--------------------------------------------------------------------------------

Exhibit 10.5

Lease Agreement

between

Parish of St. James,
State of Louisiana

and

NuStar Logistics, L.P.

Dated as of October 1, 2010

--------------------------------------------------------------------------------

$50,000,000
Parish of St. James, State of Louisiana
Revenue Bonds
(NuStar Logistics, L.P. Project)
Series 2010A

--------------------------------------------------------------------------------

The interest of the PARISH OF ST. JAMES, STATE OF LOUISIANA (the “Issuer”) in
this Lease Agreement has been assigned (except for “Reserved Rights” defined in
this Lease Agreement) pursuant to the Indenture of Trust dated as of the date
hereof from the Issuer to U.S. BANK NATIONAL ASSOCIATION, as trustee (the
“Trustee”), and is subject to the security interest of the Trustee thereunder.

--------------------------------------------------------------------------------

Lease Agreement

This Lease Agreement made and entered into as of October 1, 2010 is made by and
between the Parish of St. James, State of Louisiana, a political subdivision
under the Constitution and laws of the State of Louisiana (the “Issuer”), and
NuStar Logistics, L.P., a Delaware limited partnership (the “Company”).

Witnesseth:

That the parties hereto, intending to be legally bound hereby, and for and in
consideration of the premises and the mutual covenants hereinafter contained, do
hereby covenant, agree and bind themselves as follows: provided, that any
obligation of the Issuer created by or arising out of this Agreement shall never
constitute a debt or a pledge of the faith and credit or the taxing power of the
Issuer or any political subdivision or taxing district of the State of Louisiana
(the “State”) but shall be payable solely out of the Trust Estate (as defined in
the Indenture), anything herein contained to the contrary by implication or
otherwise notwithstanding:

-1-

--------------------------------------------------------------------------------

ARTICLE I.

DEFINITIONS

SECTION 1.01.          Definition of Terms.  All capitalized, undefined terms
used herein shall have the same meanings as used in Article I of the hereinafter
defined Indenture.  In addition, the following words and phrases shall have the
following meanings:

“Completion Date” means the date with respect to which with, except for amounts
retained by the Trustee at the Company’s direction to pay any Cost of the
Project not then due and payable, (i) construction of the Project has been
completed and all costs of labor, services, materials and supplies used in such
construction have been paid, (ii) all equipment for the Project has been
installed, such equipment so installed is suitable and sufficient for the
operation of the Project, and all costs and expenses incurred in the acquisition
and installation of such equipment have been paid, and (iii) all other
facilities necessary in connection with the Project have been acquired,
constructed and installed and all costs and expenses incurred in connection
therewith have been paid.

“Cost” with respect to the Project shall be deemed to include all items
permitted to be financed under the provisions of the Code and the Act.

“Default” means any Default under this Agreement as specified in and defined by
Section 8.01 hereof.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Indenture” means the Indenture of Trust dated as of this date between the
Issuer and the Trustee, pursuant to which the Bonds are authorized to be issued,
and any amendments and supplements thereto.

“Issuance Costs” means all costs that are treated as costs of issuing or
carrying the Bonds under existing Treasury Department regulations and rulings,
including, but not limited to, (a) underwriter’s spread (whether realized
directly or derived through purchase of the Bonds at a discount below the price
at which they are expected to be sold to the public); (b) counsel fees
(including bond counsel, underwriter’s counsel, Issuer’s counsel and Company
counsel, as well as any other specialized counsel fees incurred in connection
with the issuance of the Bonds); (c) financial advisory fees incurred in
connection with the issuance of the Bonds; (d) rating agency fees; (e) Trustee
fees incurred in connection with the issuance of the Bonds; (f) paying agent and
certifying and authenticating agent fees related to issuance of the Bonds; (g)
accountant fees related to the issuance of the Bonds; (h) printing costs of the
Bonds and of the preliminary and final offering materials; (i) publication costs
associated with the financing proceedings; and (j) costs of engineering and
feasibility studies necessary to the issuance of the Bonds; provided, that bond
insurance premiums and certain credit enhancement fees, to the extent treated as
interest expense under applicable regulations, shall not be treated as “Issuance
Costs”.

-2-

--------------------------------------------------------------------------------

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition (financial or otherwise) of the Company taken as
a whole, (b) the ability of the Company to perform any of its obligations under
this Lease Agreement or (c) the rights of or benefits available to the Issuer
under this Agreement.

“Net Proceeds” means the proceeds of the Bonds reduced by amounts in a
reasonably required reserve or replacement fund.

“Project” means the facilities described in Exhibit A hereto.

“Qualified Project Costs” means Costs and expenses of the Project which
constitute land costs or costs for property of a character subject to the
allowance for depreciation excluding specifically working capital and inventory
costs, provided, however, that (i) costs or expenses paid more than sixty (60)
days prior to the adoption by the Issuer of its resolution on June 16, 2010,
declaring its intent to reimburse Project expenditures with Bond proceeds, shall
not be deemed to be Qualified Project Costs; (ii) Issuance Costs shall not be
deemed to be Qualified Project Costs; (iii) interest during the Construction
Period shall be allocated between Qualified Project Costs and other Costs and
expenses to be paid from the proceeds of the Bonds; (iv) interest following the
Construction Period shall not constitute a Qualified Project Cost; (v) letter of
credit fees and municipal bond insurance premiums which represent a transfer of
credit risk shall be allocated between Qualified Project Costs and other costs
and expenses to be paid from the proceeds of the Bonds; and (vi) letter of
credit fees and municipal bond insurance premiums which do not represent a
transfer of credit risk shall not constitute Qualified Project Costs.

