries due to California AB617 community monitoring that could lead to additional emission control requirements on tanks (adding domes or vapor recovery to additional tanks), alternative measures for providing power during turnarounds (eliminating portable engine use), and additional cost related to controlling vacuum truck emissions.
• Increased cost related to SCAQMD Rule 1180 Refinery Fenceline and Community Air Monitoring (additional instrumentation will be installed in the next year and may need to be updated in 5 years)
All costs related to identified projects required to comply with California Air Toxics regulations
LAR Carson
Shared containment dikes without intermediate subdivisions (773, 774, 775). Potential risk of fire spread between tanks.
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies
LAR Carson
Tanks 677, 678, 679, 680 (15k bbl. each) are out of service. Tanks would require extensive repairs to reinstate, including adding anchors for seismic stability due to height to diameter ratio.
All costs to perform study to determine if tanks should be demolished and for any resulting costs to demolish tanks, if required.

Schedule VI- Page 35 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
LAR Carson
Vessels grouped into shared containment areas without subdivision or remote impoundments (pentane spheres 681, 682, 683, 684) and (propane bullets 350, 351, 352, 353, 354, 355)
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies
LAR Carson
There is an ongoing, but incomplete project to upgrade the tank L&J Technologies gauging system to radar type.
All costs to upgrade the tank L&J Technologies gauging system to radar type.
LAR Carson
Motorola Intrac tank overfill protection system is no longer supported. A project has been identified to upgrade it.
All costs to upgrade tank gauging and control systems
LAR Carson
Arc flash labels are not provided on any equipment. There is a program in place to correct this within the next two years. Part of the energized work permitting process is have the facility engineer use the existing ETAP model to calculate the incident energy at the work location.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
LAR Carson
Two single bottom tanks do not have adequate levels of cathodic protection.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered
LAR Carson
Cathodic protection levels on the buried facility piping could not be verified due to suspect data.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered

2.    Los Angeles Refinery Wilmington
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
LAR Wilmington
LPG vessels 6000 and 6001 as well as the 700 series LPG vessels (7 total) do not have a back-flow check valve or thermal activated automatic shutdown valve in place as required per NFPA 58.
All costs for upgrades required to comply with NFPA 58 automatic shutdown requirements on tanks 6000 and 6001 and 700 series tanks
LAR Wilmington
Pressure relief devices on V-1700 series pressure vessels (gasoline) vent to atmosphere directly above vessel.
All costs to evaluate requirements and for any related projects required to reroute V-1700 series pressure vessels relief vents
LAR Wilmington
No cable type ground connection between the rack and rail car was observed.
All costs to evaluate grounding requirements at the LPG train car rack and for any related projects required to meet Andeavor standards
LAR Wilmington
The loading safety platforms need upgraded.
All costs to upgrade rail car loading racks to Andeavor Logistics standards
LAR Wilmington
The truck rack lacks a grounding assurance system.
All costs to install interlocks and grounding systems on Truck & Rail racks
LAR Wilmington
Arc flash labeling is incomplete.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
LAR Wilmington
The Honeywell DCS system for both the inline blending area and tank farm is no longer supported. A project has been identified to upgrade to the E300 system.
All costs related to any control system upgrades needed for the Honeywell inline blender

Schedule VI- Page 36 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
LAR Wilmington
The first phases of the project to upgrade tank gauging to radar type used a wireless system to report data to the control system. Current Andeavor practice is hard wire level transmitters. An evaluation of the security of the wireless system is being conducted.
All costs related to modifying wireless systems to hardwire to meet Andeavor standards.
LAR Wilmington
There is an ongoing, but incomplete project to upgrade the tank gauging system to radar type. Approximately 30 tanks still need to be completed.
All costs to upgrade tank gauging to radar types
LAR Wilmington
No operational cathodic protection exists to protect aboveground storage tanks with single bottom floors or buried facility piping in direct soil contact.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys
LAR Wilmington
No fixed fire protection on tanks 13506, 13507, 13508, 7200.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
LAR Wilmington
The following observations were made related to secondary containment at LARW that will require additional investment:
• Erosion of roads and berms was observed (not only asphaltic covering, but the underlying soil starting to show shear, erosion, signs of scouring).
• Integrity of sidewalls, cracks observed in concrete around west side tanks (north wall). 
• Weak and uncoated points in berms.
• Tank dike floor has been excavated to below the berm wall substrate in South tank farm, which may compromise the berm integrity.  
• Piping interconnections between berms should be reviewed as part of the SPCC Plan renewal efforts.
All costs to complete SPCC plan review and to make any necessary repairs to improve tank farm berms and roadways at LAR-Wilmington
LAR Wilmington
LPG Rail and Truck loading racks lack the following safe guards: 
• No driver card system,
• Loading operation is manual,
• No predetermined load volume capacity,
• No automated gauge/level monitoring,
• functional fire detection UV/IR with automatic water deluge (system is installed, but has not been commissioned).
All costs for initial review of safe guards and for any resulting improvements required to bring the LPG rail and truck rack up to Andeavor standards
LAR Wilmington
Four clusters of four 80,000 bbl. tanks containing crude, slop, transmix or VGO have comingled secondary containment dikes. An event of loss of primary containment (LOPC) in one tank would spread to the entire surface of the common dike floor, creating a large spill area. If the event is ignited (pool fire) the consequence would be more severe and lead to potential escalation to neighboring tanks. Construction of additional segregation berms would be required for tank segregation containment.
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies

Schedule VI- Page 37 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
LAR Wilmington
Butane spheres and propane bullets near to the road tanker loading/unloading area are not equipped with flammable or fire detection.
All costs to evaluate fire protection systems to ensure compliance with NFPA, local city regulations and Andeavor fire protection standards; and for any resulting modifications required to comply with above regulations and standards

3.    Mandan Refinery
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Mandan
Multiple tanks grouped into a single secondary containment dike lack subdivision berms resulting in potential spread of spills to inundate all tanks in the group. This increases the risk of loss in the event of a fire. Reference tank groups (743, 745); (737, 738); (741, 756, 707, 709); (715, 714, 710, 708, 712, 711); (742, 744, 720, 718); (719, 722, 721, 732, 756); (757, 716); (717, 740)
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies
Mandan
Three significant dents are present at the top course of the north face of Tank 734.
All costs to evaluate integrity of tank 734 dents and to make any required repairs
Mandan
U-1A forms are not available for all pressure vessels (bullets and spheres). Modifications, if required, may become complicated without the original manufacture forms.
All costs to perform a refinery engineering review and to document original U-1A forms are on file for all pressure vessels, and all costs to replace any vessels, if required
Mandan
Original drawings indicate shells of the LPG bullets are made of ASTM A212 steel, which historically has had failures associated with brittle fracture. The material is no longer made. Mandan has a DMT of about -20F, so brittle fracture should be considered in vessel materials.
All costs to perform a study, if needed, to evaluate brittle fracture areas on LPG bullet tanks, and to cover any resulting repairs required
Mandan
A majority of the concrete pipe support foundations have experienced heaving/settling, in some cases failing completely, resulting in loss of support of the pipe. Many foundations are cracked, eroded, or completely broken away exposing the reinforcing steel and are no longer providing support to the piping.
All costs to perform a study to evaluate tank farm pipe foundations and supports in question and any costs to address deficiencies discovered
Mandan
Several supports for the 14” jet fuel pipe routed along the west side of Tank 734 have failed completely. The pipe is spanning approximately 80'-0" unsupported which could result in overstress.
All costs to repair supports on the 14" jet piping along the west side of TK-734
Mandan
The LPG transfer pump 759 and 759S foundation and support slabs are compromised and do not provide sound support or drip containment for the pumps. Refinery stated the pump foundations are slated for replacement.
All costs for projects to repair or replace LPG pump 759 and 759S foundations
Mandan
Pump 778 has issues with its dry well collecting liquids which can freeze and cause misalignment of the pump. Other pumps in the area (e.g. 759) do not have the same capacity as 778, so when pump 778 goes down flow to the process is limited. Refinery personnel indicated a project to relocate pump 778 is in initial stages to determine funding.
All costs to conduct a complete mechanical reliability evaluation of pump 778 and to upgrade and or relocate, as needed

Schedule VI- Page 38 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Mandan
No document control for P&ID updates or revisions. Work history on pumps is only available for the past year due to the new system for tracking pump maintenance.
All costs to evaluate document controls and determine if appropriate P&ID's, plot plans, isometric and electrical one-line drawings and maintenance records are in place, as well as to prepare any required documents.
Mandan
The rail car loading stations on track 8 have catch basins for spill collection. The catch basins are piped to a sump with integrity of buried pipe unknown.
All costs of recommended underground piping replacements, as a result of initial catch basin inspections. Inspections are being implemented into refinery inspection programs for rail car loading stations.
Mandan
Cable tray and conduit has failed at many locations due to being exposed to snow loads, or due to settling/heaving or failure of pipe supports. Failed conduit may be located in classified areas, with internal wiring exposed.
All costs to perform a survey of the tank farm and identify any failed trays and conduits and implement projects to repair.
Mandan
Fire and Gas detection is typical of this type of facility and consists of direct observation by field personnel.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
Mandan
35 storage tanks do not have fixed fire protection systems for delivery of foam to the tank interior.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
Mandan
Fire foam piping within the tank farm is poorly supported due to support failure. Supports have jacked or settled and, in several locations, are no longer supporting the piping.
All costs to conduct a survey of the tank farm, to determine if there are failed fire foam piping supports, and for any resulting projects required to make repairs
Mandan
Storage tank level monitoring varies throughout tank farm. Some tanks do not have independent high-level switches. Some tanks do not have levels that report to the control room - level is monitored at the tank using the gauge board. Lack of high level switches increases potential for overfill.
All costs to conduct a survey of the Andeavor requirement for high level switches, and for any resulting projects to address deficiencies
Mandan
No lightning protection system was observed on storage tanks with EFRs.
All costs to evaluate requirements for lightning protection on storage tanks and to address any deficiencies to Andeavor standards
Mandan
Cathodic protection of the buried product facility piping could not be verified as CP monitoring is not being performed on an annual basis.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered
Mandan
Cathodic protection of the tank bottoms could not be verified as perimeter readings are being obtained and the data is suspect.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered
Mandan
Tracks have significant settlement at decanted oil, diesel and jet, and LPG transfer areas.
All costs for one-time 3rd party rail integrity assessment and any repair recommendations identified
Mandan
Rail electrical isolation between mainline and spurs to decanted oil, diesel and jet, and LPG transfer areas appears to be compromised.
All costs for one-time 3rd party rail integrity assessment and any repair recommendations identified

Schedule VI- Page 39 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Mandan
Foundations have settled or heaved creating unleveled walking surfaces and tall bottom steps to grade creating fall hazards.
All costs to conduct a survey of stairways not in compliance with OSHA requirements and those with uneven walking surfaces and for any resulting projects required to address safety concerns
Mandan
Access ladders at the aboveground storage tanks exceed OSHA height limits without intermediate landings and do not include safety cages or fall protection devices.
All costs to conduct a survey of tank access ladders for compliance with OSHA and for any resulting repairs required to address deficiencies
Mandan
The SPCC Plan does not document the volumes of the secondary containment calculations. The numbers presented in the plans are the design basis for the containments.
All costs to perform SPCC Plan update and for any resulting secondary containment improvements required
Mandan
RSR compliance modifications are excluded from tank inspection plan. Three tanks have been identified that will require equipment upgrades for compliance with the Refinery Sector Rules (RSR) provisions for tank seal and gaskets. The Refinery cost estimates have been identified for the three tanks. Future inspections are expected to identify similar missing seals on smaller openings and equipment modifications related to RSR compliance have not yet been determined for 7 other tanks.
All costs to complete inspections for tanks subject to refinery sector rules and for any resulting modifications or repairs required to address deficiencies related to RSR compliance
Mandan
Ethanol tank (Tank 758) will need IFR or vapor control. Tank just moved into Group 1 and is now in Refinery Sector Rule (RSR).
All costs to install IFR or similar vapor controls on Ethanol tank 758, required to ensure compliance with Refinery Sector Rule
Mandan
The rack drip pans and rail loading area drain to a sump. Based on discussions with Operations and Environmental, it was unclear who inspects/monitors the sump and if the sump is currently operational because it was disconnected from the truck rack. The sump is not equipped with an automated pump or alarm. The concrete sump appears to be in poor condition with spalling and cracks present, an indication of integrity concerns. A hydrocarbon sheen was observed on the water in the sump and the ground adjacent to the sump.
All costs to perform a study, evaluating integrity of the sump and its function in the context of SPCC plan
Mandan
Horse trough sump collects steam condensate and reciprocating pump compressor oil from LPG truck rack and LPG and butane storage tanks. A hydrocarbon sheen was observed on the water in the sump and on the ground adjacent to sump, indicative of an overfill of the sump. S ump is not equipped with automatic alarms or shutoffs to prevent overflow. Sump is maintained by operator of the LPG truck rack who calls a vacuum truck to empty sump.
All costs to perform a study, evaluating integrity of the sump and its function in the context of SPCC plan
Mandan
Tanks in the tank farm did not have automated level indication. The facility is currently in the execute stage of the tank field modernization project that will see each tank receive automated level indication (MOC M20181397-001).
All costs related to installation of independent High level switches on tanks, as part of tank modernization project

4.    Salt Lake Refinery

Schedule VI- Page 40 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Salt Lake
Tanks sharing a dike cell lack intermediate berms and do not provide 100% separation with the other tanks in such that they could inundate the adjacent tank if a spill occurred. A spill fire would be contained within the main diked area.
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies
Salt Lake
Many dike walls contain open culverts for communication between containment cells, or unsealed casings between cells. As a result, containment dike walls do not provide 100% separation with the other tanks in such that they could inundate the adjacent tank if a spill occurred. A spill fire would be contained within the main diked area.
All costs to conduct fire risk study, to determine risks associated with shared containment dikes, and for any related projects required to address NFPA deficiencies
Salt Lake
Tank 325 was modified with 6 vertical channel stiffeners at the north side of the tank to maintain the shape of the tank due to a reported fire in 1989. Refinery staff indicated issues with the floating roof snagging on the shell.
All costs to conduct an inspection of tank 325 and to address repairs through refinery tank repair program
Salt Lake
The shell at the bottom two courses of Tank 322 appears to be bulging, and the inspections group has been notified.
All costs to conduct an inspection of tank 322 and to address repairs through refinery tank repair program
Salt Lake
Dents or shell wall distortion is present at the 3rd and 4th course at the east side of tank 297, and at the base course of tank 308.
All costs to conduct inspections of tanks 297 and 308 and to address repairs through refinery tank repair program
Salt Lake
Riveted tanks are notes as weeping, resulting in staining on the ground.
All costs to conduct inspections of applicable riveted tanks and to address repairs and or replacement through refinery tank repair program
Salt Lake
Tank 204 containment area has hydrocarbon product seeping from underground around the perimeter of the tank with oil staining at the gravel directly beneath the tank chime and throughout the containment dike areas.
All costs for managing Tank 204 asphalt contamination remediation and clean up, including any required tank inspections or related repairs or modifications
Salt Lake
Floating oil at surface water present at tank 247 due to storm water backup to oily waste system during rain event.
All costs to clean up tank 247 containment due to stormwater backups
Salt Lake
Out of service and dead leg piping in the tank farm is not actively managed.
All costs to conduct a study to identify out of service and dead leg piping in the tank farm and for any projects required to address recommendations per Andeavor standards
Salt Lake
Some grounding operations at loading/unloading racks do not have ground proving (Scully) systems in place.
All costs to conduct an evaluation of the potential need for ground proving interlocks on truck racks and for any resulting upgrades required per Andeavor Standards
Salt Lake
The butane loading rack building's concrete column and roof girders are heavily spalled with exposed reinforcing steel throughout.
All costs to conduct an evaluation of the butane loading rack building concrete columns and roof girders, and for any projects required to address resulting recommendations
Salt Lake
No automated fire or gas detection systems were observed; however this is typical for this type of facility.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards

Schedule VI- Page 41 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Salt Lake
27 storage tanks do not have fixed fire protection systems for delivery of foam to the tank interior.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
Salt Lake
The fire foam piping at 5 of the tanks with fire foam chambers extend down the shell with a flanged connection near grade. The fire foam piping does not extend to the edge of the containment dike. In the event of a fire, fire department would not have access to the foam piping connection without entering the dike and bolting up a flange. Connection to the existing flanged connection at the tank shell is unlikely to occur in the event of a fire event.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
Salt Lake
The software controlling the gasoline blender pumps is outdated and no longer supported.
All costs related to upgrading the automation controls at the blender per Andeavor standards
Salt Lake
Storage tank level high-high level switches are not independently hardwired back to the DCS.
All costs related to installing High-High level switches to comply with NFPA 30 Chapter 21.7.1.1 and Andeavor standards
Salt Lake
Tank level alarms set higher than currently recommended by API 2350 resulting in recent overfill of one of the vessels.
All costs to conduct an alarm rationalization study on tank level alarm settings and to make required revisions in control systems per Andeavor standards
Salt Lake
Cathodic protection levels could not be verified for select aboveground storage tank bottoms and the buried facility piping.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered
Salt Lake
Asphalt seeps were observed within the bermed area at Tank 204. The seeps cover areas around Tank 204 and can impact operations within the containment area.
All costs for managing Tank 204 asphalt contamination remediation and clean up, including any required tank inspections or related repairs or modifications

Schedule VI- Page 42 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Salt Lake
The following issues with secondary containment and stormwater/wastewater management were identified at the Site:
1) a survey of secondary containment volumes was completed during 2018 to confirm adequacy with respect to SPCC requirements; the report identified that Tanks 244 and 245 have inadequate secondary containment capacity and redesign is anticipated by the environmental representative.
2) The manual drain valve for the secondary containment berm around Tank 157 was reported by site personnel to be maintained open to allow general stormwater drainage from the depressed (low-area), exterior roadway to drain water from the road into the bermed area for storage/evaporation in an effort to reduce flooding; however, this is contrary to SPCC requirements.
3) Free phase oil mixed with water was observed within the secondary containment berm for Tank 247. The site representative reported that the wastewater treatment facility capacity can be overwhelmed following heavy precipitation events, as occurred the day before the site visit. The backup of hydrocarbon containing wastewater into the tank berms reduces the secondary containment capacity and could result (temporarily) in noncompliance with the SPCC requirements as well as additional H&S and remediation activities.
All costs related to addressing improvements to SPCC plan containment and stormwater related deficiencies, as well as all costs related to wastewater cleanup
Salt Lake
Site is in the process of completing a Baker Risk facility siting evaluation. Based on visual evidence and interviews with site personnel, major equipment relocation costs are anticipated.
All costs for repairs or projects to address risk reduction recommendations from Baker Risk Siting evaluation
Salt Lake
Eleven tanks have been identified that will require equipment upgrades in 2025 for compliance with the Refinery Sector Rules (RSR) provisions for tank seal and fitting vapor controls. The Refinery cost estimates are presented in the plant Ten Year Tank and Boiler Plan 2017.
All costs for tank seal and fitting vapor controls projects required for compliance with Refinery Sector Rules
Salt Lake
The RSR rule requires venting to be controlled during equipment maintenance.
The Site has not yet identified the extent of equipment and maintenance shutdown venting that may be subject to the emission control measures required by the rule.
All costs for venting and emission controls projects required for compliance with Refinery Sector Rules
Salt Lake
The OMD (Oil Movements Division) PHA included the tank farm and remote tank farm. This PHA is currently in draft and under Site review. The PSM coordinator specifically indicated two recommendations will need to be corrected and are likely to be material:
(1) A corrosion study needs to be completed and recommendations implemented.
(2) More than 20 deadlegs were identified that potentially would need to be removed from service throughout the tank farm. 
All costs to finalize PHA study and obtain related recommendations and then to address findings

