Exhibit 10.1

TESORO LOGISTICS LP
2011 LONG-TERM INCENTIVE PLAN
PERFORMANCE PHANTOM UNIT AGREEMENT

Pursuant to this Performance Phantom Unit Agreement, dated as of [_______], 20__
(the “Agreement”), Tesoro Logistics GP, LLC (the “Company”), as the general
partner of Tesoro Logistics LP (the “Partnership”), hereby grants to
[___________] (the “Participant”) the following award of Phantom Units (“Phantom
Units”), pursuant and subject to the terms and conditions of this Agreement and
the Tesoro Logistics LP 2011 Long-Term Incentive Plan (the “Plan”), the terms
and conditions of which are hereby incorporated into this Agreement by
reference. Each Phantom Unit shall constitute a Phantom Unit under the terms of
the Plan and is hereby granted in tandem with a corresponding DER, as further
detailed in Section 3 below. Except as otherwise expressly provided herein, all
capitalized terms used in this Agreement, but not defined, shall have the
meanings provided in the Plan.

GRANT NOTICE

Subject to the terms and conditions of this Agreement, the principal features of
this Award are as follows:
Target Number of Phantom Units: [________]
Grant Date: [________], 20[__]
Performance Period: [__________], 20[__] to [__________], 20[__]
DERs: Each Phantom Unit granted under this Agreement shall be issued in tandem
with a corresponding DER, which shall entitle the Participant to receive
payments in an amount equal to Partnership distributions in accordance with
Section 3 of this Agreement.

1

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

TERMS AND CONDITIONS OF PHANTOM UNITS

1.Grant. The Company hereby grants to the Participant, as of the Grant Date, an
award of Phantom Units as set forth in the Grant Notice above, subject to all of
the terms and conditions contained in this Agreement and the Plan.

2.Phantom Units. Subject to Section 4 below, each Phantom Unit that vests shall
represent the right to receive payment, in accordance with Section 5 below, in
the form of one Unit. Unless and until a Phantom Unit vests, the Participant
will have no right to payment in respect of any such Phantom Unit. Prior to
actual payment in respect of any vested Phantom Unit, such Phantom Unit will
represent an unsecured obligation of the Partnership, payable (if at all) only
from the general assets of the Partnership.

3.Grant of Tandem DER. Each Phantom Unit granted hereunder is hereby granted in
tandem with a corresponding DER, which DER shall remain outstanding from the
Grant Date until the earlier of the payment or forfeiture of the Phantom Unit to
which it corresponds. Each vested DER shall entitle the Participant to receive
payments, subject to and in accordance with this Agreement, in an amount equal
to any distributions made by the Partnership in respect of the Units underlying
the Phantom Units to which such DER relates. Upon the vesting of a Phantom Unit,
the DER with respect to such vested Phantom Unit shall also become vested.
Similarly, upon the forfeiture of a Phantom Unit, the DER with respect to such
forfeited Phantom Unit shall also be forfeited. DERs shall not entitle the
Participant to any payments relating to distributions occurring after the
earlier to occur of the applicable Phantom Unit payment date or the forfeiture
of the Phantom Unit underlying such DER. The DERs and any amounts that may
become distributable in respect thereof shall be treated separately from the
Phantom Units and the rights arising in connection therewith for purposes of
Section 409A of the Code (including for purposes of the designation of time and
form of payments required by Section 409A).

4.Vesting and Termination.

(a)    Vesting. Subject to Sections 4(b) and (c) below, all or a portion of the
Phantom Units shall vest as of the last day of the Performance Period (as
indicated in the Grant Notice above) as set forth in the following table (for
purposes of the table below performance of the Partnership shall be measured
using the average of three discrete one-year relative TURs compared to the
average of three discrete one-year relative TURs for the Peer Group over the
Performance Period:

2

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

Partnership’s Average Performance Relative to the Performance Peer Group’s
Average of Relative TUR
Payout % of Target Number of Phantom Units
<30th percentile
0%
30th percentile
50%
50th percentile
100%
75th percentile
150%
90th percentile +
200%

