ASSIGNMENT OF LEASE
                               -------------------

                                                 BROWNSVILLE NAVIGATION DISTRICT
THE STATE OF TEXAS  )                            CONTRACT NO. 2823 "M"
                                                              ----------
COUNTY OF CAMERON   )

     THIS AGREEMENT is made between PENN OCTANE CORPORATION, a Texas corporation
with  offices  at  the Port of Brownsville, Cameron County, Texas, herein called
"Assignor,"  and  RIO  VISTA  OPERATING  PARTNERSHIP,  L.P.,  a Delaware limited
partnership,  of  820  Gessner,  Suite  1285,  Houston,  TX 77024, herein called
"Assignee."

     WHEREAS,  the BROWNSVILLE NAVIGATION DISTRICT OF CAMERON COUNTY, TEXAS, the
"DISTRICT,"  as  Lessor,  and  PENN  OCTANE CORPORATION, as Lessee, entered into
Lease  Contract  No.  2823 dated October 5, 1993, covering that certain Tract of
Land  described  in  EXHIBIT  A  attached  hereto and made a part hereof for all
purposes;  and

     WHEREAS, Assignor now desires to assign said Lease to the Assignee, and the
Assignee  desires to accept the assignment thereof under the following terms and
conditions:

     NOW,  THEREFORE,  in  consideration  of  the  sum of TEN AND NO/100 DOLLARS
($10.00)  and  other good and valuable consideration, receipt of which is hereby
acknowledged,  Assignor  hereby  assigns  to  the  Assignee,  its  successors in
interest  and  assigns,  all  of  its right, title, and interest in and to Lease
Contract  No.  2823 covering the leased premises described in EXHIBIT A attached
hereto,  together  with  all  improvements,  equipment,  furniture  and fixtures
situated  on the subject Leasehold. Assignee accepts the assignment of the Lease
Contract  and hereby assumes and agrees to perform and fulfill all of the terms,
covenants,  conditions,  and  obligations  which  arise  after  the  date hereof
required of the Assignor under the afore described Lease, specifically including
the  timely  making  of  all  payments  due  to DISTRICT. Additionally, Assignee
expressly  assumes  responsibility  for  the  payment  of any sales tax, if any,
attributable to this transaction. In no event shall Assignee ever be responsible
for  the  performance  of  any  terms,


                                                                          Page 1
<PAGE>
covenants, conditions and/or obligations which arose under the Lease Contract on
or  before  the  date  hereof.

     Assignor  hereby  represents,  warrants  and  covenants  to  Assignee  that
Assignor has fully and timely performed each and every term, covenant, condition
and obligation of Assignor under the Lease Contract which have accrued or arisen
on  or  before  the date hereof and Assignor does hereby indemnify, defend, save
and  hold harmless Assignee from and against any and all damages, costs, claims,
causes  of  action  or fees suffered or incurred by Assignee (including, without
limitation,  reasonable  attorney's  fees and court costs) which arise out of or
relate  to  a  failure  by  Assignor  to  perform  any  of the terms, covenants,
conditions  or  obligations  under  the  Leases which were to be performed on or
before  the  date  hereof.

     This  Agreement shall be binding on and inure to the benefit of the parties
to  this  Agreement,  their  successors  in  interest  and  assigns.

     EXECUTED this 15th day of September, 2004.
                   ----

                                           ASSIGNOR:

                                           PENN OCTANE CORPORATION

                                           By:  /s/ Charles Handly
                                                ------------------
                                                CHARLIE HANDLY
                                           ITS:  EXECUTIVE VICE PRESIDENT

                                           ASSIGNEE:

                                           RIO VISTA OPERATING PARTNERSHIP, L.P.
                                           BY ITS GENERAL PARTNER
                                           RIO VISTA OPERATING GP, LLC

                                           BY:  /s/ Charles Handly
                                                ------------------
                                                CHARLES HANDLY
                                           ITS: SECRETARY


                                                                          Page 2
<PAGE>
                                 ACKNOWLEDGMENTS
                                 ---------------

THE STATE OF TEXAS  )

COUNTY OF CAMERON   )

     This  instrument  was  acknowledged before me on the 16th day of September,
                                                          ----
2004  by  Charlie Handly, Executive Vice President of PENN OCTANE CORPORATION, a
Texas  corporation,  on  behalf  of  said  corporation.