“Requisition” means a written request for a disbursement from the Project Fund,
signed by a Company Representative, substantially in the form attached hereto as
Exhibit B and satisfactorily completed as contemplated by said form.

“Reserved Rights” means amounts payable to the Issuer under Sections 4.02(b),
7.02 and 8.04 hereof.

“State” means the State of Louisiana.

“Term of Agreement” means the duration of the leasehold interest created hereby
as specified in Section 9.01 hereof.

SECTION 1.02.          Uses of Phrases.  Words of the masculine gender shall be
deemed and construed to include correlative words of the feminine and neuter
genders.  Unless the context shall otherwise indicate, the words “Bond”,
“Bondholder”, “Owner”, “registered owner” and “person” shall include the plural
as well as the singular number, and the word “person” shall include corporations
and associations, including public bodies, as well as persons.  Any percentage
of Bonds, specified herein for any purpose, is to be figured on the unpaid
principal amount thereof then Outstanding.  All references herein to specific
Sections of the Code refer to such Sections of the Code and all successor or
replacement provisions thereto.

-3-

--------------------------------------------------------------------------------

ARTICLE 2

REPRESENTATIONS, COVENANTS AND WARRANTIES

SECTION 2.01.           Representations, Covenants and Warranties of the
Issuer.  The Issuer represents, covenants and warrants that:

(a)       The Issuer is a political subdivision of the State of Louisiana. 
Under the provisions of the Act, the Issuer is authorized to enter into the
transactions contemplated by this Agreement and the Indenture and to carry out
its obligations hereunder and thereunder.  The Issuer has been duly authorized
to execute and deliver this Agreement and the Indenture.

(b)          The Issuer covenants that it will not pledge the amounts derived
from this Agreement other than as contemplated by the Indenture.

SECTION 2.02.           Representations, Covenants and Warranties of the
Company.  The Company represents, covenants and warrants that:

(a)        The Company is a limited partnership duly organized and validly
existing under the laws of the State of Delaware. The Company is not in
violation of any provision of its certificate of limited partnership, has the
power to enter into this Agreement, and has duly authorized the execution and
delivery of this Agreement, and is qualified to do business and is in good
standing under the laws of the State.

(b)         The Company (i) shall preserve, renew, and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges, and
franchises material to the conduct of its business (provided that the foregoing
shall not prohibit any merger, consolidation, sale, lease, or transfer permitted
under the following clause (ii)); and (ii) shall not without the prior written
consent of the Credit Provider (during any Credit Facility Period) and the
Trustee (during any Interest Period that is not a Credit Facility Period)
consolidate with or merge into any other person or sell, lease, or transfer its
properties and assets as, or substantially as, an entity to any person unless
(1) (A) in the case of a merger, the Company is the surviving entity, or (B) the
person formed by such consolidation or into which the Company is merged or the
person that acquires by sale or transfer, or that leases the properties and
assets of the Company as, or substantially as, an entity expressly assumes by an
assumption agreement hereto, executed and delivered to the Issuer, all of the
obligations of the Company under this Lease Agreement; (2) the surviving entity
or successor person is a person organized and existing under the laws of the
United States of America, any state thereof, or the District of Columbia; (3)
immediately after giving effect to such transaction, no Default shall have
occurred and be continuing; and (4) the Company has delivered to the Issuer an
officers’ certificate stating that such consolidation, merger, conveyance, sale,
transfer, or lease complies with this Section 2.02(b).

(c)       Neither the execution and delivery of this Agreement or the
Remarketing Agreement, nor the consummation of the transactions contemplated
hereby and thereby, nor the fulfillment of or compliance with the terms and
conditions hereof or thereof conflicts with or results in a breach of the terms,
conditions, or provisions of any agreement or instrument to which the Company is
now a party or by which the Company is bound, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any lien, charge
or encumbrance whatsoever upon any of the property or assets of the Company
under the terms of any such instrument or agreement, except where such conflict,
breach, default, creation or imposition individually or in the aggregate could
not reasonably be expected to result in a Material Adverse Effect.

-4-

--------------------------------------------------------------------------------

(d)       There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, public board or body, known to be pending
or threatened against or affecting the Company or any of its officers, nor to
the best knowledge of the Company is there any basis therefor, wherein an
unfavorable decision, ruling, or finding would materially adversely affect the
transactions contemplated by this Agreement or which would adversely affect, in
any way, the validity or enforceability of the Bonds, this Agreement, the
Remarketing Agreement, or any agreement or instrument to which the Company is a
party, used or contemplated for use in the consummation of the transactions
contemplated hereby.

(e)          The Project is of the type authorized and permitted by the Act, and
its estimated Cost is not less than $50,000,000.

(f)          The proceeds from the sale of the Bonds will be used only for
payment of Costs of the Project.

(g)         The Company will use due diligence to cause the Project to be
operated in accordance with the laws, rulings, regulations and ordinances of the
State and the departments, agencies and political subdivisions thereof.  The
Company has obtained or caused to be obtained all requisite approvals of the
State and of other federal, state, regional and local governmental bodies for
the acquisition, construction, improving and equipping of the Project.

(h)         The Company will fully and faithfully perform all the duties and
obligations which the Issuer has covenanted and agreed in the Indenture to cause
the Company to perform and any duties and obligations which the Company is
required in the Indenture to perform.  The foregoing shall not apply to any duty
or undertaking of the Issuer which by its nature cannot be delegated or
assigned.

(i)           The issuance of the Bonds by the Issuer to finance the
acquisition, construction and installation of the Project has induced the
Company to locate the Project in the Parish of St. James, State of Louisiana
which will directly result in an increase in employment opportunities in such
Parish.