Vesting between 30th percentile and 50th percentile performance, between 50th
percentile performance and 75th percentile performance and between 75th
percentile performance and 90th percentile performance will be determined by
straight-line interpolation.
(b)    Partial Accelerated Vesting in Certain Circumstances. Subject to Section
4(c)(i) below, a portion of the Phantom Units equal to 100% of the Target Number
of Phantom Units (as indicated in the Grant Notice above) shall vest in full
upon the occurrence of any of the following events: (i) a termination of the
Participant’s Service prior to the last day of the Performance Period by reason
of the Participant’s death or Disability or (ii) a Change in Control, provided
that the Participant has not incurred a termination of Service prior to such
Change in Control.
(c)    Forfeiture; Certain Terminations.
(i)     Notwithstanding the foregoing, but subject to Section 4(c)(ii) below, in
the event of a termination of the Participant’s Service or the occurrence of a
Change in Control, as applicable, all Phantom Units that have not vested prior
to or in connection with such termination of Service or Change in Control shall
thereupon automatically be forfeited by the Participant without further action
and without payment of consideration therefor. Subject to Section 4(c)(ii)
below, no portion of the Phantom Units which has not become vested at the date
of the Participant’s termination of Service or the Change in Control, as
applicable, shall thereafter become vested. For the avoidance of doubt, no
Phantom Units shall become vested pursuant to Section 4(b) above in the event of
a Change in Control following a termination of the Participant’s Service.
(ii)    Notwithstanding Section 4(c)(i) above, in the event of a termination of
the Participant’s Service (A) as a result of the Participant’s Retirement at any
time before the last day of the Performance Period or (B) at or after the one
year anniversary of the commencement of the Performance Period but before the
last day of the Performance Period by the Company, the Partnership or one of
their Affiliates without Cause, a portion of the Phantom Units shall not be
forfeited in connection with

3

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

such termination of Service, but shall instead remain outstanding and shall be
eligible to vest on the last day of the Performance Period in accordance with
this Section 4(c)(ii). In the event of such a termination of Service, the number
of Phantom Units that shall vest on the last day of the Performance Period, if
any, shall be equal to the number of Phantom Units that would have vested under
Section 4(a) had the Participant remained in Service with the Company, the
Partnership or one of their Affiliates through the last day of the Performance
Period, multiplied by a fraction, the numerator of which is the number of whole
months of service by the Participant during the Performance Period and the
denominator of which is the total number of whole months in the Performance
Period

(iii)     Effective as of the last day of the Performance Period, any portion of
the Phantom Units that does not become vested in accordance with Section 4(a) or
4(c)(ii) above shall automatically be forfeited by the Participant without
further action and without payment of consideration therefor.
(iv)    In addition to the forfeiture provisions described above, this Award and
all other equity-based compensation awards granted to you by the company or any
affiliate or Tesoro Corporation, in each case, to the extent outstanding and
unvested at the time of any such breach, shall be subject to immediate
forfeiture and recoupment (in full) by the company upon the Participant’s
breach, in any respect, of any of the covenants set forth in Section 9 hereof.
(d)    Definitions.
    
(i)    Retirement. For purposes of this Agreement, “Retirement” shall mean a
Participant’s retirement from active Service (A) at or after age fifty-five (55)
with five (5) years of service recognized by the Company, the Partnership or the
applicable Affiliate, or (B) at or after age fifty (50) with eighty (80) points
(with “points” meaning the sum of the Participant’s age and years of service
recognized by the Company the Partnership or the applicable Affiliate at the
time of retirement). The determination of the Committee as to an individual’s
Retirement shall be conclusive on all parties.

(ii)    TUR. For purposes of this Agreement, “TUR” means, as applicable, the
Partnership’s or a member of the Peer Group’s total unitholder return for the
each of the discrete one calendar year periods within the Performance Period
calculated based on the change in the trading price of the applicable units over
the Performance Period and assuming the reinvestment of all distributions paid
on units during such period, all as determined by the Committee in its
discretion; provided, however, that (A) except as set forth in clause (B) below,
for purposes of calculating the Partnership’s TUR for any Performance Period,
the initial unit price and the final unit price, as applicable, as of any given
date shall be equal to the Fair Market Value (as defined in the Plan) as of such
date, and (B) for purposes of calculating the Partnership’s TUR for any
Performance Period that commences with the date of the closing of the initial
public offering of Units, the initial unit price shall be equal to the initial
public offering price of a Unit.

4

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

(iv)    Peer Group. For purposes of this Agreement, the “Peer Group” shall
consist of the companies listed on the Term Sheet included herewith.

5.Payment of Phantom Units and DERs.

(a)    Phantom Units. Unpaid, vested Phantom Units shall be paid to the
Participant in the form of Units in a lump-sum as soon as reasonably practical,
but not later than 45 days, following the date on which such Phantom Units vest.
Payments of any Phantom Units that vest in accordance herewith shall be made to
the Participant (or in the event of the Participant’s death, to the
Participant’s estate) in whole Units in accordance with this Section 5.

(b)    DERs. Unpaid, vested DERs shall be paid to the Participant as follows: as
soon as reasonably practical, but not later than 45 days, following the date on
which a Phantom Unit and related DER vests, the Participant shall be paid an
amount in cash equal to the amount then credited to the DERs with respect to
such Phantom Unit.