Schedule VI- Page 43 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Salt Lake
Three railcar derailments have occurred at the Site in the last 8 months, with one major derailment that required third party intervention to upright the cars. Facility representatives stated that one derailment was caused by ice and the other two derailments were caused by a rail integrity issue. The portion of the rail that was causing the issue was not identified during routine rail inspections. Representatives reported that the root cause of the rail integrity issue has not been identified. This rail section has since been replaced. Without understanding the integrity issue failure, the Site is not able to proactive address other sections of rail that may have similar integrity issues.
All costs for one-time 3rd party rail integrity assessment and any repair recommendations identified
Salt Lake
No hydrocarbon detection and alarm systems exist in the LPG truck loading area that could notify operations of a continuous release. An LPG release in close proximity to loading trucks accessing the rack could result in a high consequence event.
All costs to evaluate the potential need to install hydrocarbon detection and alarms at the LPG truck loading rack and to ensure compliance with NFPA and Andeavor Fire Standards, and then to address any deficiencies discovered
Salt Lake
There are >20 tanks that will require foam injection capabilities to be added to meet Andeavor standards requirements.
All costs to conduct a study of fire protection systems and identify tanks needing modification to comply with NFPA or Andeavor fire protection standards, and then to address any deficiencies discovered
Salt Lake
A 2011 Hydraulic Model Study identified the blending facility lacks potential firefighting infrastructure.
All costs for upgrading the firefighting infrastructure at the blending facility per Andeavor standards
Salt Lake
Five pressure relief devices (PRD) within the tank farm are anticipated to be subject to the RSR PRD standards. The Site has not yet completed the regulatory evaluation and the final applicability determination. PRD monitoring systems are required for systems to be in compliance with the rule.
All costs to conduct a regulatory evaluation to determine if PRD monitoring systems are required to comply with Refinery Sector Rules, and then to address any deficiencies identified


Schedule VI- Page 44 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




5.    Bakken Link and Fryburg
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
BakkenLink
The Arc Flash labels do not meet the requirements of the 2014 NEC (130D). The existing labels display the fault current but not the PPE requirements or the safe work zone. A 2018 project is in progress to complete an Arc Flash Study.
All costs related project to install Arc Flash labels
BakkenLink
Some CP test point locations do not exhibit adequate levels of cathodic protection.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys.
BakkenLink
The Arc Flash labels do not meet the requirements of the 2014 NEC. The existing labels display the fault current but not the PPE requirements or the safe work zone. A 2018 project is in progress to complete an Arc Flash Study.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
BakkenLink
The Arc Flash labels do not meet the requirements of the 2014 NEC. The existing labels display the fault current but not the PPE requirements or the safe work zone. A 2018 project is in progress to complete an Arc Flash Study.
All costs related project to install Arc Flash labels
BakkenLink
The aboveground storage tank shells were not grounded for lightning protection per NFPA requirements with the exception of the tanks at the Fryburg Rail Terminal.
All costs related to evaluate requirements for grounding tank shells for lightning protection per NFPA requirements and for any resulting repairs or projects required for NFPA compliance
BakkenLink
Several test points on the buried facility piping and tank bottoms do not exhibit adequate levels of cathodic protection.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys
Dry Creek
An engineered drainage swale is present on the south side of the facility. Facility receives runoff from the eastern adjacent property that bypasses the engineered drainage swale and has eroded a swale along the northern boundary of the facility.
All costs related to conducting a study for diversion of offsite runoff away from the facility to eliminate erosion on the property and any resulting projects required
Fryburg
Sedimentation into and erosion of the tank berms has diminished the design containment capacity and sufficient freeboard. Due to the presence of excessive sediment and standing water within the tank farm secondary containment, there is a reduction in containment volume.
All costs related to conducting a study of existing containment capacity to ensure that sufficient containment exists (ensuring that the study includes accumulated precipitation and sedimentation in the containment calculations) and costs to correct resulting noted deficiencies
Fryburg
There is inadequate secondary containment for 110% of the largest vessel (a rail car) spill at the diesel car rail loading area.
All costs related to conducting and documenting a secondary containment impracticability study

6.    Clearbrook Tankage, Minnesota Pipeline and Aranco Pipeline

Schedule VI- Page 45 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Clearbrook
Clearbrook - The transfer pipe between the primary and auxiliary roof drain sumps on Tank-14 cracked during the winter of 2017 / 2018 resulting in contents of the tank accumulating on the floating roof. The issue has been temporarily addressed by facility operators and the tank construction contractor has been notified to perform warranty repairs. A member of the Partnership Group should verify repairs are made.
All costs to make any required repairs related to the transfer pipe between the primary and auxiliary roof drain sumps on Tank-14.
Clearbrook
Clearbrook - The fire foam piping at Tanks 14 and 15 extend down the shell with a flanged connection near grade. The fire foam piping does not extend to the edge of the containment dike. In the event of a fire, the local volunteer fire department does not have access to the flanged connection from the access road. Connection to the existing flanged connection at the tank shell is unlikely to occur in the event of a fire event.
All costs to evaluate fire safety risk with 3rd party Operator and for resulting required project to route foam connections outside of the containment berm to a safe location.
Clearbrook
Clearbrook - Life of the semi-deep anode groundbeds could be reduced due to the absence of a venting system and use of non-chemically resistance anode lead cables.
All costs related to conducting a cathodic protection inspection and for any resulting repairs required.
Clearbrook
Tank 14 and 15 are designed to have foam for firefighting. The foam pipes end at the base of the tank so if there is a fire, firefighting crews will not be able to get close enough to the tanks to connect to the foam dispersal pipes.
All costs to evaluate fire safety risk with 3rd party Operator and for resulting required project to route foam connections outside of the containment berm to a safe location.
Clearbrook
Tanks 14 and 15 are equipped with IFRs.  The drain line between the secondary sump and the primary sump in Tank 14 leaked in the winter of 2017/2018.  The leak discharged oil to the top of the IFR. The line between the secondary sump and the primary sump has been blinded in Tank 14 to eliminate a future recurrence of a release.  Maintenance/repair of line will occur at next internal inspection. Repair costs will be material if undertaken outside of scheduled tank inspection.
All costs related to ensuring repairs are addressed in a timely manner and for any repairs required, which are not covered under tank warranty.

7.    Conan Gathering System

Schedule VI- Page 46 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Conan
Pipe traps may not have proper dimension to support ILI tools. Oversize pipe segment (barrel) appears to be too short. Also, no flanges are provided to allow for extending the barrel length.
  # Receivers: 85 (assuming only receivers at CTB’s, TUL’s and Conan Terminal in scope)
# Launchers: 79 (assuming only launchers at CTB’s and TUL’s in scope).
It appears the launchers/receivers could be prepared for ILI using a replacement barrel and additional pipe spools (sharing of the replacement barrel and piping is dependent on diameter; system contains piping with diameter 6”, 8”, 10, 12” and 16”).
Estimated cost for 10 extended barrels (launcher and receiver) and associated piping: $500k.
All costs related to correcting design issues with receivers and launchers.
Conan
Currently the leak detection system is mass balance system and is scheduled to be upgraded to ATMOS (quote was provided to project manager). Andeavor typically uses CPM through ATMOS.
    Total 91 Coriolis meters installed.
Price to upgrade to ATMOS CPM is approx. $500k.
All costs to evaluate if ATMOS system is needed and for any resulting upgrade of the leak detection systems.
Conan
Fire Suppression - A modification to the tank fire protection system at Conan Terminal was ordered by EOG and is scheduled (Protect-O-Burn Self Expanding Foam System for rim seal protection on (3) tanks). Allocation of additional $1.2MM quoted cost for entire system is unknown.
All required costs to upgrade the fire system for rim seal protection on 3 tanks as ordered by EOG after determination of Andeavor Entity/Partnership Group allocation
Conan
Although the facilities are exempt from industrial stormwater permitting requirements by rule, it is not clear whether the design of the facilities is adequate to prevent discharges of contaminants that could otherwise trigger individual permit requirements.
• Division berms and grading design may be insufficient to control drainage across the facilities (Hercules TUL in particular) and prevent stormwater from coming in contact with pollutants associated with process and truck unloading areas prior to off-site discharge
• Stormwater tanks associated with the truck unloading areas should be assessed for adequate capacity for the amount of received drainage
Improved stormwater management/diversion practices are likely to be material.
All costs related to conduct an engineering design study for addressing containment of storm water within the property and for any resulting required projects to address deficiencies in storm water containment.

8.    Rio Pipeline, Stateline and Midland Terminals
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Midland Terminals: Geneva/Zurich/Rio Pipeline
Rio Pipeline & Midland Short Haul Pipelines - CIS has not been performed to evaluate stray current interference from foreign operators.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys.
Midland Terminals: Geneva/Zurich/Rio Pipeline
Rio Pipeline – Rectifier #2 and #3 do not have AC power installed.
All costs related to projects required to install power to rectifiers #2 and #3

Schedule VI- Page 47 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Midland Terminals: Geneva/Zurich/Rio Pipeline
Geneva - The intermediate tank containments did not provide 100% separation with the other tanks in such that they could inundate the adjacent tank if a spill occurred. A spill fire would be contained within the main diked area.
All costs related to conducting a fire risk study and to address any resulting deficiencies in compliance with NFPA codes, if required.
Midland Terminals: Geneva/Zurich/Rio Pipeline
Geneva & Zurich - Pipe supports do not allow for pipe flexibility and piping is likely overstressed on the longer pipe runs at the facilities.
All costs to conduct a study of the piping and for any resulting repairs required to address facility piping stresses
Midland Terminals: Geneva/Zurich/Rio Pipeline
Geneva & Zurich - Arc flash labeling is incomplete.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
Midland Terminals: Geneva/Zurich/Rio Pipeline
Geneva & Zurich - The aboveground storage tank bottoms and facility piping do not exhibit adequate levels of cathodic protection at some test point locations.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys.
Midland Terminals: Geneva/Zurich/Rio Pipeline
Geneva & Zurich - The stair cross overs for piping and cable tray was not OSHA compliant. The tread depth was smaller than 10" and the height of the treads was over 7.5".
All costs related to fix deficiencies on identified stairways not meeting OSHA compliance
Stateline Terminal
Pipe supports do not allow for pipe flexibility and piping is likely overstressed on the longer pipe runs at the facility.
All costs to conduct a study of the piping and for any resulting repairs required to address facility piping stresses
Stateline Terminal
The 10 truck lanes that are not metered and use the truck pumps to unload crude to tanks SL-1 & SL-2. The unloading trucks have no protection or warning if a downstream valve was closed. The truck pump will deadhead against the closed valve.
All costs related to installing overpressure or other protection controls on truck loading racks for tanks SL-2 & SL-2
Stateline Terminal
MCC Module panelboards and building disconnects lack Arc flash labels.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
Stateline Terminal
Alarms and controls for truck offloading need to be reviewed. Power fluctuations are causing a flow control valve to close and divert product to the sump.
All costs related to upgrading electrical infrastructure at truck rack to prevent flow control valve closing and diverting product to sump
Stateline Terminal
There are no control interlocks on ten of the truck loading lanes. Hoses and fittings can overpressure when flow control valves are closed as a result of site power fluctuations.
All costs related to installing truck rack overpressure control interlocks on truck loading lanes.
Stateline Terminal
Ten of the truck loading spots are not equipped with truck grounding indication or any interlocks with the offloading operation.
All costs related to installing ground proving interlocks and or grounding systems at loading racks
Stateline Terminal
The stair cross overs for piping and cable tray is not OSHA compliant. The tread depth was smaller than 10" and the height of the treads was over 7.5".
All costs related to fix deficiencies on identified stairways not meeting OSHA compliance
Zurich, Geneva
The following issues with secondary containment were identified:
- The off-loading is not equipped with secondary containment.
- No design basis for secondary containment berm around Tanks (e.g., survey and geotechnical data on construction materials).
All costs related to conducting a containment survey and validating SPCC Plan and for any resulting projects required to address deficiencies found

Schedule VI- Page 48 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Geneva
The following issues related to secondary containment were noted:
- Facility off-loading lacks secondary containment. 
- No design basis for secondary containment berm around tanks (e.g., survey and geotechnical data on construction materials);
- Blowing sand has filled part of secondary containment and berm erosion has occurred.
- Additional concerns with containment capacity based on tank manifolding (three tanks are manifolded such that failure from one tank results in release from all three).
All costs related to conducting a containment survey and for any resulting projects required to address deficiencies found
Geneva
The following issues related to secondary containment were identified:
-Inadequate secondary containment capacity for H2S scavenger stored in unloading area.
All costs related to conducting a containment survey and validating SPCC plan and for any resulting projects required to address deficiencies found
Stateline
Crude release (24.4 Bbls) occurred on March 8, 2018 due to power outage, which flowed across property and off-site onto a neighboring. Remedial actions are in process. Additional information is required to ensure that the cleanup meets Texas cleanup requirements.
All costs related to indemnify for long term subsurface liability, if warranted, and to ensure remedial efforts meet the TCEQ Standards
Stateline
Lack of documentation indicating if retention pond has adequate capacity to prevent uncontrolled discharge from facility.
All costs related to conducting a study to determine capacity of stormwater retention pond and for making any resulting upgrades to ensure compliance with permits

9.    Wink Station, Mason East Station, Yucca and Mesquite Truck Stations, Bobcat Pipeline
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Bobcat & Wink Short Haul Pipelines - The pipelines do not exhibit adequate levels of cathodic protection at multiple test point locations.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys.
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Bobcat & Wink Short Haul Pipelines - CIS has not been performed to evaluate stray current interference from foreign operators.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys.
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Consider appropriate measures for leak detection including CPM systems such as ATMOS or Telvent.
All costs to conduct a study to determine if additional leak detection measures are needed and for any resulting projects required to address leak detection deficiencies
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
MCC Module panel boards, vendor modules and skids, and cathodic protection equipment lack Arc flash labels.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Kinder Morgan and Plains sites lack arc flash labels.
All costs for installation of required Arc Flash labels, discovered through initial evaluation

Schedule VI- Page 49 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Tank 3513 - One test point location does not exhibit adequate levels of cathodic protection.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys
Wink Station, Bobcat Pipeline, and Jack Rabbit Short Haul Pipelines
Jackrabbit Station - Cathodic protection levels of the buried facility piping could not be verified as CP monitoring is not being performed on an annual basis.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys
Mason Station East
A study was conducted by Rooney Engineering after a flooding event occurred. Some upgrades were made based on the study, but similar rain events have not reoccurred yet to determine if the corrective measures were adequate. Further evaluation and additional upgrades could be required
All costs related to addressing any remaining Rooney Engineering recommendations deemed necessary for mitigation of facility flooding
Mason Station East
MCC Module, fire pump building, and warehouse building panel boards lack arc flash labels.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
Mason Station East
The aboveground storage tanks do not exhibit adequate levels of cathodic protection at some test point locations.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys
Mason Station East
Cathodic protection levels of the buried facility piping could not be verified as CP monitoring is not being performed on an annual basis.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered
TexNewMexX: Yucca & Mesquite
Mesquite & Yucca – Some MCC Module panel boards and cathodic protection equipment lack arc flash labels.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
TexNewMexX: Yucca & Mesquite
Mesquite & Yucca – Cathodic protection levels of the buried facility piping could not be verified as CP monitoring is not being performed on an annual basis.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys

10.    Jal NGL Storage Facility
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Jal
Out-of-service fractionator equipment has been abandoned in place with heat exchanger heads open, vessel manways open, open-ended piping. There is no HazCom signage (i.e. regarding confined spaces, ACM, lead-based paint) and the volume/quantity of lead based paint and ACM has not been quantified.
All costs related to conduct study to determine if tanks should be demolished and associated costs to demolish tanks, if needed
Jal
The facility siting study required under PSM is not based on the current site layout.
All costs related to evaluation of facility siting based on current site layout and for any resulting modifications required
Jal NGL Storage Facility
A number of concrete piping supports are cracked or completely broken away exposing the rebar.
All costs related to repairing identified broken concrete pipe supports

Schedule VI- Page 50 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Jal NGL Storage Facility
The rail access platform was constructed in the late 1950’s with the construction of the fractionation plant and currently would be unable to support the weight of a new safe rack gate system if future safety upgrades are required.
All costs to conduct a study of the rail access platform and for any resulting projects required to make safety improvements to meet Andeavor standards
Jal NGL Storage Facility
The LGP rail access platforms have no overhead tie-in safety system for the operators to use when accessing the top of the rail cars.
All costs related to projects to upgrade rail car racks loading platforms to ensure safe access to meet Andeavor standards
Jal NGL Storage Facility
Well-degasser needed for facility. A casing leak could lead to butane in water which settles into storage ponds for a large flashing to atmosphere scenario. If ignition source is found near pond this could lead to a vapor cloud explosion.
All costs related to evaluation of potential casing leak scenario and costs to implement recommended safe practices
Jal NGL Storage Facility
T-825 does not have a U-Stamp affixed to the vessel and will require replacement of the vessel.
All costs related to installation of a new vessel or to provide certification and U-stamp for
T-825.
Jal NGL Storage Facility
Arc flash labeling is not provided on any of the electrical equipment.
All costs for installation of required Arc Flash labels, discovered through initial evaluation
Jal NGL Storage Facility
Area classification drawings are not available.
All costs to create and stamp facility electrical area classification drawings
Jal NGL Storage Facility
No on-site water or foam supply for fire protection. Fire protection is provided by volunteer fire department with limited resources for water supply.
All costs related to making required water or foam supply modifications to comply with Andeavor fire protection standards
Jal NGL Storage Facility
No fire or gas detection is provided. Operations is particularly concerned with the lack of fire and gas detection in the pumphouse.
All costs related to performing an evaluation to determine if additional fire or gas detection is needed and for installing fixed gas detection monitors and or ESD at the pumphouse as per Andeavor standards
Jal NGL Storage Facility
A SCADA control system is not installed. All controls and interlocks are directly hardwired, and remote monitoring is not provided for operators.
All costs for installation of remote monitoring or SCADA control systems to meet Andeavor standards
Jal NGL Storage Facility
Consideration should be given to performing a PHA and evaluating the need for additional ESD valves for the wells.
All costs related to conducting a PHA study and for any required projects to address deficiencies
Jal NGL Storage Facility
Tank 825 is not equipped with any pressure instrumentation, temperature instrumentation, or automated valves. Recommend evaluating the need for additional monitoring and protection for the tank.
All costs to perform automation study and for any resulting projects to install automation instrumentation for tank 825 to meet Andeavor standards
Jal NGL Storage Facility
The booster pump and Tank 825 are not equipped with bonding jumpers.
All costs to survey facility and identify any conduit fittings missing bonding jumpers and to address deficiencies
Jal NGL Storage Facility
Some liquid-tight fittings are not installed with bonding jumpers.
All costs to survey facility and identify any conduit fittings missing bonding jumpers and to address deficiencies

Schedule VI- Page 51 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Jal NGL Storage Facility
Tank ground indication is not provided at the rail rack.
All costs related to installation of pump interlocks and ground proving (Scully) systems on rail rack to meet Andeavor standards
Jal NGL Storage Facility
Pump interlocks with the truck rack and rail rack grounding systems are not provided.
All costs to install pump interlocks and ground proving (Scully) systems on truck rack to meet Andeavor standards
Jal NGL Storage Facility
Two truck loading spots are not provided with ground indication.
All costs to install ground proving (Scully) systems on truck racks to meet Andeavor standards
Jal NGL Storage Facility
No active CP systems or monitoring program is in place for the buried facility piping. A foreign CP system is adjacent to the facility which could be cause stray current interference.
All costs related to addressing cathodic protection deficiencies after verification of cathodic protection surveys

11.     Wingate Terminal

Schedule VI- Page 52 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursement
Wingate
Secondary containment around four legacy sphere tanks has torn liner that is in need of repairs or replacement. Two spheres have containment without liners.
Once a study sphere use is complete, all costs related to conducting a study on secondary containment and for any resulting requirements to address deficiencies.
Wingate
Two artesian water wells (No. 3 and 4) have leaking casings at the tops of the well heads. The leaking water created a >1-acre wetland area that is permanently saturated. The costs to re-drill the wells would be material. A recent NMED inspection identified the need to repair the wells.
All costs for any mechanical integrity repairs to water wells No. 3 and 4 associated with recent inspection reports identifying need to redrill the water wells
Wingate Terminal
The rail access platform was constructed in the late 1950’s with the construction of the fractionation plant and currently would be unable to support the weight of a new safe rack gate system if future safety upgrades are required.
All costs to conduct a study of the rail access platform and for any resulting projects required to make safety improvements to meet Andeavor standards
Wingate Terminal
The concrete foundation under propane tank 518 has a significant crack that exposes the rebar inside the foundation and is a structural concern
All costs related to either repairing the foundation or removing the vessel
Wingate Terminal
No back-flow check valve or thermal activated automatic shutdown valve in place as required per NFPA 58.
All costs related to making upgrades to vessels to meet requirements of NFPA 58
Wingate Terminal
Seven vessels are overdue for inspection (V-400 through V-406) and one vessel (V-407) is out of service.
All costs to inspect vessels prior to their returning to product service
Wingate Terminal
The concrete foundations for the horizontal iso butane tanks 209-214 & propane tanks 508-517 are showing signs of cracking.
All costs to evaluate foundation cracking on LNG tanks 209-214 and 508-517, to determine if repairs are required, and for any resulting required LNG tank foundation repairs
Wingate Terminal
Gas detection is not provided at the spheres. Consider evaluating the need for additional gas detection.
All costs to perform a study to determine if facility is in compliance with NFPA codes and for any related projects to comply with fire codes or Andeavor standards
Wingate Terminal
One sphere does not appear to have ground bonding jumpers.
All costs to correct ground bonding jumper deficiency on sphere
Wingate Terminal
The rail rack is not equipped with ground indication or process interlocks with a grounding system.
All costs to install ground proving (Scully) systems on truck racks
Wingate Terminal
Cathodic protection levels for the buried facility piping, pressure vessels bases, and water storage tanks could not be verified as CP monitoring is not being performed on an annual basis.
All costs related to conduct an initial cathodic protection survey and for addressing any cathodic protection deficiencies discovered