(j)         The Company does not “control” the Credit Provider, either directly
or indirectly through one or more controlled companies, within the meaning of
Section 2(a)(9) of the Investment Company Act of 1940.

SECTION 2.03.          Tax-Exempt Status of the Bonds.  The Company hereby
represents, warrants and agrees that the Tax Regulatory Agreement executed and
delivered by the Company concurrently with the issuance and delivery of the
Bonds is true, accurate and complete in all material respects as of the date on
which executed and delivered.

SECTION 2.04.          Notice of Determination of Taxability.  Promptly after
the Company first becomes aware of any Determination of Taxability, the Company
shall give written notice thereof to the Issuer and the Trustee.

-5-

--------------------------------------------------------------------------------

ARTICLE 3

ACQUISITION AND CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS

SECTION 3.01.        Agreement to Acquire, Construct and Install the Project. 
The Company agrees to make all contracts and do all things necessary for the
acquisition, construction and installation of the Project.  The Company further
agrees that it will acquire, construct, and install the Project with all
reasonable dispatch and use its commercially reasonable efforts to cause
acquisition, construction, installation and occupancy of the Project.  The
Company expects the Project to be completed by January of 2012, or as soon
thereafter as may be practicable, delays caused by force majeure as defined in
Section 8.01 hereof only excepted; but if for any reason such acquisition,
construction and installation is not completed by said date there shall be no
resulting liability on the part of the Company and no diminution in or
postponement of the payments required in Section 4.02 hereof to be paid by the
Company.

SECTION 3.02.          Agreement to Issue the Bonds; Application of Bond
Proceeds.  In order to provide funds for the payment of the Cost of the Project,
the Issuer, concurrently with the execution of this Agreement, will issue, sell,
and deliver the Bonds and deposit the net proceeds thereof with the Trustee in
the Project Fund.

SECTION 3.03.          Disbursements from the Project Fund.  The Issuer has, in
the Indenture, authorized and directed the Trustee to make disbursements from
the Project Fund to pay the Costs of the Project, or to reimburse the Company
for any Cost of the Project paid by the Company.  Except with respect to payment
of Issuance Costs on the date of issuance of the Bonds, the Trustee shall not
make any disbursement from the Project Fund until the Company shall have
provided the Trustee with a Requisition.

SECTION 3.04.        Furnishing Documents to the Trustee.  The Company agrees to
cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Project Fund in accordance with Section 3.03 hereof.

SECTION 3.05.        Establishment of Completion Date.  (a)  The Completion Date
shall be evidenced to the Issuer and the Trustee by a certificate signed by a
Company Representative stating that, except for amounts retained by the Trustee
at the Company’s direction to pay any Cost of the Project not then due and
payable, (i) construction of the Project has been completed and all costs of
labor, services, materials and supplies used in such construction have been
paid, (ii) all equipment for the Project has been installed, such equipment so
installed is suitable and sufficient for the operation of the Project, and all
costs and expenses incurred in the acquisition and installation of such
equipment have been paid, and (iii) all other facilities necessary in connection
with the Project have been acquired, constructed and installed and all costs and
expenses incurred in connection therewith have been paid. Notwithstanding the
foregoing, such certificate shall state that it is given without prejudice to
any rights against third parties which exist at the date of such certificate or
which may subsequently come into being.  Forthwith upon completion of the
acquisition, construction and installation of the Project, the Company agrees to
cause such certificate to be furnished to the Issuer and the Trustee.  Upon
receipt of such certificate, the Trustee shall retain in the Project Fund a sum
equal to the amounts necessary for payment of the Costs of the Project not then
due and payable according to such certificate.  If any such amounts so retained
are not subsequently used, prior to any transfer of said amounts to the General
Account of the Bond Fund as provided below, the Trustee shall give notice to the
Company of the failure to apply said funds for payment of the Costs of the
Project.  Any amount not to be retained in the Project Fund for payment of the
Costs of the Project, and all amounts so retained but not subsequently used,
shall be transferred by the Trustee into the General Account of the Bond Fund.

-6-

--------------------------------------------------------------------------------

(b)         If, upon the Completion Date, at least ninety‑five percent (95%) of
the Net Proceeds of the Bonds have not been used to pay Qualified Project Costs,
any amount (exclusive of amounts retained by the Trustee in the Project Fund for
payment of Costs of the Project not then due and payable) remaining in the
Project Fund shall be transferred by the Trustee into the General Account of the
Bond Fund and used by the Trustee (a) to redeem, or to cause the redemption of,
Bonds on the earliest redemption date permitted by the Indenture without a
premium, (b) to purchase Bonds on the open market prior to such redemption date
at prices not in excess of one hundred percent (100%) of the principal amount of
such Bonds, or (c) for any other purpose provided that the Trustee is furnished
with an opinion of Bond Counsel to the effect that such use is lawful under the
Act and will not require that interest on the Bonds be included in gross income
for federal income tax purposes.  Until used for one or more of the foregoing
purposes, such segregated amount may be invested as permitted by the Indenture
provided that prior to any such investment the Trustee is provided with an
opinion of Bond Counsel to the effect that such investment will not require that
interest on the Bonds be included in gross income for federal income tax
purposes.