(c)    Potential Six-Month Delay. Notwithstanding anything to the contrary in
this Agreement, no amounts payable under this Agreement shall be paid to the
Participant prior to the expiration of the 6-month period following his
“separation from service” (within the meaning of Treasury Regulation Section
1.409A-1(h)) (a “Separation from Service”) to the extent that the Company
determines that paying such amounts prior to the expiration of such 6-month
period would result in a prohibited distribution under Section 409A(a)(2)(B)(i)
of the Code. If the payment of any such amounts is delayed as a result of the
previous sentence, then on the first business day following the end of the
applicable 6-month period (or such earlier date upon which such amounts can be
paid under Section 409A of the Code without resulting in a prohibited
distribution, including as a result of the Participant’s death), such amounts
shall be paid to the Participant.

6.Tax Withholding. Unless otherwise determined by the Committee, the Company
and/or its Affiliates shall withhold Units otherwise issuable in respect of such
Phantom Units having a fair market value equal to the sums required to be
withheld. In the event that Units that would otherwise be issued in payment of
the Phantom Units are used to satisfy such withholding obligations, the number
of Units which shall be so withheld shall be limited to the number of Units
which have a fair market value (which, in the case of a broker-assisted
transaction, shall be determined by the Committee, consistent with applicable
provisions of the Code) on the date of withholding equal to the aggregate amount
of such liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax purposes that are
applicable to such supplemental taxable income.

7.Rights as Unit Holder. Neither the Participant nor any person claiming under
or through the Participant shall have any of the rights or privileges of a
holder of Units in respect of any Units that may become deliverable hereunder
unless and until certificates representing such Units shall have been issued or
recorded in book entry form on the records of the Partnership or its transfer
agents or registrars, and delivered in certificate or book entry form to the
Participant or any person claiming under or through the Participant.

5

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

8.Partnership Agreement. Units issued upon payment of the Phantom Units shall be
subject to the terms of the Plan and the terms of the Partnership Agreement.
Upon the issuance of Units to the Participant, the Participant shall,
automatically and without further action on his or her part, (i) be admitted to
the Partnership as a Limited Partner (as defined in the Partnership Agreement)
with respect to the Units, and (ii) become bound, and be deemed to have agreed
to be bound, by the terms of the Partnership Agreement.

9.Covenants. The Participant’s services to the Company are unique, extraordinary
and essential to the business of the Company and its affiliates, particularly in
view of the Participant’s access to the Company’s or its affiliates’
confidential information and trade secrets. Accordingly, in consideration of
this award of Phantom Units and by accepting this award of Phantom Units, the
Participant agrees as follows:

(a)    The Participant agrees that the Participant will not, without the prior
written approval of the Board, at any time during the term of the Participant’s
employment with the Company or its affiliates and for a period of one year
following the date on which the Participant’s employment with the Company and
its affiliates terminates (the “Restricted Period”), directly or indirectly,
serve as an officer, director, owner, contractor, consultant, or employee of any
the following organizations (or any of their respective subsidiaries or
divisions) or Tesoro Corporation: Magellan Midstream Partners, L.P.; Enbridge
Energy Partners, L.P.; MarkWest Energy Partners, L.P.; Western Gas Partners,
L.P.; Buckeye Partners, L.P.; Sunoco Logistics Partners, L.P.; EnLink Midstream
Partners, L.P.; Targa Resources Partners, L.P.; DCP Midstream Partners, L.P.;
EQT Midstream Partners L.P.; NuStar Energy L.P.; ONEOK Partners.; Boardwalk
Pipeline Partners, L.P.; Genesis Energy, L.P.; Holly Energy Partners, L.P. ;
HollyFrontier Corporation; Marathon Petroleum Corporation; PBF Energy Inc.;
Phillips 66 and Valero Energy Corporation, or otherwise engage in any business
activity directly or indirectly competitive with the business of the Company or
its affiliates (or their respective subsidiaries or divisions) as in effect from
time to time.

(b)     The Participant agrees that during the Restricted Period, the
Participant will not, alone or in conjunction with another party, hire, solicit
for hire, aid in or facilitate the hire, or cause to be hired, either as an
employee, contractor or consultant, any individual who is currently engaged, or
was engaged at any time during the six (6) month period prior such event, as an
employee, contractor or consultant of the Company or any of its affiliates (or
their respective subsidiaries or divisions).