12.    Elk Grove Asphalt Terminal
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Elk Grove Terminal
An unsupported vent pipe span at the polymer modified asphalt blending area is experiencing excessive movement and deflection.
All costs to conduct an engineering review of unsupported piping spans at the polymer modified asphalt blending area and to address any deficiencies identified

Schedule VI- Page 53 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Elk Grove Terminal
Rail rack piping has no expansion loops for piping flexibility. Offload pumps are located at both ends of the rail rack which act as anchors and pump nozzles could be overstressed.
All costs to conduct an engineering review of unsupported piping spans at the rail rack and address any deficiencies identified
Elk Grove Terminal
The condensate return tank (adjacent to the hot oil heaters) is vibrating excessively.
All costs to conduct an engineering review of the condensate return tank, to determine root cause of excessive vibration, and to address any deficiencies identified
Elk Grove Terminal
The retractable landings do not provide fall protection on all sides.
All costs to Implement interim mitigations to reduce risk of falls to personnel and undertake projects to address tank fall protection concerns at the truck offloading stations.
Elk Grove Terminal
No fall protection is present for personnel accessing the tops of rail cars.
All costs to Implement interim mitigations to reduce risk of falls to personnel and undertake projects to address tank fall protection concerns at the rail car.
Elk Grove Terminal
Existing vapor collection piping is reportedly plugging regularly, and the system is not adequately functioning.
All costs to investigate root cause of plugging in the vapor collection piping and for any projects required to repair
Elk Grove Terminal
The vapor collection system piping is not finished.
All costs to evaluate and complete prior project for Phase 2 installation of vapor collection systems, if required
Elk Grove Terminal
Although the site is equipped with seven cameras, the image quality is poor, and they are frequently non-functional.
All costs to conduct a security assessment to ensure compliance with Andeavor security standards and to address any gaps through a security upgrade project and to update security cameras.
Elk Grove Terminal
No arc-flash studies have been conducted and the electrical distribution equipment is not equipped with arc-flash warning labels.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
Elk Grove Terminal
Electrical drawings (One-Lines, Area Plans) and documentation are not available for the terminal. Limited project specific documents may be available.
All costs to determine if appropriate P&ID's, plot plans, isometric and electrical one-line drawings and maintenance records are in place, as well as to prepare any required documents.
Elk Grove Terminal
No automated fire or gas detection systems were observed; however, this is typical for this type of facility. Manual alarm pushbuttons are installed, but are not functional.
All costs related to performing an evaluation to determine if additional fire or gas detection is needed and for addressing any identified deficiencies in compliance with NFPA codes and Andeavor fire safety standards
Elk Grove Terminal
A control panel is available for the PMA and tank wetting systems, but no other SCADA controls are available at the terminal for remote monitoring or automated shutdowns.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards

Schedule VI- Page 54 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Elk Grove Terminal
A control panel is available for the SAAB tank gauging, but it was only operational for a short period.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Elk Grove Terminal
The emulsion tanks are not equipped with either radar or site gauges.
All costs to conduct a study to evaluate need for SCADA or similar controls for the emulsion tanks and to implement findings as per Andeavor standards
Elk Grove Terminal
Asphalt tanks are equipped with Rosemount SAAB level radar gauges, but do not have Varec local site gauges for back-up. Reportedly, there is a project to install Varec gauges. The SAAB level radar gauges are not currently able to be remotely monitored.
All costs to conduct a study to evaluate need for SCADA or similar controls on the asphalt tanks and for installation of remote monitoring or SCADA control systems, Sabb Radar gauges, Varec local gauges and remote monitoring systems per Andeavor standards
Elk Grove Terminal
Cathodic protection systems do not exist to protect select aboveground storage tank bottoms and buried facility piping in direct soil contact.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Elk Grove Terminal
The Stairs/landings/walkways at the south end of the tank farm do not include a kick plate or center guardrail, and the guardrail members are not adequately sized to resist code applied live loads. The grating and support structure appears to be undersized since the grating surface is bouncy. In addition, piping running along the landings present a tripping hazard.
All costs to  for projects required to address deficiencies with stairs, landings and walkways in the emulsion tank farm including kick plates and undersized gratings.
Elk Grove Terminal
The Stairs/landings/walkways at the Emulsion tank farm do not include a kick plate or center guardrail, and the guardrail members are not adequately sized to resist code applied live loads. The grating and support structure appears to be undersized since the grating surface is bouncy. In addition, piping running along the landings present a tripping hazard.
All costs to for projects required to address deficiencies with stairs, landings and walkways in the emulsion tank farm.
Elk Grove
The site has experienced numerous spills of asphalt. The spilled material was observed throughout the emulsion plant and the site. The non-recoverable asphalt storage area is full, and the site has begun a practice of placing non-recoverable asphalt materials onto the soil near the non-recoverable asphalt storage area.
All costs to perform initial clean up and disposal of non-recoverable asphalt as a result of historical spills across the site
Elk Grove
The on-site pre-fabricated fire pump is not compliant with NFPA 20 and the 2016 California Fire Code. The following issues were identified:

• The expose cables and battery constitute an electrical hazard;
• The condition of the pump is not adequate - leaking oil is potentially providing an additional fire hazard;
• The pump is feed by liquefied petroleum gas (LPG) which provides additional fire hazard, conditions of the electrical cables could lead to ignition. Are drive by diesel or electricity, LPG is not an acceptable medium to run a fire pump; and
• Exhaust is release inside the room allowing for the accumulation of accumulating carbon monoxide.
All costs to conduct an inspection of the fire water pump, to determine if any potential areas of non- compliance with NFPA 20 and California Fire Code exist, and for any projects required to address deficiencies

Schedule VI- Page 55 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Elk Grove
The following issues related to SPCC were identified.
A 26-inch wall surrounds the emulsion plant on three sides. The fourth side is the emulsion plant building; piping penetrations through the wall do not appear sealed, which reduces the actual containment volume. Additionally, ERM noted the following issues with containment at the asphalt plant:
• Squirrels and burrowing owls are nesting in the containment walls, affecting berm integrity (the burrowing owl is a protected species).
• Rainwater is pumped into the containment areas during times of heavy rainfall, limiting containment capacity.
All costs to evaluate SPCC issues identified and to address any deficiencies
Elk Grove
The site has experienced numerous asphalt spills. Most notable, in 2017, 125 tons of product from tank 100-M2 was released due to a tank bottom failure. The majority of the spilled materials were removed Clean Harbors. The removal of spilled material was ceased to allow for the tank to be repaired. During warm weather, asphalt seeps are observed in the former spill area. In general, spilled asphalt materials were observed on the ground throughout the emulsion plant and the site. The non-recoverable asphalt jersey barriers is overfilled and the site has begun a practice of placing non-recoverable asphalt materials onto the soil near the barriers.
All costs to perform initial clean up asphalt seeping from the area around Tank 100-M2
Elk Grove
The site has installed a RTO, with some of the piping replaced with stainless steel. The remainder of the piping needs to be replaced to allow the RTO to properly operate. Estimated cost s  for this upgrade is $400K.
All costs to complete stainless steel piping replacement on RTO

13.     Mojave Asphalt Terminal
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Mojave Terminal
The listed API 650 name plate on tanks TK-1, TK-2, TK-3, and TK-4 state the maximum operating temperature at 180 Deg. F. The current operating temperatures of all four tanks are 350 Deg F. Documentation does not exist to support the current operating temperature which is beyond the stamped tank design.
All costs to conduct engineering reviews and management of change (MOC) reviews for TK-1, TK-2, TK-3, and TK-4, to verify the maximum allowable temperature of the asphalt tanks, and to make any required updates to tank nameplates and provide documentation of change
Mojave Terminal
High level alarms for storage tanks do not exist. Tank gauging equipment and infrastructure are in place.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Mojave Terminal
Active below ground lines are present in facility (rail offload rack). No existing cathodic protection systems in place or inspection programs.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Mojave Terminal
The retractable landings do not provide fall protection on all sides.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at the truck offloading stations.

Schedule VI- Page 56 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Mojave Terminal
No fall protection is present for personnel accessing the tops of rail cars.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns from the tops of rail cars.
Mojave Terminal
Existing thermal oxidizer system does not function correctly. May be undersized. Operations indicated it does not pull enough vacuum. Currently not being used.
All costs to conduct a review of the Thermal Oxidizer operational issues and for any upgrades required to improve operation if required to be in service.
Mojave Terminal
The terminal is not equipped with cameras or automated gates.
All costs to conduct a security assessment to ensure compliance with Andeavor security standards and to address any gaps through a security upgrade project
Mojave Terminal
No arc-flash studies have been conducted and the electrical distribution equipment is not equipped with arc-flash warning labels.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
Mojave Terminal
Electrical drawings (One-Lines, Area Plans) and documentation are not available for the terminal. Project specific documents may be available.
All costs to determine if appropriate P&ID's, plot plans, isometric and electrical one-line drawings and maintenance records are in place, as well as to prepare any required documents.
Mojave Terminal
A SCADA control system does not exist for the terminal.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Mojave Terminal
Cathodic protection monitoring is not being performed to evaluate the levels of cathodic protection on the aboveground storage tank bottoms and buried facility piping in direct soil contact.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Mojave Terminal
An Andeavor Entity owned and DOT regulated out of service or abandoned underground pipeline segment is located on the terminal. Documents were not available for review to determine if the pipeline was properly abandoned or taken out of service. Reportedly the pipeline was pigged clean and purged with Nitrogen.
All costs to conduct a review of pipeline abandonment records and to conduct any corresponding additional inspections required to verify if pipeline was properly abandoned
Mojave Terminal
The tank containment dikes are not outfitted with stair styles for access over the berms or over some piping at the rail rack. Lack of stairs presents a slip/fall hazard.
All costs to Implement interim mitigations to reduce risk of falls to personnel and undertake projects to address tank fall protection concerns including installation of stairways at tank farm berms and rail car stations.

14.     Phoenix Asphalt Terminal

Schedule VI- Page 57 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Phoenix Terminal
Tank 4, 102 and 202 contain patch plates which do not appear to meet API 653 repair standards. No radius present at patch corners, and vertical welds are within 6" of each other.
All costs to inspect tanks for compliance with API 653 repair standards and to address any deficiencies with patch plates on tanks 4, 102 & 202
Phoenix Terminal
Some tanks share a common stair to access the tank roofs. Walkways, guardrails, or tie-off points for fall protection to access vent hoods, gage hatches, etc. are not present.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at stair access and tank roofs.
Phoenix Terminal
The retractable landings do not provide fall protection on all sides.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at truck loading racks.
Phoenix Terminal
No fall protection is present for personnel accessing the tops of rail cars.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns on tops of rail cars.
Phoenix Terminal
No arc-flash studies have been conducted and the electrical distribution equipment is not equipped with arc-flash warning labels.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
Phoenix Terminal
Electrical drawings (One-Lines, Area Classification) and documentation are not available for the terminal. The area classification around the diesel and jet tanks and process piping should be reviewed and the suitability of the installed electrical equipment verified.
All costs to conduct a study to verify the suitability of installed electrical equipment around the diesel and jet tanks relative to area electrical classification standards and to create electrical one-line drawings and Area Classification drawings, if required
Phoenix Terminal
A SCADA control system does not exist for the terminal.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Phoenix Terminal
Tanks are not equipped with any remote monitoring, alarms, or interlocks to prevent tank overfill.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Phoenix Terminal
Additional software is required to monitor the wireless Rosemount tank level transmitters from the main office.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Phoenix Terminal
Cathodic protection systems do not exist to protect select aboveground storage tank bottoms and buried facility piping in direct soil contact.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Phoenix Terminal
Stair rise/run at the stair style over the tank containment dike wall north of Tank 50001 varies, presenting a trip/fall hazard to personnel.
All costs to conduct a safety assessment of the stairs and to address any safety concerns identified at the stairway north of tk-550001

Schedule VI- Page 58 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Phoenix
Underground vaults and drains are located at the site. Reportedly, the vaults discharge to the stormwater pond. However, piping was not observed at this discharge location. A piping drawing for underground lines does not exist according to site personnel. Facility personnel are unaware where the stormwater is discharging.
All costs to conduct a study to determine whether underground vaults are connected to the stormwater retention basin, to understand stormwater permitting requirements, and to address any deficiencies identified
Phoenix
According to the information provided, the on-site sewer may require cleaning due to blockage from calcium carbonate buildup and potentially need to be repaired or replaced. Previous estimates to replace the sewer line were approximately $250,000.
All costs to evaluate condition of underground sewer and to repair or replace, if required at the boiler area.
Phoenix
The site has installed a covered storage area for hazardous materials. The storage area is still in the process of being fully permitted and a sprinkler system is required by the local fire marshal. The site is actively using the storage area for hazardous materials storage.
All costs to install sprinkler system in the new storage building if required by building permit, local fire standards, or Andeavor hazardous materials storage management practices

15.     Bakersfield Asphalt Terminal
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Bakersfield Terminal
Some tanks share a common stair to access the roofs with no walkways, guardrails, or tie-off points for fall protection to access vent hoods, gage hatches, etc. In particular, operators must access tanks 17-20 gauge hatches on a daily basis. Access to the gauge hatches requires operators to leave the rooftop walkway system and work near tank edges with no guardrails or fall protection present.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns from stair access and tops of tanks.
Bakersfield Terminal
High level alarms for storage tanks do not exist. Tank gauging equipment and infrastructure are in place.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Bakersfield Terminal
Heat exchanger for asphalt product is not functioning properly and needs to be evaluated.
All costs to conduct an engineering study to determine if heat exchanger is operating per design and to address recommended upgrades if any are required
Bakersfield Terminal
Steam piping at rail rack shows signs of movement from thermal expansion. Additional shoes have been added to avoid pipe from dropping off support. Expansion loops should be considered in steam piping.
All costs to review piping at the rail rack to ensure there are adequate supports to prevent the piping from falling off the rack and to address deficiencies identified
Bakersfield Terminal
Active below ground lines are present in facility (rail offload rack). No existing cathodic protection systems in place or inspection programs.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Bakersfield Terminal
The retractable landing at emulsion rack 1 is heavily damaged with broken/bent rails. The landing is currently being used for accessing tops of trucks.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at emulsion tank 1.

Schedule VI- Page 59 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Bakersfield Terminal
The retractable landings at lanes 1, 4 & 5 include a scaffold system for personnel fall protection tie-off. The scaffold system does not appear to be adequately sized to support minimum OSHA load requirements, and is not inspected on a frequent basis by certified scaffold inspectors.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at truck rack lanes
Bakersfield Terminal
No fall protection is present for personnel accessing the tops of rail cars.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns from tops of rail cars.
Bakersfield Terminal
The vapor recovery and control system is inadequate to recover emissions from the asphalt tanks to prevent nuisance odor complaints from the community. Some tanks are not piped to the vapor recovery system.
All costs to conduct an engineering review of the vapor recovery piping and thermal oxidizer to ensure adequacy to capture all emissions from the tanks and to make any repairs needed
Bakersfield Terminal
No arc-flash studies have been conducted and the electrical distribution equipment is not equipped with arc-flash warning labels.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
Bakersfield Terminal
Electrical drawings (One-Lines, Area Plans) and documentation are not available for the terminal. Limited project specific documents may be available.
All costs to determine if appropriate P&ID's, plot plans, isometric and electrical one-line drawings and maintenance records are in place, as well as to prepare any required documents.
Bakersfield Terminal
No automated fire or gas detection systems were observed, however this is typical for this type of facility.
All costs related to performing an evaluation to determine if additional fire or gas detection is needed and for addressing any identified deficiencies in compliance with NFPA codes and Andeavor fire safety standards
Bakersfield Terminal
A SCADA control system does not exist for the terminal.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Bakersfield Terminal
Tanks are not equipped with any remote monitoring, alarms, or interlocks to prevent tank overfill.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Bakersfield Terminal
Only one emulsion tank is equipped with a visual gauge. The asphalt tanks are only equipped with SAAB radar and no site gauges are available for comparison.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
Bakersfield Terminal
Cathodic protection systems do not exist to protect select aboveground storage tank bottoms and buried facility piping in direct soil contact.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Bakersfield Terminal
The guardrail of the stairs accessing the south side of truck loading lanes 4 & 5 is broken, presenting a fall hazard. In addition, no midrail is present at the stair and kick plate are missing.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns on lanes 4 & 5 guardrails, midrails and stairways.

Schedule VI- Page 60 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Bakersfield Terminal
The corrugated metal pipe vaults at the below ground piping transitions inside the tank farm and at the rail rack are not covered and present a fall hazard to personnel.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall hazards associated with corrugated metal pipe vaults at the below ground piping transitions inside the tank farm and at the rail rack
Bakersfield Terminal
Access ladders at tank T-10 exceed OSHA height limits without intermediate landings and do not include safety cages or fall protection devices.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address OSHA height limits of Access ladders at tank T-10 including safety cages and fall protection devices.
Bakersfield
An asbestos and lead survey was completed for the old lab and operations buildings. The survey indicated presence of asbestos as well as external green and white paints containing high lead contents. The external paint was observed in very poor and peeling conditions.
All costs to demolish existing buildings and replace with new, if required per Andeavor standards as result of reviewing findings from asbestos and lead survey
Bakersfield
A large quantity of super sacks is stored outside exposed to the sun. This material has been known to spontaneously ignite under high temp conditions. These materials need to be stored properly in sheds or covered storage areas.
All costs to identify safe storage requirements for all chemicals at the site and to address any safe storage deficiencies
Bakersfield
Site relies on a groundwater well for potable and process water. Reportedly, there is a well approximately 700 ft. deep (water level at about 500 ft.), with a submersible pump, installed around September 2013. There is a second well not in use and locked shut with the casing damaged (slots corroded, and sand has infiltrated the well). The site was unaware of any well abandonment, potable water testing or drinking water requirements.
All costs to test water on active well to verify it is potable, to connect facility to City water service if required, and to abandon water well per California Department of Water Resource regulations Health & Safety Code Section 115700, if required
Bakersfield
The following issues related to Air Permit compliance were observed:
- The permit requires continuous use of a vapor control system (either carbon drums or thermal oxidizer) whenever tank contains or is being loaded with asphalt products. However, based on site observations the thermal oxidizer system is not in use and facility personnel reported the system was non-operational.
- Facility has tendency to manually modify the design of the boilers in the event that it fails. This practice is not encouraged because it could lead to non-compliance with permit conditions.
- Rental loader was found on site. They need to be registered in the CARB system (DOORS) if used for longer than 1 year.
All costs to evaluate noted air permit compliance issues and to make necessary upgrades to the facility vapor recovery equipment based on permitting requirements

16.     All Asphalt Terminals
Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
All Sites
Inadequate fall protection at the truck loading racks as well as other areas within the sites. It should be noted that the Fernley truck rack is equipped with cages.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns per Andeavor standards

Schedule VI- Page 61 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
All Sites
The sites lack a comprehensive fire safety program. Fire safety issues identified included:

• No fire detection systems are in place and facility personnel rely on fire extinguishers for fire protection.
• No active or adequate fire suppression systems are in place.
• No response agreements are in place with local fire departments, nor do the facilities actively engage, or exercise, with emergency responders.
• With the exception of Phoenix, fire hydrants fed by municipal water are not inspected on a regular basis. The facility representative indicated that inspections are conducted, but that documentation is not maintained regarding the inspections.
• Hazardous area classification assessments have not been conducted at the sites and numerous ignition sources are present.
• Manual call points installed on-sites are disabled and not functioning. Therefore the call points will not activate any general alarm in the event of an emergency. No provisions have been implemented to fix the system.
All costs related to performing an evaluation to determine if additional fire or gas detection is needed and for addressing any identified deficiencies in compliance with NFPA codes and Andeavor fire safety standards
All Sites
With limited exceptions, operations are performed manually, with no automation (e.g. MOVs, high level alarms, automated shut down devices, etc.).
Overfill prevention is based on correct calculation of loading time based on the level before loading. The operator is required to perform level monitoring with manual gauges on top while loading is performed. Numerous tanks showed evidence of previous overfill events.
All costs to conduct a study to evaluate need for SCADA or similar controls and to implement findings as per Andeavor standards
All Sites
No arc flash studies have been performed at the sites.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
All Sites
According to information provided, over 90 tanks are past tank inspection due dates. With few exceptions, all tanks are single bottomed without means of detecting a tank bottom failure.
All costs to address overdue tank inspections as per API 653 and to address any deficiencies identified
All Sites
With the exception of Mojave, the following issues have been identified with respect to secondary containment with the exception of Mojave:
-capacity of secondary containment areas appears inadequate at many locations
-tanks were observed without secondary containment
-secondary berms are eroding and do not have preventative maintenance programs
-spill pans are not used during rail car unloading
All costs to conduct a review of SPCC plans and to address any deficiencies identified which are required to comply with SPCC requirements
All Sites
Boiler blow down at the sites is discharged to the ground or an impoundment. The sites are unaware of permitting requirements for this activity. Additionally, boiler blow down discharge on bare ground could lead to subsurface contamination.
All costs to review boiler blowdown permitting requirements, to obtain permits required to discharge boiler blowdown water to the stormwater pond if required, or to make other modifications needed for safe, compliant blowdown practices


Schedule VI- Page 62 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




17.    Fernley Asphalt Terminal - Upon mutual consent on project scope between the applicable Andeavor Entities and the applicable members of Partnership Group, the applicable Andeavor Entities shall reimburse the Partnership Group for 50% [amount equal to Andeavor ownership at time of drop down closing] of the expense and capital costs incurred for the execution of the following Andeavor Reimbursements identified in the table below. For all reimbursements in which a study, evaluation, inspection or review must first be performed, such activity must be conducted within 24 months of the Effective Date in order to be subject to Andeavor reimbursement.

Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Fernley Terminal
Some tanks share a common stair to access the tank roofs. Walkways, guardrails, or tie-off points for fall protection to access vent hoods, gage hatches, etc. are not present.
All costs to implement interim mitigations to reduce risk of falls and for any projects to address tank fall protection concerns from tank roofs and stair access points
Fernley Terminal
No fall protection is present for personnel accessing the tops of rail cars.
All costs to implement interim mitigations to reduce risk of falls and for any projects to address tank fall protection concerns from rail cars.
Fernley Terminal
Security cameras are not provided.
All costs to conduct a study/evaluation to determine security camera needs and for any projects to address identified deficiencies in Andeavor Security Standards
Fernley Terminal
The terminal entrance gate is not equipped with badge readers.
All costs to conduct security assessment and to address deficiencies relative to access gate badge readers as they relate to Andeavor security standards.
Fernley Terminal
No arc-flash studies have been conducted and the electrical distribution equipment is not equipped with arc-flash warning labels.
All costs for installation of required Arc Flash labels and other recommendations per Andeavor standards, discovered through initial evaluation
Fernley Terminal
Electrical drawings (One-Lines, Area Plans) and documentation are not available for the terminal.
All costs to determine if appropriate P&ID's, plot plans, isometric and electrical one-line drawings and maintenance records are in place, as well as to prepare any required documents.
Fernley Terminal
An underground electrical vault recently caught on fire and needed replacement. The root cause should be investigated and mitigated for all underground cabling.
All costs to conduct an investigation to determine cause of electrical vault fire and to implement projects to address findings to prevent future incidents
Fernley Terminal
No automated fire or gas detection systems were observed; however this is typical for this type of facility.
All costs related to performing an evaluation to determine if additional fire or gas detection is needed and for addressing any identified deficiencies in compliance with NFPA codes and Andeavor fire safety standards

Schedule VI- Page 63 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Site
3 rd  Party Contractor Identified Risk
Andeavor Reimbursements
Fernley Terminal
A SCADA system is available for the storage tanks, but it is only visible from the local HMI located on the PLC at the terminal and not in the main office.
All costs to conduct a study to evaluate need for SCADA or similar controls on storage tanks and to implement findings as per Andeavor standards
Fernley Terminal
Tanks are not equipped with any remote monitoring, alarms, or interlocks to prevent tank overfill. Tank levels are displayed locally on a PLC HMI, but only text appears when a tank level is high. No shutdowns or audible alarms are in place.
All costs to conduct a study to evaluate need for SCADA or similar controls and for installation of remote monitoring or SCADA control systems, as needed.
Fernley Terminal
Cathodic protection systems do not exist to protect select aboveground storage tank bottoms and buried facility piping in direct soil contact.
All costs to conduct a Cathodic Protection survey and to make recommended repairs to address deficiencies as per Andeavor standards
Fernley Terminal
The stair styles and landings at the rail loading rack do not have guardrail on all sides. Landings are greater than 30" above adjacent grade and require rails for personnel fall protection.
All costs to implement interim mitigations to reduce the risk to personnel and undertake projects to address fall protection concerns at the rail loading rack.
Fernley
The facility does not have a general alarm system to warn personnel on an incident. The emergency response plan indicates that the facility has a general alarm, but this is not accurate based on a review of the site.
All costs for review of Emergency Response Plan and for any modifications needed to comply with Andeavor standards and requirements of Emergency Response Plan including installation of emergency alarm systems

    

Schedule VI- Page 64 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule VII
Contribution Agreements, Other Transactions and Applicable Terms
Initial Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement, dated as April 26, 2011, among the Partnership, the General Partner, the Operating Company, Andeavor, Tesoro Alaska, TRMC and Tesoro High Plains Pipeline Company LLC
April 26, 2011
April 26, 2013
April 26, 2016
TRMC and Tesoro Alaska
TRMC
April 26, 2021
Yes


Schedule VII- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Amorco Contribution Agreement

Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement dated as of April 1, 2012, among the Partnership, the General Partner, the Operating Company, Tesoro and TRMC
April 1, 2012
April 1, 2014
April 1, 2017
TRMC
TRMC
April 1, 2022
Yes


Schedule VII- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Long Beach Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of September 14, 2012, among the Partnership, the General Partner, the Operating Company, Andeavor and TRMC
Execution Date is September 14, 2012, and various Effective Times are upon receipt of the Long Beach Approval, the CDFG Approval and the Other Approvals as set forth in the agreement, as applicable
September 14, 2014
September 14, 2017
TRMC
TRMC
September 14, 2022
Yes


Schedule VII- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Anacortes Rail Facility Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of November 15, 2012, among the Partnership, the General Partner, the Operating Company, Andeavor and TRMC
November 15, 2012
November 15, 2014
November 15, 2017
TRMC
TRMC
November 15, 2022
No


Schedule VII- Page 4 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




BP Carson Tranche 1 Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of May 17, 2013, among the Partnership, the General Partner, the Operating Company, Andeavor and TRMC
June 1, 2013
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
No


Schedule VII- Page 5 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




BP Carson Tranche 2 Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of November 18, 2013, among the Partnership, the General Partner, the Operating Company, Andeavor, TRMC and Carson Cogeneration Company
December 6, 2013
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
No


Schedule VII- Page 6 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




West Coast Assets Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement executed as of June 23, 2014, among the Partnership, the General Partner, the Operating Company, Tesoro Logistics Pipelines LLC, Andeavor, TRMC and Tesoro Alaska
First Closing Date: July 1, 2014
Second Closing Date has the meaning set forth in the Contribution Agreement
The second (2 nd ) anniversary of the First Closing Date or the Second Closing Date, as applicable

With respect to Section 3.1(a): Not applicable
With respect to Section 3.2: The fifth (5 th ) anniversary of the First Closing Date or the Second Closing Date, as applicable
Andeavor, TRMC, Tesoro Alaska
Andeavor, TRMC, Tesoro Alaska
The tenth (10 th ) anniversary of the First Closing Date or the Second Closing Date, as applicable.
Yes

Schedule VII- Page 7 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




2015 Line 88 and Carson Tankage Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of November 12, 2015, among the Partnership, the General Partner, the Operating Company, Tesoro SoCal Pipeline Company LLC, Andeavor, TRMC and Carson Cogeneration Company
November 12, 2015
November 12, 2017
November 12, 2020
Andeavor, TRMC, Carson Cogen
Andeavor, TRMC, Carson Cogen
November 12, 2025
Yes


Schedule VII- Page 8 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




2016 Alaska Assets Contribution Agreement
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016, among the Partnership, the General Partner, the Operating Company, Tesoro Alaska Company LLC, and Andeavor
KENAI TANKAGE
July 1, 2016
July 1, 2018

July 1, 2021
Tesoro Alaska Company LLC
Not applicable
July 1, 2026
Yes
Contribution, Conveyance and Assumption Agreement effective as of July 1, 2016, among the Partnership, the General Partner, the Operating Company, Tesoro Alaska Company LLC, and Andeavor
ANCHORAGE AND FAIRBANKS TERMINALS
September 16, 2016
September 16, 2018
September 16, 2023
Tesoro Alaska Company LLC
Not applicable
September 16, 2026

Yes





Martinez Assets Contribution Agreement

Schedule VII- Page 9 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of November 21, 2016, among the Partnership, the General Partner, the Operating Company, TRMC and Andeavor
November 21, 2016
November 21, 2018
November 21, 2021
TRMC
Not applicable
November 21, 2026
Yes



Schedule VII- Page 10 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





For Assets owned by Western Refining, Inc. and Western Refining Logistics LP and their subsidiaries prior to the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:

Pre-Merger Agreement WNRL Assets
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder
October 30, 2017
Not Applicable  
Not Applicable
Not Applicable
Not Applicable
Not Applicable
No



Schedule VII- Page 11 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




2017 Anacortes Assets Contribution Agreement

Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of November 8, 2017, among the Partnership, the Operating Company, TRMC and Andeavor
November 8, 2017
November 8, 2019
November 8, 2022
TRMC
Not applicable
November 8, 2027
Yes










2018 Assets Contribution Agreement

Schedule VII- Page 12 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Refinery storage, rail, truck, Legacy Western Permian/4-Corners, Clearbrook tankage, Great Plains/BakkenLink
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of August 6, 2018 (the “2018 Assets Contribution Agreement”), among the Partnership, the Operating Company, TRMC, Western Refining Southwest, Inc. (“WRSW”), Andeavor and the other parties thereto, insofar as it covers the Group B Assets [Bobcat Pipeline, Benny Pipeline, Mesquite Truck Station, Yucca Truck Station, Mason East Station, Wink Station], Group C [Wingate Terminal], Group D Assets [Clearbrook Tankage], Group E [assets associated with Mandan Refinery, Salt Lake Refinery, LARC Refinery Unit and LARW Refinery Unit], and TGPM Units (as such terms are defined in the 2018 Assets Contribution Agreement)  
August 6, 2018
August 6, 2020
August 6, 2023
TRMC
WRSW
Western Refining Company, L.P. (“WRCLP”)
Not applicable
August 6, 2028
Yes

Schedule VII- Page 13 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





Aranco Pipeline, Jal NGL Storage Facility
 
 
 
 
 
 
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of August 6, 2018, among the Partnership, the Operating Company, TRMC, WRSW, Andeavor and the other parties thereto, insofar as it covers the Group A Assets [Jal NGL Storage Facility] and the Group G Assets [Aranco Pipeline]
August 6, 2018
Not applicable
Not applicable
Not applicable
Not applicable
August 6, 2028
No

 
 
 
 
 
 
 
 
LA Refinery Interconnecting Pipeline, Conan, Rio Pipeline, Asphalt Terminals, MPL
 
 
Contribution Agreement
Closing Date
First Deadline Date
Second Deadline Date
Andeavor Indemnifying Parties
Andeavor Indemnified Parties
Third Deadline Date
Omnibus Section 5.1(b) Applies
Contribution, Conveyance and Assumption Agreement effective as of August 6, 2018, among the Partnership, the Operating Company, TRMC, WRSW, Andeavor and the other parties thereto, insofar as it covers the Group F Assets [LA Refinery Interconnecting Pipeline], the MPL Units, WRCG Units, WRDBS Units, ATL Units, and Andeavor Rio Units (as such terms are defined in the 2018 Assets Contribution Agreement)
August 6, 2018
Not applicable
Not applicable
Not applicable
Not applicable
August 6, 2028
No*
* Special indemnities per Schedule IX
 
 
 
 
 
 
 


Schedule VII- Page 14 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement




Schedule VIII
Administrative Fee and Indemnification Deductibles
Monthly Administrative Fee
$1,383,333
Annual Environmental Deductible
$1,000,000

Annual ROW Deductible
$1,000,000



Schedule VIII- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement





Schedule IX
Special Indemnification Provisions
For Initial Contribution Agreement listed on Schedule VII :

None.

For Amorco Contribution Agreement listed on Schedule VII :


Addition to Right of Way Indemnification
. As of the Closing Date for the Amorco Contribution Agreement, TRMC shall own the leasehold rights in the “Wharf Lease” issued by the California State Lands Commission and the easements, rights of way and permits for the “SHPL,” all as defined in the Amorco Contribution Agreement, and the Partnership Group shall provide operational, maintenance and management services with respect to such Assets pursuant to the MTUTA. Title to Wharf Lease rights and the SHPL are scheduled to be contributed to the Partnership Group at a later date, as set forth in the Amorco Contribution Agreement. The Right of Way Indemnification set forth in Section 3.2 herein applies to the extent that a Loss arises with respect to a Partnership Group Member’s interests under the MTUTA before title to such Assets is contributed to the Partnership Group Member or with respect to a Partnership Group Member’s failure to become the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in such Assets after they are finally contributed to the Partnership Group as contemplated in the Amorco Contribution Agreement. The Closing Date provided for in this Agreement shall be as set forth above, without regard to when title to these Assets is finally contributed to a Partnership Group Member.
For Long Beach Contribution Agreement listed on Schedule VII :


Addition to Right of Way Indemnification
. As of the Closing Date for the Long Beach Contribution Agreement, TRMC shall own the leasehold rights in the “Terminal Lease” issued by the Port of Long Beach and the easements, rights of way and permits for the “Terminal Pipelines,” all as defined in the Long Beach Contribution Agreement, and the Partnership Group shall provide operational, maintenance and management services with respect to such Assets pursuant to the Long Beach Operating Agreement, as defined in the Long Beach Contribution Agreement. Title to Terminal Lease rights and the Terminal Pipelines are scheduled to be contributed to the Partnership Group at a later date, as set forth in the Long Beach Contribution Agreement. The Right of Way Indemnification set forth in Section 3.2 herein applies to the extent that a Loss arises with respect to a Partnership Group Member’s interests under the BAUTA before title to such Assets is contributed to the Partnership Group Member or with respect to a Partnership Group Member’s failure to become the owner of such valid and indefeasible easement rights or fee ownership or leasehold interests in such Assets after they are finally contributed to the Partnership Group as contemplated in the Long Beach Contribution Agreement. The Closing Date provided for in this Agreement shall be as set

Schedule IX- Page 1 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


forth above, without regard to when title to these Assets is finally contributed to a Partnership Group Member.

Schedule IX- Page 2 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


For Anacortes Rail Facility Contribution Agreement listed on Schedule VII :

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Anacortes Track Use and Throughput Agreement among the General Partner, the Partnership, the Operating Company and TRMC, (iii) the Anacortes Mutual Track Use Agreement among the General Partner, the Partnership, the Operating Company and TRMC, and (iv) the Ground Lease between TRMC and the Operating Company, all dated as of November 15, 2012, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement.  For the avoidance of doubt, the indemnification provisions of the Fourth Amended and Restated Omnibus Agreement shall be subordinate to the respective indemnification provisions of each of the other agreements referenced above.

For BP Carson Tranche 1 Contribution Agreement listed on Schedule VII :

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the BP Carson Tranche 1 Contribution Agreement listed on Schedule VII , (iii) the Master Terminalling Services Agreement – Southern California among TRMC, the General Partner, the Partnership and the Operating Company dated as of June 1, 2013, as amended, and (iv) the Carson Storage Services Agreement among TRMC, the General Partner, the Partnership and the Operating Company dated as of June 1, 2013, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement.  In the event of a conflict of provisions of any of the above-referenced agreements and the Carson Assets Indemnity Agreement, the provisions of the Carson Assets Indemnity Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements. Notwithstanding anything to the contrary in the Fourth Amended and Restated Omnibus Agreement, the indemnification provisions of Sections 3.2 and 3.5 thereof shall not apply to the Assets as defined in the BP Carson Tranche 1 Contribution Agreement listed on Schedule VII .


Schedule IX- Page 3 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


For BP Carson Tranche 2 Contribution Agreement listed on Schedule VII :

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the BP Carson Tranche 2 Contribution Agreement listed on Schedule VII , (iii) the Amended and Restated Master Terminalling Services Agreement – Southern California among TRMC, the General Partner, the Partnership and the Operating Company dated as of December 6, 2013, (iv) the Long Beach Storage Services Agreement among TRMC, the General Partner, the Partnership and the Operating Company dated as of December 6, 2013, (v) the Berth 121 Operating Agreement between the Operating Company and Carson Cogeneration Company, dated as of December 6, 2013, (vi) the Terminals 2 and 3 Operating Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (vii) the Amended and Restated Long Beach Berth Access Use and Throughput Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (viii) the Long Beach Berth Throughput Agreement among the Partnership, the General Partner, the Operating Company, TRMC and Carson Cogeneration Company, dated as of December 6, 2013, (ix) the SoCal Transportation Services Agreement between TRMC and Tesoro SoCal Pipeline Company LLC, dated as of December 6, 2013, (x) the Long Beach Pipeline Throughput Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (xi) the Carson Coke Handling Services Agreement among the Partnership, the General Partner, the Operating Company and TRMC, dated as of December 6, 2013, (xii) the Coke Barn Lease Agreement between the Operating Company and TRMC, dated as of December 6, 2013 and (xiii) the Terminals 2 and 3 Ground Lease between the Operating Company and TRMC, dated as of December 6, 2013, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement.  In the event of a conflict of provisions of any of the above-referenced agreements and the Carson Assets Indemnity Agreement, the provisions of the Carson Assets Indemnity Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.


Schedule IX- Page 4 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement



For West Coast Assets Contribution Agreement listed on Schedule VII:

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Terminalling Services Agreement – Nikiski, among the General Partner, the Partnership, the Operating Company and Tesoro Alaska, (iii) the Terminalling Services Agreement – Anacortes, among the General Partner, the Partnership, the Operating Company and TRMC, (iv) the Terminalling Services Agreement – Martinez, among the General Partner, the Partnership, the Operating Company and TRMC, and (v) the Storage Services Agreement – Anacortes, the Terminalling Services Agreement – Anacortes, among the General Partner, the Partnership, the Operating Company and TRMC, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

For 2015 Line 88 and Carson Tankage Contribution Agreement listed on Schedule VII:

Other . Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Carson II Storage Agreement, and (iii) Amendment No. 1 to the (SoCal) Transportation Services Agreement dated November 12, 2015, between TRMC and Tesoro SoCal Pipeline Company LLC, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

For 2016 Alaska Assets Contribution Agreement listed on Schedule VII:

The Partnership Group agree that, after the Effective Date, they shall not knowingly breach any covenants of TAC contained in that certain Asset Purchase Agreement dated as of November 20, 2015 by and between Flint Hills Resources Alaska, LLC and TAC (the “Flint Hills APA”) as if the Partnership Group were parties thereto instead of TAC.

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Kenai Storage Services Agreement, and (iii) the Alaska Terminalling Services Agreement, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the

Schedule IX- Page 5 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

Notwithstanding any other provisions of the Fourth Amended and Restated Omnibus Agreement, the indemnification obligations of the Andeavor Entities under Section 3.1(a) of the Fourth Amended and Restated Omnibus Agreement with regard to the 2016 Environmental Consent Decree are limited to reimbursement for any capital expenditures that the Partnership Group may be required to make to comply therewith and any fines or other penalties which may be levied for any failure therewith (except to the extent such fines or other penalties are the result of the failure of the Partnership Group to comply therewith with regard to the contributed assets) and such indemnification obligations shall extend to or cover any increased ongoing operating or maintenance expenses incurred by the Partnership Group in connection with their compliance therewith.

For Martinez Assets Contribution Agreement listed on Schedule VII:

Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Martinez Storage Services Agreement, dated as of November 21 2016, between TRMC and the Operating Company; (iii) the Avon Marine Terminal Operating Agreement, dated as of November 21 2016, between TRMC and the Operating Company; (iv) the License Agreement, dated as of November 21 2016, between TRMC and the Operating Company; and (v) the Avon Marine Terminal Sublease Agreement and the Avon Marine Terminal Use and Throughput Agreement to be entered into between TRMC and the Operating Company pursuant to Section 2.5 of the Martinez Assets Contribution Agreement, the parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

For Assets owned by WNRL on the Closing Date of the Merger Agreement and acquired by the Partnership pursuant to the Merger Agreement by virtue of its acquisition of WNRL thereunder:

Notwithstanding any other provisions of the Fourth Amended and Restated Omnibus Agreement, the Parties hereto agree that the indemnification provisions in Article VI of the SERA shall control and prevail over any of the provision of the Fourth Amended and Restated Omnibus Agreement, other than Section 3.5(b), and shall be the exclusive provisions for all indemnification obligations relating to the subject matter of the indemnities so provided in Article VI of the SERA.