SECTION 3.06.          Company Required to Pay in Event Project Fund
Insufficient.  In the event the moneys in the Project Fund available for payment
of the Costs of the Project should not be sufficient to pay the Costs of the
Project in full, the Company agrees to complete the Project and to pay that
portion of the Costs of the Project in excess of the moneys available therefor
in the Project Fund. The Issuer does not make any warranty, either express or
implied, that the moneys paid into the Project Fund and available for payment of
the Costs of the Project will be sufficient to pay all of the Costs of the
Project.  The Company agrees that if after exhaustion of the moneys in the
Project Fund, the Company should pay any portion of the Costs of the Project
pursuant to the provisions of this Section, the Company shall not be entitled to
any reimbursement therefor from the Issuer, the Trustee or the Owners of any of
the Bonds, nor shall the Company be entitled to any diminution of the amounts
payable under Section 4.02 hereof.

SECTION 3.07.           Special Arbitrage Certifications.  The Company and the
Issuer covenant not to cause or direct any moneys on deposit in any fund or
account to be used in a manner which would cause the Bonds to be classified as
“arbitrage bonds” within the meaning of Section 148 of the Code, and the Company
certifies and covenants to and for the benefit of the Issuer and the Owners of
the Bonds that so long as there are any Bonds Outstanding, moneys on deposit in
any fund or account in connection with the Bonds, whether such moneys were
derived from the proceeds of the sale of the Bonds or from any other sources,
will not be used in a manner which will cause the Bonds to be classified as
“arbitrage bonds” within the meaning of Section 148 of the Code.

-7-

--------------------------------------------------------------------------------

ARTICLE 4

LEASE PROVISIONS;
SUBSTITUTE CREDIT FACILITY

SECTION 4.01.          Agreement to Lease the Project.  The Issuer hereby
demises and leases to the Company, and the Company hereby leases from the
Issuer, for and during the Term of Agreement, the Project, including the
building and the Project Equipment, which are located on the Project Land,
described in Exhibit A hereto.

SECTION 4.02.          Rental Payments.  (a)  The Company hereby covenants and
agrees to pay base rental for the use and occupancy of the Project, as follows: 
on or before any Interest Payment Date for the Bonds or any other date that any
payment of interest, premium, if any, or principal or Purchase Price is required
to be made in respect of the Bonds pursuant to the Indenture, until the
principal of, premium, if any, and interest on the Bonds shall have been fully
paid or provision for the payment thereof shall have been made in accordance
with the Indenture, in immediately available funds, a sum which, together with
any other moneys available for such payment in any account of the Bond Fund,
will enable the Trustee to pay the amount payable on such date as Purchase Price
or principal of (whether at maturity or upon redemption or acceleration or
otherwise), premium, if any, and interest on the Bonds as provided in the
Indenture; provided, however, that the obligation of the Company to make any
rental payment hereunder shall be deemed satisfied and discharged to the extent
of the corresponding payment made by the Credit Provider to the Trustee under
the Credit Facility.

It is understood and agreed that all rental payments payable by the Company
under subsection (a) of this Section 4.02 are assigned by the Issuer to the
Trustee for the benefit of the Owners of the Bonds.  The Company assents to such
assignment. The Issuer hereby directs the Company and the Company hereby agrees
to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection.

(b)          The Company will also pay, as additional rent, the reasonable fees
and expenses of the Issuer related to the issuance of the Bonds, payable on the
date of issuance of the Bonds.

(c)          The Company will also pay, as additional rent, the reasonable fees
and expenses of the Trustee under the Indenture and all other amounts which may
be payable to the Trustee under Section 10.02 of the  Indenture, such amounts to
be paid directly to the Trustee for the Trustee’s own account as and when such
amounts become due and payable.

(d)          The Company will also pay, as additional rent, any amounts due and
payable under Section 4.05 hereof.

(e)          In the event the Company should fail to make any of the rental
payments required in this Section 4.02, the item or installment so in default
shall continue as an obligation of the Company until the amount in default shall
have been fully paid, and the Company agrees to pay the same with interest
thereon, to the extent permitted by law, from the date when such payment was
due, at the rate of interest borne by the Bonds.

-8-

--------------------------------------------------------------------------------

SECTION 4.03.          Obligations of the Company Unconditional.  The
obligations of the Company to make the payments required in Section 4.02 and to
perform and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company by the Issuer
or the Trustee, and, until such time as the principal of, premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company (i)
will not suspend or discontinue any rental payments provided for in Section 4.02
hereof, (ii) will perform and observe all other agreements contained in this
Agreement and (iii) except as otherwise provided herein, will not terminate the
Term of Agreement for any cause, including, without limiting the generality of
the foregoing, failure of the Company to complete the acquisition, construction
and installation of the Project, the occurrence of any acts or circumstances
that may constitute failure of consideration, eviction or constructive eviction,
destruction of or damage to the Project, the taking by eminent domain of title
to or temporary use of any or all of the  Project, commercial frustration of
purpose, any change in the tax or other laws of the United States of America or
of the State or any political subdivision of either thereof or any failure of
the Issuer or the Trustee to perform and observe any agreement, whether express
or implied, or any duty, liability or obligation arising out of or connected
with this Agreement. Nothing contained in this Section shall be construed to
release the Issuer from the performance of any of the agreements on its part
herein contained, and in the event the Issuer or the Trustee should fail to
perform any such agreement on its part, the Company may institute such action
against the Issuer or the Trustee as the Company may deem necessary to compel
performance so long as such action does not abrogate the obligations of the
Company contained in the first sentence of this Section.

