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                                                                    EXHIBIT 10.5

                               [EOTT ENERGY LOGO]

June 10, 2003

Mr. James R. Allred
510 Walnut Bend
Houston, Texas 77042

Dear Mr. Allred:

It is a pleasure to offer you employment with EOTT Energy LLC or its successor
company(ies) (EOTT) in the exempt position of Vice President & Treasurer
reporting to Keith Kaelber in the Houston office. Your employment will begin on
or about July 1, 2003 at a salary of $12,916.67 per month. As an employee of
EOTT, you will be eligible to participate in all the benefit plans and employee
programs.

You are eligible to participate in the 2003 EOTT Energy Annual Incentive Plan
("Plan"). All bonuses are discretionary and shall be paid in accordance with the
terms and provisions of the Plan. Your targeted bonus opportunity is thirty
(30%) percent of your annual base salary, provided Employee and Employer meet
performance objectives. You are a participant in the EOTT Energy Equity
Incentive Plan. An initial 2003 award has been approved at 40,000 LLC Units
which represents an estimated target award value over a 3 year growth period
equal to 3 times base salary. In the event of Change of Control as defined in
the Plan provisions, accelerated vesting occurs under involuntary termination.

If during your first year of employment, involuntary termination of your
employment occurs, excluding for cause termination, a separation payment equal
to one year's base salary will be provided within thirty (30) days of such
termination date. You are not eligible for severance benefits under the EOTT
Energy LLC Severance Pay Plan during your first year of employment.

As an exception to EOTT's standard two week vacation accrual for new employees,
you will accrue vacation at a four (4) week vacation accrual rate as of your
date of hire.

This offer of employment is contingent upon the successful completion of: 1) a
pre-employment drug screen, 2) a background check (successfully completed), and
3) the signing of the enclosed EOTT Energy Code of Ethics and EOTT Energy
Confidentiality and Intellectual Property Rights Agreement.

EOTT employees are subject to the EOTT Energy Controlled Substances and Drug
Paraphernalia in the Workplace Policy, the Alcohol Abuse Prevention and Testing
Policy, and the Alcohol Misuse in the Workplace Policies that forbid or
significantly limit any use of certain substances by DOT regulated and other
employees. These policies require DOT and certain other employees to undergo
pre-employment, random, post-accident, reasonable suspicion, return to duty as
well as certain other drug and alcohol testing. All employees are subject to
reasonable suspicion testing as indicated in the policies.

Allred, James R.

                                 EOTT ENERGY LLC
                     P.O.Box 4666, Houston, Texas 77210-4666

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You must agree to submit to and pass a pre-employment drug screening test
indicating that you are free from the use of unauthorized drugs. "Unauthorized
drugs" means one or more (or any combination thereof), of the following: (1)
marijuana, (2) cocaine, (3) opiates, (4) amphetamines and (5) phencyclidine
(PCP). Arrangements will be made for you to visit a clinic in your area to have
this drug test done. At that time you will be requested to provide a urine
specimen for testing.

Enclosed is a new hire information packet that contains employment forms you
should complete and have with you when you report for work to activate your
employment and benefit enrollment with EOTT. Please refer to the New Hire
Checklist included in the packet for the forms and their respective deadlines.

In accordance with the Immigration Reform and Control Act of 1986 (IRCA), EOTT
must have you complete and sign on your first day of employment with EOTT a new
identity and authorization to work in the United States form (I-9). You must
bring with you on your first day at work one of the following documents: U.S.
Passport OR Certificate of U.S. Citizenship, OR a valid State Drivers License
(with photograph) AND either an original Social Security Card or Birth
Certificate (State or County issued). These documents must be originals or
certified copies bearing original certification seal or stamp. These documents
will be inspected by your supervisor or a representative from Human Resources
and returned to you before the end of the day. PLEASE UNDERSTAND THAT IF YOU ARE
UNABLE TO PRESENT THE DOCUMENTS REQUIRED BY LAW TO COMPLETE THE FORM I-9 WITHIN
72 HOURS OF YOUR START DATE, THIS EMPLOYMENT OFFER WILL NO LONGER BE VALID.

BENEFITS:

You and your eligible dependents may participate in coverage under EOTT's
Employee Benefit Plans. Your new hire packet contains enrollment materials and
cost information on the benefits available to you. Please review this material
carefully to ensure your choices will meet your personal needs. You should
complete your enrollment forms as soon as possible after your employment begins
to ensure continuous medical and dental coverage. IF WE DO NOT RECEIVE YOUR
FORMS WITHIN 31 DAYS OF YOUR DATE OF HIRE, YOU WILL:

     -    be assigned the $1250 Deductible (Employee Only) Option for medical
          coverage effective the date we receive your enrollment form, and

     -    not be able to choose your desired medical coverage and not be
          eligible for dental or vision coverage or have dependent coverage
          until the Company's next Open Enrollment period for the following
          year's coverage, and

     -    be required to fill out an Evidence of Insurability form for
          supplemental life insurance for you and your dependents.