Schedule IX- Page 6 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


For 2017 Anacortes Assets Contribution Agreement listed on Schedule VII:

1.    Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Anacortes Storage Services Agreement – Anacortes II, dated as of November 8, 2017, between TRMC and the Operating Company; (iii) the Anacortes Marine Terminal Operating Agreement, dated as of November 8, 2017, between TRMC and the Operating Company; (iv) the Pipeline Transportation Services Agreement – Anacortes Short Haul Pipelines dated as of November 8, 2017, between TRMC and the Operating Company, (v) the Ground Lease dated as of November 8, 2017, between TRMC and the Operating Company with respect to the real property underlying the Tankage; (vi) the Second Amendment dated as of November 8, 2017, to that certain Ground Lease between TRMC and the Operating Company relating to a portion of the Anacortes Refinery dated as of November 15, 2012, (vii) the First Amendment dated as of November 8, 2017, to that certain Ground Lease between TRMC and the Operating Company relating to a portion of the Anacortes Refinery dated as of July 1, 2014, (viii) the Sublease Rights and Escrow Agreement between TRMC and the Operating Company dated as of November 8, 2017 and (ix) the Anacortes Marine Terminal Use and Throughput Agreement to be entered into between TRMC and the Operating Company pursuant to Sublease Rights and Escrow Agreement, the Parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements.

2.    The expenses reimbursable to the Partnership Group for repairs and maintenance of any aboveground storage tanks, included within the Assets conveyed, contributed or otherwise transferred pursuant to the 2017 Anacortes Contribution Agreement (“2017 Anacortes Storage Tanks”), under Section 5.1(b) of the Fourth Amended and Restated Omnibus Agreement required to bring any of the 2017 Anacortes Storage Tanks into compliance with API Standard 653 shall include the expense of any required earthwork (such as new sandbeds) to restore such storage tanks to active service; provided that such expenses shall not include any expenses for Covered Environmental Losses, which shall continue to be governed by Section 3.1 of the Fourth Amended and Restated Omnibus Agreement and the provisions of paragraph 3 below.
3.    For any of the 2017 Anacortes Storage Tanks for which the first API 653 internal inspection has not been completed prior to the fifth anniversary of the applicable Closing Date, the Operating Company shall conduct a detailed review of all available inspection records or other reports applicable to such storage tanks and shall make inspections of the visible external condition of the tanks prior to such fifth anniversary of the applicable Closing Date. If such review and inspection indicates, in the reasonable judgment of the Operating Company, that there exists a reasonable concern regarding the structural integrity of any such tank, then:
(a)    The Operating Company shall provide written notice of such reasonable concern to TRMC, including a detailed description of the Operating Company’s reasons for such concern;

Schedule IX- Page 7 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


(b)    The Operating Company shall schedule the first API 653 internal inspection of any such tank at the soonest practical date; and
(c)    The Identification Deadline with regard to any Covered Environmental Losses caused by any release from such tank first identified at the time of such first API 653 internal inspection of such tank shall be extended for a period of sixty (60) days following the completion of such first API 653 internal inspection of such tank.
For 2018 Assets Contribution Agreement listed on Schedule VII:

Defined terms used in this portion of Schedule IX without definition will have the meaning given such terms in the 2018 Assets Contribution Agreement.

1.    Notwithstanding any other provisions of (i) the Fourth Amended and Restated Omnibus Agreement, (ii) the Master Terminaling Services Agreement, dated as of August 6, 2018, by between those parties identified as “Providers” and those identified as “Customers” on Schedule I thereto, (iii) Transportation Services Agreement (LAR Interconnecting Pipelines) dated August 6, 2018, by and between Tesoro SoCal Pipeline Company LLC and Tesoro Refining & Marketing Company LLC, (iv) Construction Service Agreement (Los Angeles Refinery Interconnecting Pipelines) dated August 6, 2018, by and between Tesoro SoCal Pipeline Company LLC and Tesoro Refining & Marketing Company LLC, (v) Asphalt Terminalling, Transportation and Storage Services Agreement dated August 6, 2018, by and between Western Refining Company, L.P. and Asphalt Terminals LLC, (vi) Master Unloading and Storage Agreement dated August 6, 2018, by and between Western Refining Pipeline, LLC and Western Refining Company, L.P., (vii) Special Warranty Deed for Clearbrook dated August 6, 2018, between WRSW and the Operating Company, (viii) Special Warranty Deed for Wingate Terminal dated August 6, 2018, between WRSW and Western Refining Terminals, LLC (“WRT”), (ix) Special Warranty Deed for Mason East Station dated August 6, 2018, between WRSW and Western Refining Pipeline, LLC (“WRP”), (x) Special Warranty Deed for Conan terminal dated August 6, 2018, between Western Refining Conan Gathering, LLC and WRT, (xi) Special Warranty Deed for Jal Terminal dated August 6, 2018, between WRCL and WRT, (xii) Conveyance, Bill of Sale, Assignment and Assumption for Benny Pipeline dated August 6, 2018, between WRSW and WRP, (xiii) Conveyance, Bill of Sale, Assignment and Assumption for Bobcat Pipeline dated August 6, 2018, between WRSW and WRP, (xiv) Conveyance, Bill of Sale, Assignment and Assumption for Conan pipeline dated August 6, 2018,  between WRSW and Western Refining Conan Gathering, LLC, (xv) Conveyance, Bill of Sale, Assignment and Assumption for Aranco Pipeline dated August 6, 2018,  between St. Paul Park Refining Co. LLC and the Operating Company, and (xvi) Conveyance, Bill of Sale, Assignment and Assumption for Clearbrook dated August 6, 2018,  between WRSW and the Operating Company, the Parties hereto agree that the indemnification provisions of any of those agreements shall control over any of the other agreements to the extent the subject matter of the indemnification is specifically referenced or provided for in that agreement. In the event of a conflict of provisions of any of the above-referenced agreements and the Fourth Amended and Restated Omnibus Agreement, the provisions of the Fourth Amended and Restated Omnibus Agreement shall prevail with respect to issues related to the contribution of the assets described therein, but not with respect to the ordinary operations of such assets as set forth in the above-referenced agreements. With respect to the LA

Schedule IX- Page 8 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


Refinery Interconnecting Pipeline, the Aranco Pipeline, and the assets conveyed to the Partnership Group as a result of the transfer of the MPL Units, the WRCG Units, the WRDBS Units, the ATL Units, and the Andeavor Rio Units by the Andeavor Entities to the Partnership Group, the indemnities in those other agreements and in this Schedule IX shall be the exclusive indemnity obligations between the Andeavor Entities and the Partnership Group, and the indemnities in Sections 3 and 5 of the Fourth Amended and Restated Omnibus Agreement shall not apply.

2.    With respect to (i) the Ground Lease dated August 6, 2018 for Mandan Refinery between TRMC and the Operating Company, and (ii) Ground Lease dated August 6, 2018 for Salt Lake Refinery between TRMC and the Operating Company, which include warranties of quiet enjoyment and indemnity obligations governed by the Master Terminalling Services Agreement and the Fourth Amended and Restated Omnibus Agreement, the Fourth Amended and Restated Omnibus Agreement shall prevail in the event of any conflict with the Master Terminalling Services Agreement.

3.    With respect to the surface and subsurface of the lands on the LARW Refinery Unit, LARC Refinery Unit and LA Refinery Interconnecting Pipeline for which access is licensed to the Partnership Group by the Andeavor Entities pursuant to the License Agreement referenced in the 2018 Assets Contribution Agreement, (i) the Andeavor Entities shall remain liable and responsible for all liabilities, costs and expenses (including without limitation, response and remediation costs) arising by reason of contamination by hazardous substances to the extent (a) caused by TRMC while it held fee title to the land and existed on or before the date of the 2018 Assets Contribution Agreement or (b) resulting from future operations by TRMC on the land after the date of the 2018 Assets Contribution Agreement while TRMC holds fee title to the property, and (ii) liabilities regarding environmental liabilities arising from TRMC’s operation on such lands on or after the date of the 2018 Assets Contribution Agreement shall be as provided in the Master Terminalling and Storage Agreement or the Pipeline Transportation Agreement, as applicable.

4.    Before the effective date of the 2018 Assets Contribution Agreement, Western Refining Company, L.P., a subsidiary of Andeavor, acquired certain asphalt terminals and other assets under an Asset Purchase Agreement dated February 9, 2018 (the “Asphalt Terminals APA”), and TRMC acquired the Andeavor Rio Units and the Andeavor CD Units under a Purchase and Sale Agreement dated December 26, 2017 (the “Rio Pipeline APA”). With respect to the assets acquired under the Asphalt Terminals APA and the assets and interests acquired under the Rio Pipeline APA, the Andeavor Entities shall provide to the Partnership Group the benefit of all indemnification rights from third parties that the Andeavor Entities hold with respect to such assets by reason of the Asphalt Terminals APA and the Rio Pipeline APA.

The Partnership Group agrees that, after the effective date of the 2018 Assets Contribution Agreement, they shall not do anything that would be considered a breach of the Asphalt Terminals APA or the Rio Pipeline APA as if the Partnership Group were parties thereto instead of Western Refining Company, L.P. or TRMC, respectively, and the Partnership Group will defend, indemnify and hold harmless the Andeavor Group against all Losses due to any Partnership Group Member’s breach thereof.


Schedule IX- Page 9 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement


5.    The Partnership Group Member that is the assignee of an assigned contracts listed on Schedule B to the 2018 Assets Contribution Agreement agrees to defend, indemnify and hold harmless the Andeavor Group against all Losses arising under the assigned contract due to any Partnership Group Member’s failure to perform its obligations under the assigned contract.

6.    To the extent that any Andeavor Entity remains the guarantor of any obligations of a company or other entity that is contributed to the Partnership Group through the WRS Unit Contribution, the Partnership Group agrees to defend, indemnify and hold harmless the Andeavor Group against all Losses arising under any such guaranty.





















    













Schedule IX- Page 10 to
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement
Exhibit 10.4

FIRST AMENDMENT TO MASTER TERMINALLING SERVICES AGREEMENT
This First Amendment to Master Terminalling Services Agreement (this “ Amendment ”) is dated as of September 28, 2018, but effective August 6, 2018, by and between, with respect to each respective Terminal set forth on Schedule I and the Terminal Service Order applicable thereto, the party identified as “Customer” with respect to such respective Terminal as set forth on Schedule I (such party, as applicable to the respective Terminal, a “ Customer ”), and the party identified as “Provider” with respect to such respective Terminal as set forth on Schedule I and the Terminal Service Order applicable thereto (such party, as applicable to the respective Terminal, a “ Provider ”).
RECITALS
WHEREAS , on August 6, 2018, the Parties entered into that certain Master Terminalling Services Agreement pursuant to which the Parties agreed that Provider would operate the Terminal pursuant to the terms set forth therein (the “ Original Agreement ”); and
WHEREAS , the Parties desire to amend the Original Agreement pursuant to the terms and conditions contained herein.
NOW, THEREFORE , in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:
1.
Amendments to the Original Agreement . Schedule B (Dedicated Tanks) shall be amended and restated in its entirety as set forth in Schedule B attached hereto.
2.
Miscellaneous.
(a)    Other than as set forth above, the Original Agreement shall remain in full force and effect as written.

(b)    Except as otherwise provided herein, all costs and expenses (including legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Amendment and the transactions contemplated hereby shall be paid by the Party incurring such expenses.

(c)    This Amendment and the legal relations between the Parties shall be governed by and construed in accordance with Section 34(d) of the Original Agreement.

(d)    This Amendment constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof.

(e)    This Amendment may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Either Party’s delivery of an executed counterpart signature page by facsimile (or electronic .pdf format transmission) is as effective as executing and delivering this Amendment in the presence of the

1



other Party. No Party shall be bound until such time as all of the Parties have executed counterparts of this Amendment.

(f)    This Amendment is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Amendment.

(g)    The invalidity or unenforceability of any term or provision of this Amendment in any situation or jurisdiction shall not affect the validity or enforceability of the other terms or provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction and the remaining terms and provisions shall remain in full force and effect, unless doing so would result in an interpretation of this Amendment that is manifestly unjust.


[Signature Page Follows]




2




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the Mandan Terminal:
Customer:

Tesoro Refining & Marketing Company LLC

By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Tesoro Logistics Operations LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer

Signature Page
First Amendment to Master Terminalling Services Agreement




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the Salt Lake City Terminal:
Customer:

Tesoro Refining & Marketing Company LLC

By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Tesoro Logistics Operations LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer



Signature Page
First Amendment to Master Terminalling Services Agreement



IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the LAR Terminal:
Customer:

Tesoro Refining & Marketing Company LLC

By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Tesoro Logistics Operations LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer


Signature Page
First Amendment to Master Terminalling Services Agreement




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the Fryburg Terminal:
Customer:

Tesoro Refining & Marketing Company LLC


By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Tesoro Great Plains Gathering & Marketing LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer


Signature Page
First Amendment to Master Terminalling Services Agreement




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the Wingate Terminal:
Customer:

Western Refining Southwest, Inc.
 
By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Western Refining Terminals, LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer



Signature Page
First Amendment to Master Terminalling Services Agreement



IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the JAL NGL Terminal:
Customer:

Western Refining Company, L.P., by Western Refining GP, LLC, its general partner
 
By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer



Tesoro Refining & Marketing Company LLC


By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Western Refining Terminals, LLC
 

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer


Signature Page
First Amendment to Master Terminalling Services Agreement




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.
As to the Clearbrook Terminal:
Customer:

St. Paul Park Refining Co. LLC

By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer

Provider:

Tesoro Logistics Operations LLC
 
By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer
    



Signature Page
First Amendment to Master Terminalling Services Agreement



SCHEDULE I

Parties to Agreement per respective Terminal

Terminal
Associated Refinery
Customer
Provider
Mandan
Mandan Refinery
Tesoro Refining & Marketing Company LLC
Tesoro Logistics Operations LLC

Salt Lake City
Salt Lake City Refinery
Tesoro Refining & Marketing Company LLC

Tesoro Logistics Operations LLC
LAR – Carson
Los Angeles Refinery (Carson)
Tesoro Refining & Marketing Company LLC

Tesoro Logistics Operations LLC
LAR – Wilmington
Los Angeles Refinery (Wilmington)
Tesoro Refining & Marketing Company LLC

Tesoro Logistics Operations LLC
Fryburg
N/A
Tesoro Refining & Marketing Company LLC
Tesoro Great Plains Gathering & Marketing LLC
Wingate
N/A
Western Refining Southwest, Inc.
Western Refining Terminals, LLC
JAL NGL
N/A
Western Refining Company, L.P.;
Tesoro Refining & Marketing Company LLC
Western Refining Terminals, LLC
Clearbrook
N/A
St. Paul Park Refining Co. LLC

Tesoro Logistics Operations LLC


SCHEDULE B
DEDICATED TANKS

LOCATION
TANK NUMBER
RESERVED CAPACITY (in Barrels)
Mandan
FB-701
96,000
Mandan
FB-702
96,000
Mandan
FB-703
96,000
Mandan
FB-705
96,000
Mandan
FB-706
96,000
Mandan
FB-707
32,900
Mandan
FB-708
30,000
Mandan
FB-709
30,000
Mandan
FB-710
30,000
Mandan
FB-711
30,000
Mandan
FB-712
30,000
Mandan
FB-714
30,000
Mandan
FB-715
20,000
Mandan
FB-716
15,000
Mandan
FB-717
43,000
Mandan
FB-718
30,000
Mandan
FB-719
30,000
Mandan
FB-720
30,000 (OOS)*
Mandan
FB-721
10,000
Mandan
FB-722
10,000
Mandan
FB-723
96,000
Mandan
FB-724
96,000 (OOS)**
Mandan
FB-725
96,000
Mandan
FB-726
96,000
Mandan
FB-727
96,000
Mandan
FB-728
96,000
Mandan
FB-729
96,000
Mandan
FB-730
96,000
Mandan
FB-731
96,000
Mandan
FB-732
30,000
Mandan
FB-733
96,000
Mandan
FB-734
96,000
Mandan
FB-737
20,000 (OOS)
Mandan
FB-738
43,000
Mandan
FB-740
20,000
Mandan
FB-741
15,000
Mandan
FB-742
30,000 (OOS)
Mandan
FB-743
20,000
Mandan
FB-744
24,000
Mandan
FB-745
20,000
Mandan
FB-746
700
Mandan
FB-747
96,000
Mandan
FB-748
96,000
Mandan
FB-749
300 (OOS)
Mandan
FB-750
96,000
Mandan
FB-751
96,000
Mandan
FB-752
96,000
Mandan
FB-753
96,000
Mandan
FB-754
96,000
Mandan
FB-755
96,000
Mandan
FB-756
24,000
Mandan
FB-758
5,000
Mandan
FB-764
96,000
Mandan
FB-766
22,000
Mandan
FB-767
8,000
Mandan
FB-768
1,000 (OOS)
Mandan
FB-771
96,000
Mandan
FB-773
12
Mandan
FB-774
21
 
 
 
Salt Lake City
141
14,896
Salt Lake City
142
14,323
 
 
 
Salt Lake City
155
10,313
Salt Lake City
157
19,915
Salt Lake City
158
19,915
Salt Lake City
186
58,748
Salt Lake City
188
58,748
Salt Lake City
190
48,348
Salt Lake City
204
55,094
Salt Lake City
206
62,091
Salt Lake City
209
(OOS)
Salt Lake City
212
56,627
Salt Lake City
213
56,627
Salt Lake City
236
56,627
Salt Lake City
242
55,688
Salt Lake City
243
55,209
Salt Lake City
244
15,484
Salt Lake City
245
24,071
Salt Lake City
246
11,190
Salt Lake City
247
11,190
Salt Lake City
248
60,000***
Salt Lake City
252
55,688
 
 
 