SECTION 4.04.          Substitute Credit Facility.  Subject to the conditions
set forth in this Section 4.04, the Company may provide for the delivery to the
Trustee of a Substitute Credit Facility.  The Company shall furnish written
notice to the Trustee, not less than twenty days prior to the Mandatory Purchase
Date, (a) notifying the Trustee that the Company is exercising its option to
provide for the delivery of a Substitute Credit Facility to the Trustee, (b)
setting forth the Mandatory Purchase Date in connection with the delivery of
such Substitute Credit Facility, which shall in any event be an Interest Payment
Date that is not less than two Business Days prior to the expiration date of the
Credit Facility then in effect with respect to the Bonds, and (c) instructing
the Trustee to furnish notice to the Bondholders regarding the Mandatory
Purchase Date at least fifteen days prior to the Mandatory Purchase Date, as
more fully described in Section 4.01(b) of the Indenture and Exhibit B thereto. 
Any Substitute Credit Facility shall be delivered to the Trustee prior to such
Mandatory Purchase Date and shall be effective on and after such Mandatory
Purchase Date. On or before the date of such delivery of a Substitute Credit
Facility to the Trustee, the Company shall furnish to the Trustee (a) a written
opinion of Bond Counsel stating that the delivery of such Substitute Credit
Facility will not adversely affect the exclusion from gross income of interest
on the Bonds for federal income tax purposes; and (b) a written opinion of
counsel to the Substitute Credit Provider to the effect that the Substitute
Credit Facility is a legal, valid, binding and enforceable obligation of the
Substitute Credit Provider in accordance with its terms.

SECTION 4.05.          Exemption from Ad Valorem Tax.  The Company and Issuer
hereby acknowledge, understand and agree that, while the Project is owned by the
Issuer, the Project will be exempt from all ad valorem taxes.  Notwithstanding
such exemption, the Company hereby agrees, commencing on the December 31 that is
at least eleven full years after establishment of the Completion Date and on
each December 31 thereafter, so long as the Issuer owns the Project, to make a
payment in lieu of tax, in an amount equal to, but not exceeding, the amount
that would be due and payable as ad valorem tax on the Project if the Company
owned the Project.  Such payment in lieu of tax shall be paid to the person or
entity collecting tax in the Parish of St. James and shall be distributed to
taxing bodies in the same manner as ad valorem tax collections are distributed.

-9-

--------------------------------------------------------------------------------

SECTION 4.06.        Removal or Property.  The Issuer shall not be under any
obligation to renew, repair or replace any item of inadequate, obsolete, worn
out, unsuitable, undesirable or unnecessary equipment, fixtures or furnishings
comprising a part of the Project.  In any instance where the Company in its
sound discretion determines that any items of the Project have become
inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, the
Company may remove such items of the Project, and  (on behalf of the Issuer)
sell, trade-in, exchange or otherwise dispose of them (as a whole or in part)
without any responsibility or accountability to the Issuer or the Trustee
therefor.

The removal of any portion of the Project pursuant to the provisions of this
Section shall not entitle the Company to any abatement or diminution of the
rents payable under Section 4.02 hereof.

SECTION 4.07.         Additional Property Constituting a Part of the Project. 
Notwithstanding any provision of this Agreement to the contrary, after the
Completion Date, the Company may elect to have any real or personal property,
machinery, equipment, furniture or fixtures acquired at the sole cost of the
Company included as part of the Project by delivering to the Trustee and the
Issuer written notice of the Company’s election to have such property included
as part of the Project.  Upon the filing of such written notice with the Trustee
and the Issuer, such property specified in said notice shall become a part of
the Project, up to a total cost of $10,000,000.

-10-

--------------------------------------------------------------------------------

ARTICLE 5

PREPAYMENT AND REDEMPTION

SECTION 5.01.         Prepayment and Redemption.  The Company shall have the
option to prepay its obligations hereunder at the times and in the amounts as
necessary to exercise its option to cause the Bonds to be redeemed as set forth
in the Indenture and in the Bonds.  The Company hereby agrees that it shall
prepay its obligations hereunder at the times and in the amounts as necessary to
accomplish the mandatory redemption of the Bonds as set forth in the Indenture
and in the Bonds.  The Issuer, at the request of the Company, shall forthwith
take all steps (other than the payment of the money required for such
redemption) necessary under the applicable redemption provisions of the
Indenture to effect redemption of all or part of the Outstanding Bonds, as may
be specified by the Company, on the date established for such redemption.

-11-

--------------------------------------------------------------------------------

ARTICLE 6

SPECIAL COVENANTS

SECTION 6.01.          No Warranty of Condition or Suitability by the Issuer. 
THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR
THE CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY.  THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE
PROJECT.  THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE
PROJECT OR ITS SUITABILITY FOR THE COMPANY’S PURPOSES.

SECTION 6.02.          Access to the Project.  The Company agrees that the
Issuer, the Credit Provider, the Trustee and their duly authorized agents,
attorneys, experts, engineers, accountants and representatives shall have the
right to inspect the Project at all reasonable times and on reasonable notice. 
The Issuer, the Credit Provider, the Trustee and their duly authorized agents
shall also be permitted, at all reasonable times, to examine the books and
records of the Company with respect to the Project.

SECTION 6.03.          Further Assurances and Corrective Instruments.  The
Issuer and the Company agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for carrying out the expressed intention of this Agreement.

SECTION 6.04.          Issuer and Company Representatives.  Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative.  The Trustee shall be authorized to act on any such approval or
request.

SECTION 6.05.          Financing Statements.  The Company agrees to execute and
file or cause to be executed and filed any and all financing statements or
amendments thereof or continuation statements necessary to perfect and continue
the perfection of the security interests granted in the Indenture.  The Company
shall pay all costs of filing such instruments.