Medical and Dental Coverage

You may elect medical coverage for you and your eligible dependents from the
plan options that are available in your area as indicated on the enclosed
Employee Contribution Price Sheet for Medical/Dental/Vision. A United Healthcare
list of network physicians are available on the Internet at
www.unitedhealthcare.com. You may also elect dental coverage. You may elect the
medical coverage without dental coverage, dental coverage alone, or you may
elect both coverages.

Vision Care Coverage

You may also elect coverage for you and your eligible dependents in our
voluntary Vision Care Plan that provides managed care examinations and eyewear
from Vision Service Plan. Employees pay the full cost of coverage. To find out
more about the vision coverage and to locate a network doctor, visit the Vision
Service Plan Internet web page at www.vsp.com.

Allred, James R.

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You must be actively at work on the date your coverage is to begin. "Actively at
work" means that you are physically at work or on approved vacation or scheduled
day off on the date your coverage is to begin. If you have a dependent that is
confined in a hospital on the date coverage is to begin, the dependent's EOTT
coverage will not be effective until the dependent is released from the
hospital.

Life and Accidental Death and Dismemberment Insurance

On the date you become an active employee of EOTT, you are automatically
enrolled for Basic Term Life insurance at 1.5 times your annual base salary or
benefit rate and also Basic Accidental Death and Dismemberment (AD&D) coverage
at 1.5 times your annual base salary or benefit rate. The cost for your Basic
Term Life and AD&D coverage is currently paid entirely by the Company. The
dollar amount of your coverage is adjusted each January 1, based on your salary
as of that date, and remains effective for that calendar year.

Supplemental Life and AD&D coverage is available to you at 1.5 or 2.5 times your
annual base salary or benefit rate. You must complete an enrollment form to
establish this coverage. The cost for this coverage is paid entirely by you.
Contributions are based on a rate schedule, which is included in your packet.
Any request to increase the amount of your Supplemental Life coverage after the
first 31 days of employment requires evidence of insurability at your expense.
AD&D coverage does not require evidence of insurability at any time. The dollar
amount of your coverages are adjusted each January 1, based on your salary as of
that date, and remains effective for that calendar year.

You must be enrolled in Supplemental Life to elect Spouse and/or Child(ren) life
coverage for your dependents. The coverage amount cannot exceed 50% of your
Supplemental Life coverage amount. The cost for Spouse and/or Child(ren) life
coverage is paid entirely by you. The contributions for these coverages are in
this packet. Family AD&D coverage is also available.

Medical Leave

Upon your hire date by EOTT your medical (sick pay) leave benefit will be
established according to the schedule found in the enclosed Benefits Alert
summary. The schedule is based on length of continuous service. The maximum
amount of sick pay leave is 26 weeks or 1,040 hours.

Basic Long Term Disability

You will be automatically enrolled for long-term disability benefits when you
have completed six months of service from your date of hire. A pre-existing
condition rule will apply for any illness or injury for which you received
medical treatment, consultation, care, diagnostic tests or prescribed medication
in the three (3) months immediately before your effective date of coverage. The
Company currently pays the cost for long-term disability coverage.

Supplemental Long Term Disability

After six months of continuous service, you will be eligible to elect coverage
for a voluntary Supplemental Long Term Disability benefit that will increase
your Company paid Basic Long Term disability benefit from 50% of your base
salary or benefit rate to 60% of your base salary or benefit rate. The cost for
Supplemental Long Term Disability coverage is paid entirely by you. At the time
you have met the eligibility requirements, information will be submitted to you
for election.

Allred, James R.

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Long Term Care

You are also eligible to elect coverage for a Long Term Care benefit. This plan
is available to employees, spouses, parents, and parents-in-law, grandparents
and grandparents-in-law. A CNA packet is enclosed with additional information
and enrollment forms.

EOTT Energy Savings Plan

You may enroll in the EOTT Energy Savings Plan immediately upon hire. You may
contribute up to 30% in whole percentages through payroll deduction before taxes
are withheld and an additional 15% after taxes are withheld, or any combination
of before and after tax withholdings. The plan offers thirteen investment
options for you to choose from. Enclosed in your new hire packet is detailed
fund information.

EOTT may contribute on your behalf to the Savings Plan a discretionary company
match and an additional employer contribution based on the profitability of the
Company. Profit Sharing contributions and company matching contributions are
subject to a 25% per year vesting schedule.