Salt Lake City
291
15,107
Salt Lake City
294
(OOS)
Salt Lake City
297
3,275
Salt Lake City
298
3,575
Salt Lake City
305
5,117
Salt Lake City
306
5,117
Salt Lake City
307
6,714
Salt Lake City
308
6,714
Salt Lake City
309
(OOS)
Salt Lake City
310
(OOS)
Salt Lake City
312
(OOS)
Salt Lake City
314
(OOS)
Salt Lake City
315
(OOS)
Salt Lake City
321
24,171
Salt Lake City
322
37,871
Salt Lake City
323
37,871
Salt Lake City
324
54,974
Salt Lake City
325
54,974
Salt Lake City
326
54,974
Salt Lake City
327
54,974
Salt Lake City
328
54,974
Salt Lake City
329
10,313
Salt Lake City
330
24,071
Salt Lake City
331
33,105
Salt Lake City
848
2,800
Salt Lake City
849
2,800
Salt Lake City
427A
606
Salt Lake City
427B
606
Salt Lake City
427C
905
Salt Lake City
427D
905
LAR - Carson
14
358,162
LAR - Carson
16
96,247
LAR - Carson
17
95,649
LAR - Carson
31
82,396
LAR - Carson
61
100,965
LAR - Carson
62
100,312
LAR - Carson
63
100,600
LAR - Carson
64
100,220
LAR - Carson
73
30,570
LAR - Carson
74
15,021
LAR - Carson
75
14,972
LAR - Carson
76
30,570
LAR - Carson
78
10,239
LAR - Carson
959
163,366
LAR - Carson
350
1,770
LAR - Carson
351
1,770
LAR - Carson
352
1,770
LAR - Carson
353
1,770
LAR - Carson
354
1,770
LAR - Carson
355
1,770
LAR - Carson
398
6,910
LAR - Carson
399
6,910
LAR - Carson
677
16,671 (OOS)
LAR - Carson
678
16,690 (OOS)
LAR - Carson
679
16,307 (OOS)
LAR - Carson
680
16,279 (OOS)
LAR - Carson
681
30,000
LAR - Carson
682
30,000
LAR - Carson
683
30,000
LAR - Carson
684
30,000
LAR - Carson
773
97,844
LAR - Wilmington
476
400
LAR - Wilmington
776
700
LAR - Wilmington
777
700
LAR - Wilmington
778
700
LAR - Wilmington
779
700
LAR - Wilmington
780
700
LAR - Wilmington
1501
985
LAR - Wilmington
1502
985
LAR - Wilmington
1503
985
LAR - Wilmington
6000
6,000
LAR - Wilmington
6001
6,000
LAR - Wilmington
7201
7,156
LAR - Wilmington
7501
8,395
LAR - Wilmington
11000
11,567 (OOS)
LAR - Wilmington
11001
11,567 (OOS)
LAR - Wilmington
11002
11,567 (OOS)
LAR - Wilmington
11003
11,567 (OOS)
LAR - Wilmington
11004
11,567 (OOS)
LAR - Wilmington
13500
13,818 (OOS)
LAR - Wilmington
13501
13,818 (OOS)
LAR - Wilmington
13502
13,818
LAR - Wilmington
13503
13,818
LAR - Wilmington
13504
13,818
LAR - Wilmington
13505
13,818
LAR - Wilmington
13506
13,818
LAR - Wilmington
13507
13,818 (OOS)
LAR - Wilmington
13508
13,818
LAR - Wilmington
13509
13,818 (OOS)
LAR - Wilmington
13510
13,818
LAR - Wilmington
13511
13,818
LAR - Wilmington
13512
13,818 (OOS)
LAR - Wilmington
20426
20,144
LAR - Wilmington
36001
36,612
LAR - Wilmington
36002
36,612
LAR - Wilmington
50000
50,000
LAR - Wilmington
76000
76,158
LAR - Wilmington
80033
81,383
LAR - Wilmington
80034
81,383
LAR - Wilmington
80035
81,383
LAR - Wilmington
80036
81,383
LAR - Wilmington
80037
81,383
LAR - Wilmington
80038
81,383
LAR - Wilmington
80039
81,383
LAR - Wilmington
80042
81,383
LAR - Wilmington
80044
81,383
LAR - Wilmington
80045
81,383
LAR - Wilmington
80049
81,383
LAR - Wilmington
80050
81,383
LAR - Wilmington
80051
81,383
LAR - Wilmington
80055
81,383
LAR - Wilmington
80057
82,340
LAR - Wilmington
80058
81,383
LAR - Wilmington
80061
81,383
LAR - Wilmington
80062
81,383
LAR - Wilmington
80063
81,383
LAR - Wilmington
80064
81,383
LAR - Wilmington
80065
81,383
LAR - Wilmington
80066
81,383
LAR - Wilmington
80067
81,383
LAR - Wilmington
80068
81,383
LAR - Wilmington
80069
81,383
LAR - Wilmington
80070
81,383
LAR - Wilmington
80071
81,383
LAR - Wilmington
80072
81,383
LAR - Wilmington
80075
78,511
LAR - Wilmington
80076
81,383
LAR - Wilmington
80077
81,383
LAR - Wilmington
80078
81,383
LAR - Wilmington
80079
81,383
LAR - Wilmington
80080
81,383
LAR - Wilmington
80081
81,383
LAR - Wilmington
80082
81,383
LAR - Wilmington
80083
81,383
LAR - Wilmington
80084
81,383
LAR - Wilmington
80085
81,383
LAR - Wilmington
80087
81,383
LAR - Wilmington
80089
81,383
LAR - Wilmington
80090
81,383
LAR - Wilmington
80091
81,383
LAR - Wilmington
80092
81,383
LAR - Wilmington
80209
85,610
LAR - Wilmington
80210
85,610
LAR - Wilmington
80211
85,610
LAR - Wilmington
80212
85,610
LAR - Wilmington
80213
85,610
LAR - Wilmington
80214
85,610
LAR - Wilmington
80215
85,610
LAR - Wilmington
80216
85,610
LAR - Wilmington
80217
85,610
LAR - Wilmington
80218
80,000
LAR - Wilmington
80219
85,610
LAR - Wilmington
80220
85,610
LAR - Wilmington
80221
81,239
LAR - Wilmington
96000
96,689
LAR - Wilmington
96059
96,689
LAR - Wilmington
118066
117,477
LAR - Wilmington
125000
123,278
LAR - Wilmington
125001
123,278
LAR - Wilmington
125002
125,897
LAR - Wilmington
125003
125,897
LAR - Wilmington
125004
125,897
Fryburg Terminal
Tk-102
150,000
Fryburg Terminal
Tk-103
175,000
Fryburg Terminal
Tk-104
175,000
Wingate Terminal
V-500 - V-505
8,004
Wingate Terminal
V-506 - V-510
8,521
Wingate Terminal
V-516 - V-518
5,450
Wingate Terminal
V-511 - V515
12,413
Wingate Terminal
V-200 - V-207
9,941
Wingate Terminal
V-208
1,243
Wingate Terminal
V-400 - V-407
10,652
Wingate Terminal
V-209 - V-214
10,291
Wingate Terminal
V-215
7,676
Wingate Terminal
V-216
10,313
Wingate Terminal
V-100 - V-101
12,390
Wingate Terminal
V-102 - V-103
20,791
Wingate Terminal
V-104
10,313
Wingate Terminal
V-519
95
JAL Terminal
NA
212,000
Clearbrook
Tk-6014
300,000
Clearbrook
Tk-6015
300,000

*Out of Service (OOS).
** Tank 724, Subgrade, expected to come into service October 2020.
***Projected construction completion in 2019. Upon completion, fees will be assessed pursuant to an applicable Terminal Service Order.
For the avoidance of doubt, fees will be assessed only upon in-service Dedicated Tanks


Exhibit 10.9

FIRST AMENDMENT TO ASPHALT TERMINALLING, TRANSPORTATION AND STORAGE SERVICES AGREEMENT
This FIRST AMENDMENT TO ASPHALT TERMINALLING, TRANSPORTATION AND STORAGE SERVICES AGREEMENT (this “ Amendment ”) is dated as of September 28, 2018, but effective August 6, 2018, by and between Western Refining Company, L.P. (“ Customer ”), and Asphalt Terminals LLC (“ Provider ”). Customer and Provider may each be referred to herein as a “ Party ” and collectively as the “ Parties ”.
RECITALS
WHEREAS , on August 6, 2018, the Parties entered into that certain Asphalt Terminalling, Transportation and Storage Services Agreement pursuant to which the Parties agreed that Provider would operate the Terminals pursuant to the terms set forth therein (the “ Original Agreement ”); and
WHEREAS , the Parties desire to amend the Original Agreement pursuant to the terms and conditions contained herein.
NOW, THEREFORE , in consideration of the covenants and obligations contained herein, the Parties to this Amendment hereby agree as follows:
1.
Amendments to the Original Agreement . Schedule 4.1 (Minimum Asphalt Commitments), Schedule 4.2 (Dedicated Tanks), and Schedule 22.2 (Stipulated Commitment) are amended and restated in their entirety as set forth in revised Schedule 4.1 , Schedule 4.2 , and Schedule 22.2 attached hereto, respectively.
2.
Miscellaneous.
(a)    Other than as set forth above, the Original Agreement shall remain in full force and effect as written.

(b)    Except as otherwise provided herein, all costs and expenses (including legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Amendment and the transactions contemplated hereby shall be paid by the Party incurring such expenses.

(c)    This Amendment and the legal relations between the Parties shall be governed by and construed in accordance with Section 29.3 of the Original Agreement.

(d)    This Amendment constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof.

(e)    This Amendment may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Either Party’s delivery of an executed counterpart signature page by facsimile (or electronic .pdf format

1


transmission) is as effective as executing and delivering this Amendment in the presence of the other Party. No Party shall be bound until such time as all of the Parties have executed counterparts of this Amendment.

(f)    This Amendment is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Amendment.

(g)    The invalidity or unenforceability of any term or provision of this Amendment in any situation or jurisdiction shall not affect the validity or enforceability of the other terms or provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction and the remaining terms and provisions shall remain in full force and effect, unless doing so would result in an interpretation of this Amendment that is manifestly unjust.


[Signature Page Follows]


2


IN WITNESS WHEREOF , the Parties have duly executed this Amendment as of the date first above written.

CUSTOMER:

Western Refining Company, L.P., by
Western Refining GP, LLC, its general partner

By: /s/ Gregory J. Goff
Name: Gregory J. Goff
Title: President and Chief Executive Officer

PROVIDER:

Asphalt Terminals LLC

By: /s/ Steven M. Sterin
Name: Steven M. Sterin
Title: President and Chief Financial Officer





Signature Page
First Amendment to Asphalt Terminalling Transportation and Storage Services Agreement


SCHEDULE 4.1
MINIMUM ASPHALT COMMITMENTS
A.      Minimum Asphalt Storage Commitment
Terminal
Asphalt Minimum Storage   Commitment (Barrels)
Bakersfield, CA
123,556
Mojave, CA
240,000
Elk Grove, CA
322,433
Phoenix, AZ
172,050
 
 

B.     Minimum Asphalt Throughput Commitment
Description
Minimum Asphalt Throughput Commitment (tons/Month)
Bakersfield, CA
2,833
Mojave, CA
3,542
Elk Grove, CA
4,250
Phoenix, AZ
12,396



Schedule 4.1


SCHEDULE 4.2
DEDICATED TANKS

A. Bakersfield Terminal
Tank Number
Tank Capacity
PMA-1
800
PMA-2
800
PMA-3
800
PMA-4
1,900
T-1
500
T-10
400
T-11
520
T-1101
1,285
T-1102
1,285
T-12
520
T-14
300
T-15
215
T-16
260
T-17
85
T-18
85
T-19
85
T-2
240
T-20
85
T-21
120
T-22
120
T-23
90
T-24
650
T-25
112
T-25001
24,170
T-3
4,200
T-4
550
T-5
520
T-5901
5,963
T-5902
5,963
T-5903
5,963
T-6
520
T-60001
61,250
T-601RS
600
T-602RS
600
T-603RS
600
T-7
520
T-8
520
T-9
360
Total
184,806


Schedule 4.2


B. Elk Grove Terminal
Tank Number
Tank Capacity
142
155 (OOS)*
180
143
201
200
1000
45
1101
1,200
1401
1,300
1402
1,300
2000
143
100001
100,000
100002
100,000
10001
10,000
10002
10,000
10003
10,000
1B
94 (OOS)
3001
3,000
3002
3,000
50001
50,000
5001
5,000
5002
5,000
5003
5,000
5004
5,000
5005
5,000
501
500
502
500
503
500
504
500
505
500
506
500
507
500
508
500
509
500
5W
149
761
750
762
750
763
750
PMA Mix Tank
60
QTS1
143
Total
322,433


Schedule 4.2


C. Phoenix Terminal
Tank Number
Tank Capacity
25
786
26
944
27
266
28
266
29
604
30
604
49
403
50
242
60
242
70
242
80
242
1
1,678
100
419
10001
9,865
10002
9,865
101
486
102
336
1501
786
1502
786
1503
786
1504
786
1505
786
1506
786
1507
786
1515
786
18
507
19
507
20
1,449
200
419
201
486
202
288
21
1,449
22
1,678
23
1,933
31
5,480
32
5,480
33
1,212
34
1,212
4
486
420
700

Schedule 4.2


440
786
460
786
480
786
5
1,118
50001
50,793
50002
50,793
8
272
9
541
A
1,699
E
484
E-2
725
E-3
725
E-5
725
E6
725
G
484
H
484
J
486
K
486
L
483
M
483
PMA mix
1,118
PPA
179 (OOS)
Total
172,050

D. Mojave Terminal
Tank Number
Tank Capacity
T-2
60,000
T-4
60,000
T-6
60,000
T-8
60,000
Total
240,000

*OOS (Out of Service). For the avoidance of doubt, fees will be assessed only upon in-service dedicated tanks.

Schedule 4.2



SCHEDULE 22.2
STIPULATED COMMITMENTS
A.     Stipulated Asphalt Storage Commitment
Terminal
Asphalt Tankage Reserved Capacity (Barrels)
Bakersfield, CA
123,556
Mojave, CA
240,000
Elk Grove, CA
322,433
Phoenix, AZ
172,050


B.     Stipulated Asphalt Throughput Commitment
Terminal
Stipulated Asphalt Throughput (tons/Month)
Bakersfield, CA
2,833
Mojave, CA
3,542
Elk Grove, CA
4,250
Phoenix, AZ
12,396



Schedule 22.2
Exhibit 10.10

Execution Version



TERMINAL SERVICES AGREEMENT

This Terminal Services Agreement (the “ Agreement ) is dated as of January I, 2017 (the " Effective Date ") by and between Tesoro Great Plains Gathering & Marketing LLC, a Delaware limited liability company (" TGP '), and Tesoro Refining & Marketing Company LLC, a Delaware limited liability company (" Customer ").

RECITA LS:

WHEREAS , TGP has dedicated contractual capacity rights to receive, temporarily store, and load Crude Petroleum into Rail Cars (" Contracted Capacity ") at a crude oil storage and rail terminal in western North Dakota (the " Fryburg Rail Terminal '), located in the south half of north half & north half of south half of Section 10, Township 139 North, Range 100 West, Billings County, North Dakota; and

WHEREAS , Customer owns, will own, or will have the right to deliver, certain quantities of Crude Petroleum that it desires to transport as a shipper through BakkenLink's (as defined below) pipeline system in North Dakota (the " BakkenLink Pipeline System ");

WHEREAS , the BakkenLink Pipeline System provides common earner transportation service in interstate commerce subject to tariffs filed with the FERC;

WHEREAS , TGP is the owner and operator of certain crude oil delivery facilities in western North Dakota (" Receipt Locations ") capable of accepting and transferring Customer's Crude Petroleum into and from the custody of BakkenLink Pipeline LLC (" BakkenLink ”);

WHEREAS , TGP is willing to receive, temporarily store, deliver and load Crude Petroleum from Customer at the Receipt Locations, as applicable, and Customer is willing to ship Crude Petroleum from the Receipt Locations for the delivery and rail loading of Customer's Crude Petroleum by TGP at the Fryburg Rail Terminal, in the manner and according to the terms and conditions contained herein; and

WHEREAS , the Parties desire to enter into this Agreement to memorialize the terms of this relationship.

NOW THEREFORE , in consideration of the covenants and obligations contained herein, the Parties to this Agreement hereby agree as follows:

1. DEFINITIONS

Capitalized terms used throughout this Agreement shall have the meanings set forth below, unless otherwise specifically defined herein.

"Actual Inventory" means the sum of the Fryburg Terminal Tank Bottoms and any additional Customer Barrels in storage at the Fryburg Rail Terminal.

"Affiliate" means any Person that, directly or indirectly, Controls, is Controlled by, or is

Page 1 of 22


under common Control with a Party.

"Applicable Law" means any applicable statute, law, regulation, ordinance, rule, determination, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, specification, requirement, or any similar form of decision of, or any provision or condition of any permit, license or other operating authorization issued by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect with all related amendments and implementing regulations and all common law.

"BakkenLink Tariffs" means both BakkenLink's Proportional Tariff and published Rules and Regulations Tariff, as currently on file at the Federal Energy Regulatory Commission, as may be amended or supplemented by BakkenLink from time to time.

"Barrel” means forty-two (42) United States gallons at standard conditions of temperature and pressure.

"BPD" means Barrels per Day based on a daily average for each Month.

"Business Day" means a Day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.

"Confidential Information" means information furnished by one Party to the other that is marked or otherwise identified or reasonably identifiable as proprietary or confidential, and, with respect to both Parties, the terms and provisions of this Agreement.

"Control” means the right to exercise at least fifty percent (50%) of the outstanding shares, or securities, or other equity interests entitled to vote for the election of directors or other managing authority or governing body.

"CPI- U” has the meaning set forth in Section 4 .

"Crude Petroleum" means the direct liquid product of oil and gas wells and oil processing plants and any similar substance that is processed by oil refineries, including substances that are extracted from shale, coal, or other solid hydrocarbon deposits, and including mixtures of any of the foregoing components, provided that all Crude Petroleum also meets the Specifications.

"Crude Petroleum Statement'' has the meaning set forth in Section 8 .

"Day" or "day" means a period of 24-consecutive hours, beginning and ending at 7:00 a.m. Denver, Colorado Time. The reference date for any Day shall be the calendar date upon which the 24 hours shall commence.

"Force Majeure Event" or "Force Majeure" means circumstances not reasonably within the control of a Party and which, by the exercise of due diligence, such Party is unable to prevent or overcome, and that prevent performance of such Party's obligations under this Agreement, including: acts of God, strikes, lockouts or other industrial disturbances, wars, riots, fires, floods, storms, unseasonal heat or cold, orders of courts or Governmental Authorities, explosions, terrorist acts, breakage, outages for unscheduled repairs, accident to machinery, storage tanks or line of pipe,


Page 2 of 22



inability to obtain or unavoidable delays in obtaining material or equipment, and similar events.

"Fryburg Terminal Tank Bottoms" means Customer's allocated minimum tank inventory requirements at the Fryburg Rail Terminal, as such may be revised by TGP from time to time.

"Governmental Authority" means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.

"Initial Term" has the meaning set forth in Section 2 .

"Month" means a calendar month.

"Monthly Actual Volume" means actual Barrels of Customer's Crude Petroleum loaded onto Unit Trains at the Fryburg Rail Terminal during any given Month.

"Party" or "Parties" means that each of TGP and Customer is a "Party" and collectively are the "Parties" to this Agreement.

"Person" means any individual, partnership, limited partnership, joint venture, corporation, limited liability company, limited liability partnership, trust, unincorporated organization or Governmental Authority or any department or agency thereof.

"Rail Cars" means rail tank cars owned or leased by the Customer, or those of a third party nominated to load Customer's volume of Crude Petroleum, conforming to size, length, and appurtenant configuration of the Fryburg Rail Terminal as set forth in the Unit Train Terms and Conditions, attached hereto and incorporated into the Agreement as Exhibit A .

"Railway" means the Burlington Northern Santa Fe Railway and connecting interchange railroads.

"Receiving Party Personnel” has the meaning set forth in Section 2 l(d) .

"Receipt Locations" shall be as set forth in Exhibit B .

"Renewal Term" has the meaning set forth in Section 2 .

"Specifications" means the "quality specifications" for Crude Petroleum set forth in the BakkenLink Pipeline Rules and Regulations Tariff, as amended or supplemented from time to time.

"Tariff Rate Revision Proceeding” has the meaning set forth in Section 4(b) .

"Term" has the meaning set forth in Section 2 .

"Terminal Fees" has the meaning set forth in Section 5 .

Page 3 of 22



"Unit Train" means a Railway train with a minimum of one hundred (100) Rail Cars, making allowances for any potential bad-order Rail Cars in route or while at the Fryburg Rail Terminal, in which all Rail Cars making it up are shipped from the same origin to the same destination without being split up or stored en route.

2. EFFECTIVE DATE AND TERM

The "Term" of this Agreement shall commence on the Effective Date and shall continue, unless sooner terminated pursuant to the terms hereof, for a period of one ( 1) year following the Effective Date (the "Initial Term"). Thereafter, this Agreement shall automatically be renewed for successive renewal terms of one year each (each additional annual term a "Renewal Term"), provided, however, that either Party may terminate this Agreement effective at the end of the Initial Term or any Renewal Term by giving the other Party ninety (90) Days' prior written notice prior to the expiration of the Initial Term or any Renewal Term, as applicable.

3.
SERVICES PROVIDED BY TGP

The services to be provided by TGP under this Agreement shall include, without limitation, the following:

a.
At the Receipt Locations, subject to individual Receipt Location capabilities as set forth in Exhibit B and available capacity at the Fryburg Rail Terminal, TGP shall receive, by pipeline and/or truck, volumes of Customer's Crude Petroleum properly nominated, tendered and delivered by Customer, or third parties on Customer's behalf, at the Receipt Locations. Volumes delivered by Customer or on Customer's behalf to TGP at any Receipt Locations (other than at the Fryburg Rail Terminal) shall subsequently be delivered by TGP into the custody of BakkenLink, for Customer's sole account, for transportation by the BakkenLink Pipeline System to the Fryburg Rail Terminal.

b.
TGP shall: (i) receive at the Fryburg Rail Terminal, from the Railway, Rail Cars provided by or at the direction of Customer; (ii) visually inspect the Rail Cars prior to loading, to reasonably determine that hatches, valves, fittings, placards and other safety appurtenances are in proper order, and detain Rail Cars which do not comply with Railway requirements or applicable regulations; (iii) secure each Rail Car for shipment in compliance with federal regulations; (iv) coordinate with the Railway the receipt of Rail Cars to, and the removal of Rail Cars from the Fryburg Rail Terminal; and (v) provide to Customer destination bills of lading, or such other documentation reasonably requested by Customer.

c.
At the Fryburg Rail Terminal, TGP shall receive Customer's Crude Petroleum from BakkenLink's custody or from properly nominated trucks, and TGP will temporarily store, and then load Customer's Crude Petroleum to Rail Cars.

d.
TGP will perform the services in a prudent and workmanlike manner consistent


Page 4 of 22



with facilities of a similar nature, and will comply with applicable federal, state and local laws, rules, ordinances and regulations.