SECTION 6.06.          Covenants to Provide Ongoing Disclosure.  The Company
hereby covenants and agrees that, upon the exercise by the Company of the
Conversion Option to elect a Long Term Period, the Company shall enter into a
written undertaking for the benefit of the holders of the Bonds, as required by
Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 under the
Securities Exchange Act of 1934, as amended (17 CFR Part 240, §240.15c2-12) (the
“Rule”); provided, however, that the Company shall not be obligated to enter
into such written undertaking if the Company shall furnish to the Trustee, prior
to the exercise of the Conversion Option, an opinion of Bond Counsel that,
notwithstanding such election by the Company, the Rule is not applicable to the
Bonds.

SECTION 6.07.        Notice of Control.  The Company shall provide written
notice to the Trustee and the Remarketing Agent thirty days prior to the
consummation of any transaction that would result in the Company controlling the
Credit Provider or being controlled by the Credit Provider within the meaning of
Section 2(a)(9) of the Investment Company Act of 1940.  The Company acknowledges
that pursuant to Section 5.10 of the Indenture, upon receipt of such notice, the
Trustee will provide notice thereof to the Owners, and the Company hereby
consents thereto.

-12-

--------------------------------------------------------------------------------

SECTION 6.08.          Acknowledgement and Covenant Regarding Commercial Paper
or Long Term Period.  The Company acknowledges that the Bonds shall initially be
rated only while the Interest Period for the Bonds is a Daily Period or a Weekly
Period.  Further, the Company acknowledges that in the event that it shall
select a Commercial Paper Period or Long Term Period as the Interest Period, it
shall be required to provide a Substitute Credit Facility or an amendment to the
Credit Facility in accordance with Section 2.07 of the Indenture.  The Company
covenants that, in the event that it shall select a Commercial Paper Period or
Long Term Period, it shall amend or cause the amendment of, and supplement or
cause the supplementation of, this Agreement and the Indenture, respectively,
such that the Bonds shall continue to be rated as investment grade by Moody’s,
Fitch or S&P.

SECTION 6.09.           Environmental Matters.  The Company shall:

(a)          comply with all applicable Environmental Laws and obtain and comply
with and maintain any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and

(b)         conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect.

-13-

--------------------------------------------------------------------------------

ARTICLE 7

ASSIGNMENT, SELLING, SUBLEASING,
INDEMNIFICATION; REDEMPTION

SECTION 7.01.          Assignment, Selling and Leasing.  This Agreement may be
assigned and the Project may be sold or subleased, as a whole or in part, with
the prior written consent of the Credit Provider and the Trustee (provided,
however, during the Credit Facility Period, the consent of the Trustee shall not
be required); provided, further, that no such assignment, sale or sublease
shall, in the opinion of Bond Counsel, result in interest on any of the Bonds
becoming includable in gross income for federal income tax purposes, or shall
otherwise violate any provisions of the Act; provided further, however, that no
such assignment, sale or sublease shall relieve the Company of any of its
obligations under this Agreement.

SECTION 7.02.          Release and Indemnification Covenants.  (a)  The Company
shall and hereby agrees to indemnify and save the Issuer and the Trustee
harmless against and from all claims by or on behalf of any person, firm,
corporation or other legal entity arising from the conduct or management of, or
from any work or thing done on, the Project, or any reason whatsoever in
connection with the Project and/or the Bonds, including without limitation, (i)
any condition of the Project, (ii) any breach or default on the part of the
Company in the performance of any of its obligations under this Agreement, (iii)
any act or negligence of the Company or of any of its agents, contractors,
servants, employees or licensees or (iv) any act or negligence of any assignee
or lessee of the Company, or of any agents, contractors, servants, employees or
licensees of any assignee or lessee of the Company.  The Company shall indemnify
and save the Issuer and the Trustee harmless from any such claim arising as
aforesaid, or in connection with any action or proceeding brought thereon, and
upon notice from the Issuer or the Trustee, the Company shall defend them or
either of them in any such action or proceeding.

(b)          Notwithstanding the fact that it is the intention of the parties
hereto that the Issuer shall not incur any pecuniary liability by reason of the
terms of this Agreement or the undertakings required of the Issuer hereunder, by
reason of the issuance of the Bonds, by reason of the execution of the Indenture
or by reason of the performance of any act requested of the Issuer by the
Company, including all claims, liabilities or losses arising in connection with
the violation of any statutes or regulation pertaining to the foregoing;
nevertheless, if the Issuer should incur any such pecuniary liability, then in
such event the Company shall indemnify and hold the Issuer harmless against all
claims, demands or causes of action whatsoever, by or on behalf of any person,
firm or corporation or other legal entity arising out of the same or out of any
offering statement or lack of offering statement in connection with the sale or
resale of the Bonds and all costs and expenses incurred in connection with any
such claim or in connection with any action or proceeding brought thereon, and
upon notice from the Issuer, the Company shall defend the Issuer in any such
action or proceeding.  All references to the Issuer in this Section 7.02 shall
be deemed to include its commissioners, directors, officers, employees, and
agents.

Notwithstanding anything to the contrary contained in this Section 7.02, the
Company shall have no liability to indemnify the Issuer against claims or
damages resulting from the Issuer’s own gross negligence or willful misconduct.

SECTION 7.03.          Issuer to Grant Security Interest to Trustee.  The
parties hereto agree that pursuant to the Indenture, the Issuer shall assign to
the Trustee, in order to secure payment of the Bonds, all of the Issuer’s right,
title and interest in and to this Agreement, except for Reserved Rights.

SECTION 7.04.          Indemnification of Trustee.  The Company shall and hereby
agrees to indemnify the Trustee for, and hold the Trustee harmless against, any
loss, liability or expense (including the costs and expenses of defending
against any claim of liability) incurred without negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
Trustee under the Indenture.