(c)    The Participant agrees and understands that the Company and its
affiliates own and/or control information and material which is not generally
available to third parties and which the Company or its affiliates consider
confidential, including, without limitation, methods, products, processes,
customer lists, trade secrets and other information applicable to its business
and that it may from time to time acquire, improve or produce additional
methods, products, processes, customers lists, trade secrets and other
information (collectively, the

6

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

“Confidential Information”). The Participant acknowledges that each element of
the Confidential Information constitutes a unique and valuable asset of the
Company and its affiliates, and that certain items of the Confidential
Information have been acquired from third parties upon the express condition
that such items would not be disclosed to the Company and its officers and
agents other than in the ordinary course of business. The Participant
acknowledges that disclosure of the Confidential Information to and/or use by
anyone other than in the Company’s or its affiliates’ ordinary course of
business would result in irreparable and continuing damage to the Company and
its affiliates. Accordingly, the Participant agrees to hold the Confidential
Information in the strictest secrecy, and covenant that, during the term of the
Participant’s employment with the Company and its affiliates or at any time
thereafter, the Participant will not, without the prior written consent of the
Board, directly or indirectly, allow any element of the Confidential Information
to be disclosed, published or used, nor permit the Confidential Information to
be discussed, published or used, either by himself or by any third parties,
except in effecting the Participant’s duties for the Company and its affiliates
in the ordinary course of business.
 
10.No Effect on Service. Nothing in this Agreement or in the Plan shall be
construed as giving the Participant the right to be retained in the employ or
service of the Company or any Affiliate. Furthermore, the Company and its
Affiliates may at any time dismiss the Participant from employment or consulting
free from any liability or any claim under the Plan or this Agreement, unless
otherwise expressly provided in the Plan, this Agreement or other written
agreement.

11.Severablility. If any provision of this Agreement is or becomes or is deemed
to be invalid, illegal, or unenforceable in any jurisdiction, such provision
shall be construed or deemed amended to conform to the applicable law or, if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of this Agreement, such provision
shall be stricken as to such jurisdiction, and the remainder of this Agreement
shall remain in full force and effect.

12.Amendments, Suspension and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board or the
Committee. Except as provided in the preceding sentence, this Agreement cannot
be modified, altered or amended, except by an agreement, in writing, signed by
both the Partnership and the Participant.

13.Code Section 409A. None of the Phantom Units, the DERs or any amounts paid
pursuant to this Agreement are intended to constitute or provide for a deferral
of compensation that is subject to Section 409A of the Code. Nevertheless, to
the extent that the Committee determines that the Phantom Units or DERs may not
be exempt from (or compliant with) Section 409A of the Code, the Committee may
(but shall not be required to) amend this Agreement in a manner intended to
comply with the requirements of Section 409A of the Code or an exemption
therefrom (including amendments with retroactive effect), or take any other
actions as it deems necessary or appropriate to (a) exempt the Phantom Units or
DERs from Section 409A of the Code and/or preserve the intended tax treatment of
the benefits provided

7

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

with respect to the Phantom Units or DERs, or (b) comply with the requirements
of Section 409A of the Code. To the extent applicable, this Agreement shall be
interpreted in accordance with the provisions of Section 409A of the Code.
Notwithstanding anything in this Agreement to the contrary, to the extent that
any payment or benefit hereunder constitutes non-exempt “nonqualified deferred
compensation” for purposes of Section 409A of the Code, and such payment or
benefit would otherwise be payable or distributable hereunder by reason of the
Participant’s termination of Service, all references to the Participant’s
termination of Service shall be construed to mean a Separation from Service, and
the Participant shall not be considered to have a termination of Service unless
such termination constitutes a Separation from Service with respect to the
Participant.

14.Adjustments; Clawback. The Participant acknowledges that the Phantom Units
are subject to modification and termination in certain events as provided in
this Agreement and Section 7 of the Plan. The Participant further acknowledges
that the Phantom Units, DERs and Units issuable hereunder are subject to
clawback as provided in Section 8(o) of the Plan.

15.Successors and Assigns. The Company or the Partnership may assign any of its
rights under this Agreement to single or multiple assignees, and this Agreement
shall inure to the benefit of the successors and assigns of the Company and the
Partnership. Subject to the restrictions on transfer contained herein, this
Agreement shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.

16.Headings. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision hereof.

17.Acceptance. You are required to accept this Award on-line with Fidelity at
netbenefits.fidelity.com. Once you accept your Award, you will be able to view
the terms and conditions of the Award. This Award must be accepted prior to the
vesting date; otherwise, the Award will forfeit. If you don’t accept your Award
prior to your termination of employment and your termination is due to death or
disability, your Award will be considered accepted and will follow the terms for
these specified terminations as noted above.

This material has been prepared and distributed by Tesoro Corporation and Tesoro
Corporation is solely responsible for its accuracy. Tesoro Corporation is not
affiliated with Fidelity Investments (or any Fidelity entity).
Stock plan recordkeeping and administrative services are offered through
Fidelity Stock Plan Services, LLC.
Brokerage products and services are offered through Fidelity Brokerage Services
LLC, Member NYSE, SIPC.

8