4.
PIPELINE TARIFFS

Customer hereby agrees to serve as the shipper on the BakkenLink Pipeline System and nominate barrels into the BakkenLink Pipeline origin points for delivery to the Fryburg Rail Terminal for Crude Petroleum it ships on the BakkenLink Pipeline System in connection with this Agreement. Customer shall pay the applicable BakkenLink Tariffs then in effect at the time of shipment.

5.
TERMINAL FEES

For the services provided by TGP under this Agreement, Customer shall pay monthly the fees (" Terminal Fees ") in accordance with the following table for (i) each net Barrel of Crude Petroleum received by truck at the various truck unloading locations listed below, and (ii) each net Barrel of Crude Petroleum loaded onto Customer's Unit Train at the Fryburg Rail Terminal.


Receipt Locations
Fee per Barrel
Service
Fryburg Rail Terminal
$0.50
Truck Unload
Watford City Terminal
$0.15
Truck Unload
Dunn Terminal
$0.15
Truck Unload
Fryburg Rail Terminal
$0.35
Unit Train Loading


Each of the Terminal Fees indicated above shall be subject to adjustment at each annual anniversary of the Effective Date, or if the anniversary date is not on the first day of a Month, then on the first day of the Month following the anniversary date. Unless the Parties agree in writing otherwise sixty (60) Days prior to the end of the Initial Term, each of the Terminal Fees shall be adjusted by the percentage increase or decrease in the Consumer Price Index for All Urban Consumers, Midwest Region area as published by the US Department of Labor; Bureau of Labor Statistics (the " CPI- U ). The percentage increase in the CPI-U means the percentage increase in the CPI-U over the first twelve (12) of the fifteen (15) Months preceding the escalation date.

6.
INTENTIONALLY OMITTED


7. RAILWAY COMPANY FEES

Customer shall be responsible for paying any fees charged by the Railway with respect to the receipt or delivery of Customer's Crude Petroleum by the Railway, including, without limitation, the fees for Railway switching services and Railway demurrage charges (except to the


Page 5 of 22




extent resulting from TGP's negligent or intentional acts). Customer shall be responsible for all Railway freight charges.

8.
STATEMENTS AND INVOICING

Following the end of each Month, TGP shall prepare a monthly crude petroleum statement in reasonable detail indicating Customer's volumes received by pipeline and/or by truck, the quantity of Customer's volumes delivered into Rail Cars and the amount of Customer's beginning and ending storage inventory at the Fryburg Rail Terminal ("Crude Petroleum Statement”). TGP shall deliver, no later than the fifteenth (15th) day of the Month, the Crude Petroleum Statement along with a corresponding invoice indicating amounts due from Customer for the prior Month's business. Payment of uncontested amounts by Customer to TGP shall be due by the twenty-fifth (25th) day of the same Month.

9.
CRUDE PETROLEUM QUALITY

TGP and Customer separately agree that all Crude Petroleum delivered by Customer to the Receipt Locations will meet the Specifications, and all Crude Petroleum temporarily stored and loaded into Rail Cars by TGP will also meet the Specifications. Customer shall receive at the Fryburg Rail Terminal a common stream of Crude Petroleum that is substantially equivalent to the quality of Crude Petroleum that Customer, or third parties on the Customer's behalf, delivered to TGP at the Receipt Locations.

10.
MEASUREMENT AND DEDUCTIONS

The quantities of Crude Petroleum and custody transfer between TGP and Customer shall be made in accordance with the following:
a.
For deliveries by Customer to TGP by tanker truck at a Receipt Location, as applicable, the quantities shall be measured by the metering equipment provided by TGP. Custody transfer at Receipt Locations (other than the Fryburg Rail Terminal) for tanker truck deliveries will occur at the inlet flange of TGP's meter. Custody transfer at the Fryburg Rail Terminal for tanker truck deliveries will occur at the inlet flange of TGP's booster pump.
b.
For deliveries to Customer's Rail Cars across the rail rack, the quantities shall be measured by the metering equipment provided by TGP. Custody transfer from TGP to Customer will occur at the moment the loaded Rail Car is returned to the Railway.
c.
Measurement and custody transfers applicable to deliveries from pipelines at the Receipt Locations, as applicable, shall be as mutually agreed in writing between the Parties.
d.
The quantities of Crude Petroleum received and delivered shall be determined in accordance with appropriate American Petroleum Institute (API) standards, latest revision, and adjusted to base (reference or standard) conditions. Corrections will be made for temperature from observed degrees Fahrenheit to sixty (60) degrees Fahrenheit and standard pressure. Deduction will be made for the full

Page 6 of 22




amount of sediment, water and other impurities as a centrifugal test may show. Composite samples of the Crude Petroleum flowing through metering equipment will be pulled by the controlling Party and retained for sixty (60) Days for the purpose of resolving any issues over quality. Testing of retained samples to resolve any disputes shall be done by an independent laboratory acceptable to both Parties. TGP shall be obligated to account for and deliver back to Customer a net volume of Crude Petroleum equal to one hundred percent (100%) of the net volume of Crude Petroleum that Customer has delivered to TGP adjusted for actual gains/losses and sediment, water and other impurities.
e.
Crude Petroleum received or delivered shall, in each instance, be evidenced by a ticket showing quantity received or delivered, as the case may be, temperature, sediment and water, and any other data essential to the determination of quality, including all quality measures defined in the Specifications. Unless otherwise agreed, such tickets shall be signed by a representative of the other Party, as appropriate, and shall constitute full receipt of the Crude Petroleum received or delivered.
f.
Prior to construction of a new metering connection, each Party shall have the right to approve, in its reasonable discretion, of the arrangement and the specific equipment to be used in the metering facilities provided by the other Party. The Parties shall mutually agree as to the specific practices and procedures governing the operation and maintenance of the metering facilities, prior to initial service and on a continuing basis thereafter.
g.
Each Party shall be afforded the reasonable opportunity to witness the taking of ticket data and the calibration of metering equipment of the other Party.

11.
FRYBURG RAIL TERMINAL INVENTORY REQUIREMENTS

Customer shall provide inventory at the Fryburg Rail Terminal sufficient to load Customer's Rail Cars plus its required pro-rata share of the Fryburg Terminal Tank Bottoms.

If a Customer Unit Train is nominated and arrives at the Fryburg Rail Terminal for loading and Customer has less than ninety percent (90%) of the nominated Unit Train volume in inventory to load such Unit Train, the loading of the Unit Train will be deferred until at least ninety percent (90%) of the nominated Unit Train volume is in inventory. Except to the extent such inventory shortfall is caused by TGP, Customer shall be responsible for any and all charges, fees, or expenses incurred due to such inventory shortfall and the associated delays in fully loading of a Unit Train.

12.
NOMINATIONS AND SCHEDULING

Nomination and scheduling procedures of Unit Trains are set forth in Exhibit A .

Customer shall be responsible for nominations to the BakkenLink Pipeline System. Additionally, by the 10th day of the Month prior to delivery, Customer shall nominate to TGP for volumes delivered at Receipt Locations and for Unit Train loading dates at the Fryburg Rail Terminal. Customer shall advise TGP as to (i) each monthly shipping schedule, and (ii) subsequently, of any changes to said monthly shipping schedule. Deliveries at the Fryburg Rail Terminal will be made on a ratable basis consistent with Customer's operational parameters and


Page 7 of 22




subject to the scheduling of Rail Cars with the Railway. Subject to operating limitations at the Fryburg Rail Terminal, TGP agrees to accept delivery from the BakkenLink Pipeline System and Customer's trucks according to such schedule and any revisions thereto. Upon confirmation from Railway offloading dates, TGP will distribute delivery schedule to Customer.

13.
TERMINAL OPERATIONS

a.
TGP shall have the exclusive right and obligation to control and operate and maintain the Fryburg Rail Terminal, and all portions thereof. Customer's utilization of the terminalling services will at all times be subject to TGP's Fryburg Rail Terminal operating procedures. TGP will be an independent contractor with respect to all services it provides under this Agreement. TGP may suspend operations at the Fryburg Rail Terminal if TGP reasonably believes that any person, equipment or the environment is at imminent risk of injury or damage. In no event will TGP's services hereunder be deemed to be those of a public utility or common carrier. If any Governmental Authority declares TGP's services those of a public utility or common carrier, TGP may by notice to Customer terminate this Agreement on the effective date of such action.

b.
TGP may, in its reasonable determination, take any tanks out of service during the Term in order to perform inspections, routine maintenance, or repairs. If TGP determines that it is necessary or advisable to perform inspections, routine maintenance, or repairs pursuant to this Section 13 , to the extent practicable, TGP shall give Customer at least thirty (30) Days' written notice of its intention to suspend performance for such purpose and the estimated down time resulting from such suspension and, to the extent practicable, TGP will provide Customer with comparable alternative storage at the Fryburg Rail Terminal, if such is available. Any costs associated with the foregoing shall be borne by TGP; however, in the event that such maintenance or repairs are being performed as a result of Customer's negligence or breach of this Agreement, Customer shall reimburse TGP for the actual out-of-pocket costs incurred from such maintenance and/or repairs.

c.
At any time during the Term, TGP may determine it is necessary or advisable to clean the Fryburg Rail Terminal for maintenance purposes, to conduct an inspection, to perform cleanup as required by an environmental law, or to address an emergency, and, to the extent practicable, TGP shall give Customer at least thirty (30) Days' written notice of its intention to suspend performance for such purposes and the estimated down time resulting from such suspension and, to the extent practicable, TGP will provide Customer with comparable alternative storage at the Fryburg Rail Terminal, if such is available. Any costs associated with the foregoing shall be borne by TGP; however, in the event that such cleaning is being performed as a result of Customer's negligence or breach of this Agreement, Customer shall reimburse TGP for the actual out-of-pocket costs incurred with such cleaning.

d.
Notwithstanding anything in this Agreement to the contrary, TGP shall not be responsible for gains or losses of Crude Petroleum caused for any reason other than the negligence or willful misconduct of TGP.

Page 8 of 22



14.
TAXES

Customer will pay all taxes, levies, royalties, assessments, licenses, fees, charges, surcharges, and sums due to any nature whatsoever assessed against Crude Petroleum or any other property of Customer at the Fryburg Rail Terminal, and its pro-rata share of all taxes, levies, royalties, assessments, licenses, fees, charges, surcharges and sums due to any nature whatsoever assessed against TGP (except for income, franchise and real estate taxes on the Fryburg Rail Terminal) with respect to the receipt, storage, handling and disposal of Crude Petroleum, including any value added tax, sales tax, excise tax, spill tax, pollution control tax or emission fee. Customer shall reimburse TGP for any such taxes, assessments or charges paid by TGP for the benefit of Customer or as required by Applicable Law on behalf of Customer, within ten (10) Days of TGP's written demand thereof (setting forth the particulars of the applicable taxes, assessments or charges).

This Section 14 will survive the termination of this Agreement.

15.
TITLE TO CRUDE PETROLEUM

Title and risk of loss to Crude Petroleum stored or handled pursuant to this Agreement shall always remain with Customer, and TGP will not be liable as an insurer of Crude Petroleum and, except as provided in Section 16 , will not be liable to Customer for damages to or loss of Crude Petroleum, including deterioration or evaporation of Crude Petroleum caused by stagnant storage.

16.
INDEMNITY

a.
Notwithstanding anything else contained in this Agreement, TGP shall release, defend, protect, indemnify, and hold harmless Customer, and each of its respective Affiliates, officers, directors, shareholders, agents, employees, successors-in-interest, and assignees from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of Customer and, as applicable, its carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, or equipment belonging to Customer and, as applicable, its carriers, customers, representatives, and agents, and each of their respective Affiliates, contractors, and subcontractors; (iii) loss of or damage to any other property, products, material, or equipment of any other description, or personal or bodily injury to, or death of any other person or persons; (iv) any liabilities under applicable environmental law resulting from TGP's prior or future operations (including loading and unloading activities) at the Receipt Locations or Fryburg Rail Terminal, except to the extent such liabilities are caused by Customer's failure to comply with this Agreement (including in respect to any tender of Crude Petroleum not meeting the Specifications contained herein); and with respect to clauses (i) through (iii) above, to the extent it is caused by or results from the negligent or otherwise wrongful acts or omissions of TGP in connection with the ownership or operation of the Receipt Locations or Fryburg Rail


Page 9 of 22




Terminal and the services provided hereunder, and, as applicable, its carriers, customers, contractors, subcontractors, representatives, and agents, or those of their employees with respect to such matters; and (v) any losses incurred by Customer due to violations of this Agreement by TGP, or, as applicable, its customers, carriers, contractors, subcontractors, representatives, and agents; PROVIDED THAT TGP SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS CUSTOMER FROM AND AGAINST ANY CLAIMS TO THE EXTENT ANY SUCH CLAIM RESULTS FROM CUSTOMER'S BREACH OF THIS AGREEMENT, NEGLIGENCE OR VIOLATION OF APPLICABLE LAW.

b.
Notwithstanding anything else contained in this Agreement, Customer shall release, defend, protect, indemnify, and hold harmless TGP, and each of its respective Affiliates, officers, directors, shareholders, agents, employees, successors-in-interest, and assignees from and against any and all demands, claims (including third-party claims), losses, costs, suits, or causes of action (including any judgments, losses, liabilities, fines, penalties, expenses, interest, reasonable legal fees, costs of suit, and damages, whether in law or equity and whether in contract, tort or otherwise) for or relating to (i) personal or bodily injury to, or death of the employees of TGP and, as applicable, its carriers, customers, representatives, and agents; (ii) loss of or damage to any property, products, material, or equipment belonging to TGP and, as applicable, its carriers, customers, representatives, and agents, and each of their respective Affiliates, contractors, and subcontractors (except for volume losses); (iii) loss of or damage to any other property, products, material, or equipment of any other description (except for volume losses), or personal or bodily injury to, or death of any other person or persons; and with respect to clauses (i) through (iii) above, to the extent it is caused by or results from the negligent or otherwise wrongful acts or omissions of Customer, in connection with Customer's and its customers' use of the Fryburg Rail Terminal and the services provided hereunder and Customer's Crude Petroleum stored hereunder, and, as applicable, its carriers, customers, contractors, subcontractors, representatives, and agents, or those of their employees with respect to such matters; and (v) any losses incurred by TGP due to violations of this Agreement by Customer, or, as applicable, its customers, carriers, contractors, subcontractors, representatives, and agents; PROVIDED THAT CUSTOMER SHALL NOT BE OBLIGATED TO INDEMNIFY OR HOLD HARMLESS TGP FROM AND AGAINST ANY CLAIMS TO THE EXTENT ANY SUCH CLAIM RESULTS FROM TGP'S BREACH OF THIS AGREEMENT, NEGLIGENCE OR VIOLATION OF APPLICABLE LAW.

c.
The indemnities expressed in this Agreement will survive the termination of this Agreement.

17.
LIMITATION OF LIABILITY

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN; NEITHER PARTY SHALL BE LIABLE OR RESPONSIBLE TO THE OTHER PARTY OR SUCH OTHER PARTY'S AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY OR PUNITIVE DAMAGES, OR FOR LOSS OF PROFITS OR REVENUES (COLLECTIVELY REFERRED TO AS "SPECIAL DAMAGES") INCURRED

Page 10 of 22




BY SUCH PARTY OR ITS AFFILIATES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIM ARISES UNDER OR RESULTS FROM CONTRACT, TORT OR STRICT LIABILITY; PROVIDED THAT THE FOREGOING LIMITATION IS NOT INTENDED TO AND SHALL NOT AFFECT SPECIAL DAMAGES IMPOSED IN FAVOR OF PERSONS THAT ARE NOT PARTIES TO THIS AGREEMENT FOR WHICH A PARTY HERETO HAS AN INDEMNIFICATION OBLIGATION.

18.
INSURANCE REQUIREMENTS

a.
At all times during the Term of this Agreement and for a period of two (2) years after termination of this Agreement for any coverage maintained on a "claims-made" or "occurrence" basis, Customer and/or its carrier (if applicable) shall maintain at their expense the below listed insurance in the amounts specified below which are minimum requirements. Customer shall require that carrier cause all of its contractors providing authorized drivers or authorized vehicles, to carry such insurance, and Customer shall be liable to TGP for their failure to do so. Such insurance shall provide coverage to TGP and such policies, other than Worker's Compensation Insurance, shall include TGP as an Additional Insured. Each policy shall provide that it is primary to and not contributory with any other insurance, including any self­ insured retention, maintained by TGP (which shall be excess) and each policy shall provide the full coverage required by this Agreement. All such insurance shall be written with carriers and underwriters reasonably acceptable to TGP, and eligible to do business in the states where the Terminals are located and having and maintaining an A.M. Best financial strength rating of no less than "A-" and financial size rating no less than "VII", provided that Customer and/or the carrier may procure worker's compensation insurance from the state fund of the state where the Terminal(s) are located. All limits listed below are required MINIMUM LIMITS:

(i)
Workers Compensation and Occupational Disease Insurance which fully complies with Applicable Law of the state where each Terminal is located, in limits not less than statutory requirements;
(ii)
Employers Liability Insurance with a minimum limit of $1,000,000 for each accident, covering injury or death to any employee which may be outside the scope of the worker's compensation statute of the jurisdiction in which the worker's service is performed, and in the aggregate as respects occupational disease;
(iii)
Commercial General Liability Insurance, including contractual liability insurance covering carrier's indemnity obligations under this Agreement, with minimum limits of $1,000,000 combined single limit per occurrence for bodily injury and property damage liability, or such higher limits as may be reasonably required by TGP or by Applicable Law from time to time. This policy shall include Broad Form Contractual Liability insurance coverage which shall specifically apply to the obligations assumed in this Agreement by Customer;
(iv)
Automobile Liability Insurance covering all owned, non-owned and hired vehicles, with minimum limits of $1,000,000 combined single limit per


Page 11 of 22




occurrence for bodily injury and property damage liability, or such higher limit(s) as may be required by Customer or by Applicable Law from time to time. Coverage must assure compliance with Sections 29 and 30 of the Motor Carrier Act of 1980 and all applicable rules and regulations of the Federal Highway Administration's Bureau of Motor Carrier Safety and Interstate Commerce Commissioner (Form MCS 90 Endorsement). Limits of liability for this insurance must be in accordance with the financial responsibility requirement of the Motor Carrier Act, but not less than $1,000,000 per occurrence;
(v)
Excess (Umbrella) Liability Insurance with limits not less than $4,000,000 per occurrence. Additional excess limits may be utilized to supplement inadequate limits in the primary policies required in items (ii), (iii), and (iv) above;
(vi)
Pollution Legal Liability with limits not less than $25,000,000 per loss with an annual aggregate of $25,000,000. Coverage shall apply to bodily injury and property damage including loss of use of damaged property and property that has not been physically injured; clean-up costs, defense, including costs and expenses incurred in the investigation, defense or settlement of claim; and
(vii)
Property Insurance, with a limit of no less than $1,000,000, which property insurance shall be first-party property insurance to adequately cover Customer's owned property; including personal property of others.

b.
All such policies must be endorsed with a Waiver of Subrogation endorsement, effectively waiving rights of recovery under subrogation or otherwise, against TGP, and shall contain where applicable, a severability of interest clause and a standard cross liability clause.

c.
Upon execution of this Agreement and prior to the operation of any equipment by Customer, carrier or its authorized drivers at the Receipt Locations, Customer and/or carrier will furnish to TGP, and at least annually thereafter (or at any other times upon request by TGP) during the Term of this Agreement (and for any coverage maintained on a "claims-made" basis, for two (2) years after the termination of this Agreement), insurance certificates and/or certified copies of the original policies to evidence the insurance required herein, including on behalf of carrier's contractors providing authorized vehicles or authorized drivers. Such certificates shall be in the form of the "Accord" Certificate of Insurance, and reflect that they are for the benefit of TGP and shall provide that there will be no material change in or cancellation of the policies unless TGP is given at least thirty (30) days prior written notice. Certificates providing evidence of renewal of coverage shall be furnished to TGP prior to policy expiration.

d.
Customer and/or carrier shall be solely responsible for any deductibles or self-insured retention.

19.
DEFAULT


Page 12 of 22



A Party will be in default if it: (a) breaches this Agreement, and the breach is not cured within fifteen (15) Days of written notice from the non-defaulting Party; (b) is dissolved, other than pursuant to a consolidation, amalgamation, or merger, (c) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due,
(d) makes a general assignment, arrangement, or composition with or for the benefit of its creditors,
(e) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditor's rights, or a petition is presented for its winding-up or liquidation, (f) has a resolution passed for its winding up, official management or liquidation, other than pursuant to a consolidation, amalgamation, or merger, (g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian, or other similar official for all or substantially all of its assets, (h) has a secured party take possession of all or substantially all of its assets, or has a distress, execution, attachment, sequestration, or other legal process levied, enforced, or sued on or against all or substantially all of its assets, (i) files an answer or other pleading admitting or failing to contest the allegations of a petition filed against it in any proceeding of the foregoing nature, or U) takes any other action to authorize any of the actions set forth above. In the event of default, the non-defaulting Party may terminate this Agreement upon notice to the defaulting Party.