-14-

--------------------------------------------------------------------------------

ARTICLE 8

DEFAULTS AND REMEDIES

SECTION 8.01.          Defaults Defined.  The following shall be “Defaults”
under this Agreement and the term “Default” shall mean, whenever it is used in
this Agreement, any one or more of the following events:

(a)          Failure by the Company to pay any amount required to be paid under
Section 4.02(a) or (d) hereof.

(b)        Failure by the Company to observe and perform any covenant, condition
or agreement on its part to be observed or performed, other than as referred to
in Section 8.01(a) hereof, for a period of thirty (30) days after written notice
specifying such failure and requesting that it be remedied shall have been given
to the Company by the Issuer or the Trustee, unless the Issuer and the Trustee
shall agree in writing to an extension of such time prior to its expiration;
provided, however, if the failure stated in the notice cannot be corrected
within the applicable period, the Issuer and the Trustee will not unreasonably
withhold their consent to an extension of such time if corrective action is
instituted by the Company within the applicable period and diligently pursued
until such failure is corrected.

(c)          The dissolution or liquidation of the Company, except as authorized
by Section 2.02 hereof, or the voluntary initiation by the Company of any
proceeding under any federal or state law relating to bankruptcy, insolvency,
arrangement, reorganization, readjustment of debt or any other form of debtor
relief, or the initiation against the Company of any such proceeding which shall
remain undismissed for sixty (60) days, or failure by the Company to promptly
have discharged any execution, garnishment or attachment of such consequence as
would impair the ability of the Company to carry on its operations at the
Project, or assignment by the Company for the benefit of creditors, or the entry
by the Company into an agreement of composition with its creditors or the
failure generally by the Company to pay its debts as they become due.

(d)          The occurrence and continuance of a Default under the Indenture.

The provisions of subsection (b) of this Section are subject to the following
limitation:  if by reason of force majeure the Company is unable in whole or in
part to carry out any of its agreements contained herein (other than its
obligations contained in Article IV hereof), the Company shall not be deemed in
Default during the continuance of such inability. The term “force majeure”  as
used herein shall mean, without limitation, the following:  acts of God; strikes
or other industrial disturbances; acts of public enemies; orders or restraints
of any kind of the government of the United States of America or of the State or
of any of their departments, agencies or officials, or of any civil or military
authority; insurrections; riots; landslides; earthquakes; fires; storms;
droughts; floods; explosions; breakage or accident to machinery, transmission
pipes or canals; and any other cause or event not reasonably within the control
of the Company.  The Company agrees, however, to remedy with all reasonable
dispatch the cause or causes preventing the Company from carrying out its
agreement, provided that the settlement of strikes and other industrial
disturbances shall be entirely within the discretion of the Company and the
Company shall not be required to settle strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the Company.

-15-

--------------------------------------------------------------------------------

SECTION 8.02.          Remedies on Default.  Whenever any Default referred to in
Section 8.01 hereof shall have happened and be continuing, the Trustee, or the
Issuer with the written consent of the Trustee, may take one or any combination
of the following remedial steps:

(a)         If the Trustee has declared the Bonds immediately due and payable
pursuant to Section 9.02 of the Indenture, by written notice to the Company,
declare an amount equal to all amounts then due and payable on the Bonds,
whether by acceleration of maturity (as provided in the Indenture) or otherwise,
to be immediately due and payable as liquidated damages under this Agreement and
not as a penalty, whereupon the same shall become immediately due and payable;

(b)          Have reasonable access to and inspect, examine and make copies of
the books and records and any and all accounts, data and income tax and other
tax returns of the Company during regular business hours of the Company if
reasonably necessary in the opinion of the Trustee; or

(c)        Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement.

Any amounts collected pursuant to action taken under this Section shall be paid
into the Bond Fund and applied in accordance with the provisions of the
Indenture.

SECTION 8.03.          No Remedy Exclusive.  Subject to Section 9.02 of the
Indenture, no remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or in equity.  No delay or omission to exercise any right or power accruing
upon any Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient.  In order to entitle the Issuer or
the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than such notice as may be required in
this Article.  Such rights and remedies as are given the Issuer hereunder shall
also extend to the Trustee, and the Trustee and the Owners of the Bonds, subject
to the provisions of the Indenture, shall be entitled to the benefit of all
covenants and agreements herein contained.

SECTION 8.04.          Agreement to Pay Attorneys’ Fees and Expenses.  In the
event the Company should default under any of the provisions of this Agreement
and the Issuer should employ attorneys or incur other expenses for the
collection of payments required hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will, on demand therefor, pay to the
Issuer the reasonable fee of such attorneys and such other expenses so incurred
by the Issuer.

SECTION 8.05.          No Additional Waiver Improved by One Waiver.  In the
event any agreement contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.

-16-

--------------------------------------------------------------------------------

ARTICLE 9

MISCELLANEOUS

SECTION 9.01.          Term of Agreement; Option to Purchase Project.  This
Agreement shall remain in full force and effect from the date hereof to and
including October 1, 2040, or until such time as all of the Bonds and the fees
and expenses of the Issuer and the Trustee and all amounts payable to the Credit
Provider under or in respect of the Credit Facility shall have been fully paid
or provision made for such payments, whichever is later; provided, however, that
this Agreement may be terminated prior to such date pursuant to Article V of
this Agreement, but in no event before all of the obligations and duties of the
Company hereunder have been fully performed, including, without limitation, the
payments of all costs and fees mandated hereunder.