Vacation

Vacation is earned and accrued at the end of each month and is paid at the
employee's base rate of pay or commission rate at the time the vacation is used.
VACATION MAY BE TAKEN AT ANY TIME IN THE CALENDAR YEAR WITH APPROVAL FROM THE
SUPERVISOR PRIOR TO BEING SCHEDULED. VACATION REQUESTS MAY BE DENIED DUE TO
CONFLICT WITH BUSINESS REQUIREMENTS AND AVAILABLE RESOURCES. Please refer to the
vacation schedule provided in the enclosed Benefits Alert summary for more
information.

Holidays

There are 10 paid holidays per calendar year. These may consist of up to 3
discretionary days depending upon day of the week the holidays occur in a
calendar year.

This letter does not constitute a contract of employment, nor does it imply an
obligation to you or EOTT outside the doctrine of Employment-At-Will. Under the
doctrine of Employment-At-Will, your employment may be terminated by you or EOTT
at any time, for any reason. Your acceptance of this offer shall constitute your
acknowledgement that you understand that no officer, manager, or representative
of EOTT has the authority to enter into any oral or written agreement or to make
any agreement contrary to the foregoing unless approved by the Board of
Directors of the Company. The terms and conditions stated above constitute the
entire offer of employment. Any promises, conditions, perquisites or statements
made prior to this offer and not expressly stated within this offer of
employment, shall not be considered binding upon the company. Your employment
will be subject to policies adopted by EOTT from time to time, which the Company
may adopt, amend or terminate at any time in its sole discretion, without prior
notice to you.

As always, EOTT considers salary information to be privileged information. The
company requests that you demonstrate sensitivity to this issue by keeping the
details of this offer confidential. You are encouraged to confer only with your
hiring supervisor or Human Resources regarding any questions you may have.

Allred, James R.

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I am confident that you will be an asset to our organization and we look forward
to having you with us. Please sign the attached acceptance statement and return
to Human Resources as soon possible or no later than June 17, 2003. If EOTT does
not receive your response by June 17, 2003 this offer is null and void.

If you have any questions concerning this offer of employment please feel free
to contact me at 713-993- 5001.

Sincerely,

Mary Ellen Coombe
Vice President, Human Resources & Administration

Allred, James R.

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                         EMPLOYMENT ACCEPTANCE STATEMENT

I, James R. Allred, accept your offer of employment in the exempt position of
Vice President & Treasurer at a monthly salary of $12,916.67. I understand that
this offer of employment is contingent upon my successful passing of a
pre-employment drug screen, a background check (successfully completed) and my
signing of the EOTT Energy Code of Ethics and EOTT Energy Confidentiality and
Intellectual Property Rights Agreement.

I understand that I am eligible to participate in the 2003 EOTT Energy Annual
Incentive Plan ("Plan"). All bonuses are discretionary and shall be paid in
accordance with the terms and provisions of the Plan. I am eligible for an
initial targeted bonus opportunity of thirty (30%) percent of my annual base
salary, provided Employee and Employer meet performance objectives. I understand
that I am a participant in the EOTT Energy Equity Incentive Plan. An initial
2003 award has been approved at 40,000 LLC Units which represents an estimated
target award value over a 3 year growth period equal to 3 times base salary,
however, not guaranteed. In the event of Change of Control as defined in the
Plan provisions, accelerated vesting occurs under involuntary termination.

I understand that if during my first year of employment, involuntary termination
of my employment occurs, excluding for cause termination, a separation payment
equal to one year's base salary will be provided within thirty (30) days of such
termination date. I am not eligible for severance benefits under the EOTT Energy
LLC Severance Pay Plan during my first year of employment.

I understand that this offer does not constitute a contract for employment, nor
does it imply any obligation to me or the Company outside the doctrine of
Employment-At-Will. Under the doctrine of Employment-At-Will, my employment may
be terminated by EOTT or myself at any time, for any reason. I also acknowledge
that I have read the attached offer letter and certify that I have not signed an
agreement of confidentiality, covenant not to compete, nor any other type of
agreement with restrictive covenants of any kind of nature with any of my
employers, past, or present, that would restrict, prevent or otherwise preclude
my employment with the Company and certification and compliance as an employee
of the Company. My acceptance of this offer shall constitute acknowledgement
that I understand that no officer, manager, or representative of the Company has
the authority to enter into any oral or written agreement, or to make any
agreement contrary to the foregoing unless approved by the Board of Directors of
the Company. The terms and conditions stated in the attached offer letter
constitute the entire offer of employment. Any promises, conditions, perquisites
or statements made prior to this offer and not expressly stated within this
offer of employment, should not be considered binding upon the Company.

/s/ James R. Allred
---------------------------------
James R. Allred

6/17/03
-------
Date

Please return this form by due date to:

                                Mary Ellen Coombe
                Vice President, Human Resources & Administration
                                  P.O. Box 4666
                            Houston, Texas 77210-4666
                              Fax No: 713-402-2772

Allred, James R.