20. AUDIT AND CLAIMS PERIOD

Each Party and its duly authorized agents and/or representatives shall have reasonable access to the accounting records and other documents maintained by the other Party which relate to this Agreement, and shall have the right to audit such records at any reasonable time or times during the Term of this Agreement and for a period of up to three (3) years after termination of this Agreement. Claims as to shortage in quantity or defects in quality shall be made by written notice within thirty (30) days after the delivery in question or shall be deemed to have been waived.

21.
CONFIDENTIALITY

a.
Obligations. Each Party shall use reasonable efforts to retain the other Parties' Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 21 . Each Party further agrees to take the same care with the other Party's Confidential Information as it does with its own, but in no event less than a reasonable degree of care. Excepted from these obligations of confidence and non­ use is that information which:

(i)
is available, or becomes available, to the general public without fault of the receiving Party;
(ii)
was in the possession of the receiving Party on a non-confidential basis prior to receipt of the same from the disclosing Party;
(iii)
is obtained by the receiving Party without an obligation of confidence from a third party who is rightfully in possession of such information and, to the receiving Party's knowledge, is under no obligation of confidentiality to the disclosing Party; or
(iv)
is independently developed by the receiving Party without reference to or use of the disclosing Party's Confidential Information.


Page 13 of 22



For the purposes of this Section 21 , a specific item of Confidential Information shall not be deemed to be within the foregoing exceptions merely because it is embraced by, or underlies, more general information in the public domain or in the possession of the receiving Party.

b.
Required Disclosure . Notwithstanding Section 2 l (a) above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, or is required to disclose by the listing standards of the New York Stock Exchange, any of the disclosing Party's Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party's Confidential Information that it is required to disclose and shall cooperate with the disclosing Party in allowing the disclosing Party to obtain such protective order or other relief.

c.
Return of Information . Upon written request by the disclosing Party, all of the disclosing Party's Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party's legal department solely to the extent that such Party is required to keep a copy of such Confidential Information pursuant to Applicable Law, and the receiving Party shall be entitled to retain any Confidential Information in the electronic form or stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party's customary procedures and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 21 , and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.

d.
Receiving Party Personnel . The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement (the "Receiving Party Personnel”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provision of this Agreement, and will be required to abide by the terms thereof. Any third-party contractors that are given access to Confidential Information of a disclosing Party pursuant to the terms hereby shall be required to sign a written agreement pursuant to which such Receiving Party Personnel agree to be bound by confidentiality obligations consistent with the provisions of this Agreement.

e.
Survival . The obligation of confidentiality under this Section 21 shall survive the termination of this Agreement for a period of two (2) years.

22.
FORCE MAJEURE


Page 14 of 22


Neither Party shall be liable to the other Party for failure to perform any of its obligations under this Agreement to the extent such performance is hindered, delayed or prevented by Force Majeure (or a Force Majeure event suffered by the other Party). A Party which is unable, in whole or in part, to carry out its obligations under this Agreement due to Force Majeure shall give written notice to that effect as soon as reasonably possible to the other Party stating the circumstances underlying such Force Majeure. A Party claiming Force Majeure shall use commercially reasonable efforts to remove the cause, condition, event or circumstances of such Force Majeure and shall resume performance of any suspended obligation as soon as reasonably possible after termination of such Force Majeure.

Notwithstanding anything to the contrary set forth in this Agreement, the following shall not, under any circumstances, constitute an event of Force Majeure: (a) the lack of financial resources, or the inability of a Party to secure funds or make payments as required by this Agreement; (b) availability of more attractive markets for Crude Petroleum; (c) Customer's inability to economically receive, transport, and/or deliver Crude Petroleum to, on, or from BakkenLink Pipeline or other means under the terms of this Agreement; (d) TGP's inability to economically receive or deliver any Crude Petroleum on behalf of Customer under the terms of this Agreement; or (e) inefficiencies in operations.

23. COMPLIANCE WITH LAWS

This Agreement is in all respects subject to all applicable federal, state and local laws, and all directives, regulations and orders issued or published by any federal, state, or local board, commission or agency.

24.
NOTICES

All notices, requests, demands, and other communications hereunder will be in writing and will be deemed to have been duly given: (i) if by transmission by facsimile (receipt confirmed) or hand delivery, when delivered; (ii) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (iii) if mailed by an internationally recognized overnight express mail service such as Federal Express, UPS, or OHL Worldwide, one (!) Business Day after deposit therewith prepaid; or (iv) if by e-mail, one Business Day after delivery with receipt confirmed. All notices will be addressed to the Parties at the respective addresses as follows:
If to TGP:
 
If to Customer:
 
 
 
Logistics Contract Administration
 
Tesoro Refining & Marketing Company LLC
19100 Ridgewood Parkway
 
19100 Ridgewood Parkway
San Antonio, Texas 78259
 
San Antonio, TX 78259
 
 
 
 
 
Fax: 210-579-4517

 
 
 
 
 
For Scheduling Notices:
 
For Scheduling Notices:

    



Page 15 of 22


Attn: Dan Ruiz
 
Attn: Anne Gonzales
19100 Ridgewood Parkway
 
1801 California Street
San Antonio, Texas 78259
 
Suite 1200
Daniel.Ruiz@tsocorp.com
 
Denver, CO 80202
 
 
Banie.A.Gonzales@tsocorp.com
 
 
 
For legal notices:
 
For legal notices:
Attention: General Counsel
 
Attention: Commercial Legal Dept.
 
 
Fax: 210-745-4649
 
 
 
 
 
With a copy to: logisticslegal@tsocorp. com
 
 


25.
ASSIGNABILITY
This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto, provided, however, that this Agreement and the obligations of the Parties hereunder shall not be assignable by any Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed, or conditioned, except that a Party may assign its respective right duties, and obligations set forth under this Agreement, without consent, including the performance thereof, in whole or in part to (a) a majority owned or controlled subsidiary, whether direct or indirect, of its ultimate parent entity, (b) the successor of all or of substantially all of its business and assets, or (c) any legal entity that it may merge into or be consolidated with, provided, however, that an assignment shall not relieve a Party of any of its obligations hereunder which were incurred (or were deemed to have been incurred), whether by contract or operation of applicable law, prior to the effective date of such assignment. This Agreement is not intended to confer any rights or benefits on any persons other than the Parties, it being agreed that all third party beneficiary rights are hereby expressly denied.

26.
GOVERNING LAW

This Agreement shall be governed by the laws of the State of Texas without giving effect to its conflict of laws principles. Each Party hereby irrevocably submits to the exclusive jurisdiction of any federal court of competent jurisdiction situated in the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Bexar County, Texas. The Parties expressly and irrevocably submit to the jurisdiction of said Courts and irrevocably waive any objection which they may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Agreement brought in such Courts, irrevocably waive any claim that any such action, suit or proceeding brought in any such Court has been brought in an inconvenient forum and further irrevocably waive the right to object, with respect to such claim, action, suit or proceeding brought in any such Court, that such Court does not have jurisdiction over such Party. The Parties hereby irrevocably consent to the service of process by registered mail, postage prepaid, or by personal service within or without the State of Texas. Nothing contained herein shall affect the right to serve process in any manner permitted by law.

27.
COUNTERPARTS


Page 16 of 22





This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

28.
WAIVER OF JURY TRIAL

EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY PERFORMANCE OR FAILURE TO PERFORM OF ANY OBLIGATION HEREUNDER.

29.
SEVERABILITY

Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under applicable law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

30. ENTIRE AGREEMENT

This Agreement, including any exhibits hereto, constitute the sole and entire Agreement among the Parties with respect to its subject matter and all other matters contained herein, and supersede any and all prior and contemporaneous agreements, understandings, negotiations, or discussions, whether oral or written, and any representation, inducement, promise or agreement with respect to its subject matter that is not embodied herein shall be of no force or effect. This Agreement may only be amended or modified in a writing that references this Agreement and is signed by an officer or other authorized representative of or for both Parties.

[Signature Page Follows]


Page 17 of 22










IN WITNESS WHEREOF , the Parties hereto have duly executed this Agreement as of the date first written above.

TESORO GREAT PLAINS GATHERING & MARKETING LLC
TESORO REFINING & MARKETING COMPANY LLC
By:    /s/ KEITH M. CASEY                      
By:    /s/ GREGORY J. GOFF                        
Name:   Keith M. Casey
Name:   Gregory J. Goff
Title:   Executive Vice President, Marketing & Commercial
Title:   Chairman, President and Chief Executive
 
 
 
 
 
 

FRYBURGRAILTERMINALSE_IMAGE1.JPG
FRYBURGRAILTERMINALSE_IMAGE2.JPG


Page 18 of 22



Exhibit A


Unit Train Terms and Conditions related to services at Frybnrg Rail Terminal

I.     Rail Car Specifications.

Rail Car specifications must be approved by TGP in advance of arrival of the Unit Train.

2.
Rail Car Orientation.

All non-symmetrical Rail Cars must be orientated in the same direction.

3.
Nominations and Scheduling.

Deliveries by manifest trains are expressly prohibited unless agreed to by TGP in writing. Customer will nominate each Unit Train in writing to the representative named by TGP at the Fryburg Rail Terminal ("Terminal Representative"). Customer will nominate in writing each Unit Train on the 10th day of the month preceding the delivery month. The Terminal Representative shall confirm such nominations within five (5) Business Days of receipt and, if deemed necessary by TGP and after consultation with the Customer, provide alternative nominations that shall be mutually agreeable by both Parties. In a nomination, the Customer will provide: (a) the estimated time of arrival ("ETA"); (b) number of Rail Cars; and (c) the volume of Crude Petroleum to be delivered in a Unit Train; and (d) grade of crude oil Customer intends to load; and (e) appropriate shipping classification and packing group for the crude oil. The Customer will ensure that it provides any and all information reasonably requested by the Terminal Representative related to any nomination. Customer will work with Railway to minimize delays and promptly advise Terminal Representative of any delays and requests for schedule changes. TGP will work with Customer to accommodate requests for changes. TGP may at its sole discretion alter the nominations as long as it does not reduce Customer's throughput rights under this Agreement.

Customer will update TGP on the schedule for the arrival date of its Unit Train(s) by providing TGP with Unit Train's name six (6) hours in advance of its departure from the Rail Car unloading facility, the ETA at the Fryburg Rail Terminal at least five (5) Days (where applicable) in advance of the ETA, three (3) Days in advance of the ETA, twenty-four (24) hours in advance of the ETA, and twelve (12) hours prior to the ETA. TGP shall be designated the "in care of ' party and not the consignee of Crude Petroleum received at the Fryburg Rail Terminal.

4.
Ratability and Priority.

Customer shall schedule its Unit Trains on a ratable basis during a business month. All Unit Trains will be accepted on a first come, first served basis.

5.
Hours of Operation.

TGP shall operate the Fryburg Rail Terminal twenty-four (24) hours per day, seven (7) days per week and three hundred sixty five (365) days per year, unless the Parties mutually agree

Page 19 of 22




otherwise in writing. TGP may from time to time shut down the Fryburg Rail Terminal or curtail the quantities of Crude Petroleum offloaded there for such period of time as may be necessary to make repairs and/or for planned or unplanned maintenance, to comply with the Law or to prevent injuries to persons, damage to property; or harm to the environment. TGP shall use commercially reasonable efforts to minimize the downtime of the Fryburg Rail Terminal. Except in the case of emergencies or a Force Majeure Event, TGP shall provide Customer with (i) as much advance written notice of any shutdown or curtailment, including the expected duration of the shutdown or curtailment as reasonably practicable under the circumstances, and (ii) a minimum of thirty (30) Days written notice for any planned maintenance, including the expected duration of the such planned maintenance. All notices to Customer under this Section shall be given to the Customer representative listed in the Agreement.

6.
Compliance.

Customer shall maintain its Rail Cars in accordance with applicable Railway policies, Association of American Railroads (AAR) and Federal Railroad Administration (FRA) rules and regulations and all Laws. TGP shall, to the extent required by Law, inspect inbound Unit Trains for damage, leakage and AAR rules and regulations. TGP shall prepare the outbound loaded Unit Train for return shipment in accordance with Railway requirements, applicable federal regulations and Applicable Law, including Unit Train consist restoration, assuring properly functioning distributed power (DP) and final inspection of the Unit Train for release to the Railway. If Customer requests other inspections, such inspections will be provided upon written agreement between the Parties and at the sole cost and expense of Customer.

7.
Damaged Rail Cars.

Damaged Rail Cars which cannot be safely loaded at the Fryburg Terminal will be moved to the bad order track at Customer's sole risk. Once on the bad order track, TGP may, with Customer's consent, use commercially reasonable efforts to repair such damaged Rail Cars at Customer's sole risk, cost and expense. Measurements, title, custody, Crude Petroleum quality and other data associated with the bad order Rail Cars will be coordinated between Customer and TGP on a case by-case basis. If TGP deems it is not able to make the repairs, it shall notify Customer and Customer shall promptly coordinate for the repair or removal of Rail Cars from the bad order track in a timely manner. TGP may assess Customer a fee of $20 dollars per Rail Car per day for any Rail Cars remaining on the bad order track beyond seven (7) Days.

8.
Additional Services.

All fees assessed by the Railway associated with transportation of Crude Petroleum are for the account of and are to be paid by Customer. Except as otherwise provided in the Agreement, TGP will not provide any services to Customer's Unit Train and Rail Cars including, but not limited to, repairs and maintenance of Rail Cars and fueling of locomotives. If TGP provides any service to a Rail Car for which a fee is not specifically set forth in this Exhibit A, Customer will pay TGP the cost of such services.

9.
Rotating Rail Cars or Locomotives.


Page 20 of 22





The Fryburg Rail Terminal does not have the ability to rotate Rail Cars or locomotives.

I 0.     Modifications.

With notice to and consent of Customer, which consent shall not be unreasonably withheld, TGP reserves the right to modify this Exhibit A to improve operations at the Fryburg Rail Terminal.


Page 21 of 22




Exhibit B

TGP Receipt Locations and Fryburg Rail Terminal

Receipt Locations
 
Location
 
Connections
Dry Creek
 
McKenzie County, ND
 
Pipeline Receipts From Arrow Midstream
Pipeline Deliveries to BakkenLink Pipeline
No Trucking
 
 
 
 
 
Three Forks
 
McKenzie County, ND
 
Pipeline Receipts From Targa Badlands
Pipeline Deliveries to BakkenLink Pipeline
No Trucking
 
 
 
 
 
Watford City
 
McKenzie County, ND
 
Pipeline Receipts From Enable Midstream
Pipeline Deliveries to BakkenLink Pipeline
3 TGP Truck Unloading Spots to BakkenLink Pipeline
 
 
 
 
 
Dunn
 
McKenzie County, ND
 
3 TGP Truck Unloading Spots to BakkenLink Pipeline
 
 
 
 
 
Fryburg
 
Billings County, ND
 
Pipeline Receipts From BakkenLink Pipeline
3 TGP Truck Unloading Spots to Fryburg Rail Terminal
Unit Train Loading


Page 22 of 22
Exhibit 10.11

FIRST AMENDMENT TO TERMINAL SERVICES AGREEMENT
This First Amendment to Terminal Services Agreement (this “ Amendment ”) is dated as of September 28, 2018, but effective August 6, 2018 (the “ Amendment Effective Date ”), by and between Tesoro Great Plains Gathering & Marketing LLC (“ TGP ”) and Tesoro Refining & Marketing Company LLC (“ Customer ”).
RECITALS
WHEREAS , on January 1, 2017, the Parties entered into that certain Terminal Services Agreement pursuant to which TGP receives, temporarily stores, delivers and loads crude Petroleum from Customer at the Receipt Locations, and Customer ships Crude Petroleum from the Receipt Locations for the delivery and rail loading of Customer’s Crude Petroleum by TGP at the Fryburg Rail Terminal, pursuant to the terms and conditions contained therein (the “ Original Agreement ”); and
WHEREAS , the Parties desire to amend the Original Agreement to revise the Terminal Fees, pursuant to the terms and conditions contained herein.
NOW, THEREFORE , in consideration of the covenants and obligations contained herein, the Parties hereby agree as follows:
1.
Amendments to the Original Agreement .
Section 5 is deleted in its entirety and replaced with the following, which shall be effective as of the Amendment Effective Date:
5. TERMINAL FEES

For the services provided by TGP under this Agreement, Customer shall pay monthly the fees (“ Terminal Fees ”) in accordance with the following table for (i) each net Barrel of Crude Petroleum received by truck at the various truck unloading locations listed below, and (ii) each net Barrel of Crude Petroleum loaded onto Customer's Unit Train at the Fryburg Rail Terminal.


Receipt Locations
Fee per Barrel
Service
Fryburg Rail Terminal
$0.5079
Truck Unload
Watford City Terminal
$0.1524
Truck Unload
Dunn Terminal
$0.1524
Truck Unload
Fryburg Rail Terminal
$0.5000
Unit Train Loading


1




Each of the Terminal Fees indicated above shall be subject to adjustment at each annual anniversary of the Effective Date, or if the anniversary date is not on the first day of a Month, then on the first day of the Month following the anniversary date. Unless the Parties agree in writing otherwise sixty (60) Days prior to the end of the Initial Term, each of the Terminal Fees shall be adjusted by the percentage increase or decrease in the Consumer Price Index for Al 1 Urban Consumers, Midwest Region area as published by the US Department of Labor; Bureau of Labor Statistics (the “ CPI - U ”). The percentage increase in the CPl-U means the percentage increase in the CPI-U over the first twelve (12) of the fifteen (15) Months preceding the escalation date.”

2.
Miscellaneous.
(a)    Other than as set forth above, the Original Agreement shall remain in full force and effect as written.

(b)    Except as otherwise provided herein, all costs and expenses (including legal and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Amendment and the transactions contemplated hereby shall be paid by the Party incurring such expenses.

(c)    This Amendment and the legal relations between the Parties shall be governed by and construed in accordance with Section 26 of the Original Agreement.

(d)    This Amendment constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to the subject matter hereof.

(e)    This Amendment may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Either Party’s delivery of an executed counterpart signature page by facsimile (or electronic .pdf format transmission) is as effective as executing and delivering this Amendment in the presence of the other Party. No Party shall be bound until such time as all of the Parties have executed counterparts of this Amendment.

(f)    This Amendment is solely for the benefit of the Parties and should not be deemed to confer upon third parties any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Amendment.

(g)    The invalidity or unenforceability of any term or provision of this Amendment in any situation or jurisdiction shall not affect the validity or enforceability of the other terms or provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction and the remaining terms and provisions shall remain in full force and effect, unless doing so would result in an interpretation of this Amendment that is manifestly unjust.
[Signature Page Follows]

2




IN WITNESS WHEREOF , the Parties hereto have duly executed this Amendment as of the date first written above.


Tesoro Refining & Marketing Company LLC

By:   /s/ Gregory J. Goff          
Name: Gregory J. Goff
Title: President and Chief Executive Officer


Tesoro Logistics Operations LLC

By:   /s/ Steven M. Sterin           
Name: Steven M. Sterin
Its: President and Chief Financial Officer





Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Gary R. Heminger , certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Andeavor Logistics LP;

2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d)
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:
November 7, 2018
/s/ GARY R. HEMINGER
 
 
Gary R. Heminger
 
 
Chief Executive Officer of Tesoro Logistics GP, LLC
 
 
(the general partner of Andeavor Logistics LP)




Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, D. Andrew Woodward , certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Andeavor Logistics LP;

2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d)
Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:
November 7, 2018
/s/ D. ANDREW WOODWARD
 
 
D. Andrew Woodward
 
 
Principal Financial Officer of Tesoro Logistics GP, LLC
 
 
(the general partner of Andeavor Logistics LP)





Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Andeavor Logistics LP (the "Partnership") on Form 10-Q for the period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary R. Heminger , Chief Executive Officer of Tesoro Logistics GP, LLC , the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ GARY R. HEMINGER
Gary R. Heminger
Chief Executive Officer of Tesoro Logistics GP, LLC
(the general partner of Andeavor Logistics LP)
November 7, 2018

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.





Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Andeavor Logistics LP (the "Partnership") on Form 10-Q for the period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, D. Andrew Woodward , Principal Financial Officer of Tesoro Logistics GP, LLC , the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ D. ANDREW WOODWARD
D. Andrew Woodward
Principal Financial Officer of Tesoro Logistics GP, LLC
(the general partner of Andeavor Logistics LP)
November 7, 2018

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.