If the Company pays the rentals herein required, or if provision is made for
payment of the Bonds in accordance with the provisions of the Indenture, the
Company shall have the right and option, herein granted by the Issuer, to
purchase the Project from the Issuer at any time during the term of the
Agreement after or simultaneously with payment (or provision for payment in
accordance with the Indenture) in full of the principal of and the interest and
premium (if any) on the Bonds and all fees, charges and disbursements of the
Trustee, accrued and to accrue until the date of such full payment, at and for a
purchase price of $1000 plus the related costs and expenses (including
reasonable attorneys’ fees) incurred by the Issuer in connection with the
Company’s exercise of such option.  To exercise any such purchase option, the
Company shall notify the Issuer in writing not less than thirty (30) days prior
to the date on which it proposes to effect such purchase and, on the date of
such purchase, shall pay the aforesaid purchase price to the Issuer in cash,
whereupon the Issuer will, by bills of sale and deed or other appropriate
instruments, transfer and convey the Project (in its then condition, whatever
that may be) to the Company, subject only to such liens, encumbrances and
exceptions to which title thereto was subject when this Agreement was delivered,
those to the creation or suffering of which the Company consented (except for
this Agreement and the Indenture) and those resulting from the failure of the
Company to perform or observe any of the agreements or covenants on its part
herein contained.  Nothing herein contained shall be construed to give the
Company any right to any rebate to or refund of any rental paid by it hereunder
prior to the exercise by it of the purchase option hereinabove granted, even
though such rental may have been wholly or partially prepaid.

SECTION 9.02.         Notices.  All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or mailed by registered mail, postage prepaid, addressed as
follows:

 
Issuer:
Parish of St. James, State of Louisiana
   
P. O. Box 176
   
Vacherie, Louisiana 70090
   
Attention:  Parish President

 
Trustee:
U.S. Bank National Association
   
1349 West Peachtree, NW
   
Two Midtown Plaza, Suite 1050
   
Atlanta, Georgia 30309
   
Attention: Corporate Trust Department

 
Company:
NuStar Logistics, L.P.
   
2330 North Loop 1604 West
   
San Antonio, Texas 78248
   
Attention:  Chief Financial Officer

-17-

--------------------------------------------------------------------------------

 
Credit Provider:
JPMorgan Chase Bank, N.A.
   
Loan and Agency Services Group
   
1111 Fannin, 8th Floor
   
Houston, TX  77002
   
Attention: Maria Arreola

 
JPMorgan Chase Bank, N.A.
 
300 South Riverside Plaza
 
Mail Code IL1-0236
 
Standby Letter of Credit Unit
 
Chicago, IL  60606-0236
 
Attention: Standby Service Unit

 
Remarketing Agent:
SunTrust Robinson Humphrey, Inc.
   
3333 Peachtree Road, 11th Floor
   
Atlanta, Georgia 30326
   
Attention: Municipal Desk

 
Fitch:
Fitch, Inc.
   
One State Street Plaza
   
New York, New York 10004
   
Attention: Structured Finance

 
Moody’s:
Moody’s Investors Service, Inc.
   
99 Church Street
   
New York, New York 10007
   
Attention:  Corporate Department, Structured Finance Group

 
S&P:
Standard & Poor’s Ratings Services,
   
a Standard & Poor’s Financial Services LLC business
   
55 Water Street
   
New York, New York 10041
   
Attention:  Corporate Finance Department

A duplicate copy of each notice, certificate or other communication given
hereunder by the Issuer or the Company shall also be given to the Trustee and
the Credit Provider.  The Issuer, the Company, the Trustee, and the Credit
Provider may, by written notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.

SECTION 9.03.          Binding Effect.  This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company, the Credit
Provider, the Trustee, the Owners of Bonds and their respective successors and
assigns, subject, however, to the limitations contained in Section 2.02(b)
hereof.

SECTION 9.04.          Severability.  In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

-18-

--------------------------------------------------------------------------------

SECTION 9.05.          Amounts Remaining in Funds.  Subject to the provisions of
Section 6.11 of the Indenture, it is agreed by the parties hereto that any
amounts remaining in any account of the Bond Fund, the Project Fund, or any
other fund (other than the Rebate Fund) created under the Indenture upon
expiration or earlier termination of this Agreement, as provided in this
Agreement, after payment in full of the Bonds (or provision for payment thereof
having been made in accordance with the provisions  of the Indenture) and the
fees and expenses of the Trustee in accordance with the Indenture, shall belong
to and be paid to the Company by the Trustee.

SECTION 9.06.          Amendments, Changes and Modifications.  Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee and, prior to the Credit Facility Termination
Date and payment of all amounts payable to the Credit Provider under or in
connection with the Credit Facility, the consent of the Credit Provider, in
accordance with the provisions of the Indenture.

SECTION 9.07.          Execution in Counterparts.  This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

SECTION 9.08.          Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State.

SECTION 9.09.        Captions.  The captions and headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or Sections of this Agreement.

-19-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Parish of St. James, State of Louisiana, and NuStar
Logistics, L.P., have caused this Agreement to be executed in their respective
names and attested by their duly authorized officer or officers, and the Parish
has caused its corporate seal to be affixed hereto, all as of the date first
above written.

 
PARISH OF ST. JAMES,
 
STATE OF LOUISIANA
       
By:
/s/ Dale Hymel
     
Parish President
ATTEST:
   

By:
Angela R. Rodrigue
   
Secretary, Parish Council
[SEAL]

WITNESSES:

 
NUSTAR LOGISTICS, L.P.
 
By:  NUSTAR GP, INC., its general partner
    WITNESSES:  

     
By:
/s/ Steven A. Blank
     
Senior Vice President, Chief Financial Officer and Treasurer

--------------------------------------------------------------------------------