                                           /s/ Beatrice G. Rosenbaum
                                           -----------------------------------
                                           Notary Public, State of Texas

My Commission Expires:
[GRAPHIC OMITTED]



THE STATE OF TEXAS  )

COUNTY OF CAMERON   )

     This  instrument  was  acknowledged before me on the 16th day of September,
                                                          ----
2004  by  Charles  Handly,  Secretary  of  RIO VISTA OPERATING PARTNERSHIP, LLC,
General  Partner  of RIO VISTA OPERATING GP, LP, a Delaware limited partnership,
on  behalf  of  said  partnership.

                                           /s/ Beatrice G. Rosenbaum
                                           -----------------------------------
                                           Notary Public, State of Texas

My Commission Expires:
[GRAPHIC OMITTED]


                                                                          Page 3
<PAGE>
                                CONSENT OF LESSOR
                                -----------------

     The  undersigned,  the  BROWNSVILLE  NAVIGATION DISTRICT OF CAMERON COUNTY,
TEXAS, is the Lessor in the Lease described in the foregoing Assignment, and the
said DISTRICT hereby consents to the assignment of Lease Contract No.2823 to RIO
VISTA  OPERATING  PARTNERSHIP,  L.P.  Consent  to  this Assignment releases PENN
OCTANE  CORPORATION,  the  Lessee/Assignor, from its obligations under the terms
and  conditions  of the subject Lease Contracts, except for any obligations that
may  have  arisen  on  or  prior  to  the  date  of  the  assignment.

     EXECUTED effective September 15, 2004.

                                   BROWNSVILLE NAVIGATION DISTRICT
                                   OF CAMERON COUNTY, TEXAS

                                   By: /s/ Peter Zavaletta
                                       -------------------
                                       Peter Zavaletta, Chairman of the Board of
                                       Navigation and Canal Commissioners of the
                                       Brownsvil1e Navigation District of
                                       Cameron County, Texas

ATTEST:
/s/ Unreadable
--------------
Its Secretary


THE STATE OF TEXAS  )

COUNTY OF CAMERON   )

     This instrument was subscribed before me on the 15th day of September, 2004
                                                     ----
by  Peter Zavaletta, Chairman of the Board of Navigation and Canal Commissioners
of  the  Brownsvil1e  Navigation  District of Cameron County, Texas, a municipal
corporation,  who  acknowledged to me that he executed the same for the purposes
and consideration therein expressed, in his official capacity as therein stated,
under  the  seal  thereof  and  as  the  act  and  deed  of  said  corporation.

                                           /s/ Beatrice G. Rosenbaum
                                           -----------------------------------
                                           Notary Public, State of Texas

My Commission Expires:
[GRAPHIC OMITTED]


                                                                          Page 4
<PAGE>
                                   EXHIBIT "A"

                                 PENN OCTANE CO.


                              14.51 ACRE TRACT "A"


BEING a 14.51 Acre Tract of Land out of the 462.26 Acre Union Carbide Tract, out
of  Share  32,  Espiritu Santo Grant, Cameron County, Texas, and said 14.51 Acre
Tract  being  more  particularly  described  as  follows:

COMMENCING  from  a  concrete  monument  found  at Corps of Engineers (U.S.E.D.)
Station  81 + 500 and the North 4+50 Reference Line from the original centerline
of  the  Brownsville Ship  Channel, thence North 06 deg. 22 min. 22 sec. West, a
distance  of 896.32 feet to a 1/2" iron rod found on the North Right-of-Way line
of  State  Highway No. 48, thence North 03 deg. 14 min. 55 sec. West, a distance
of  512.82  feet  to a 1/2" iron rod found, a total distance of 811.67 feet to a
1/2"  iron  rod  found, thence South 86 sec. 47 min. 08 sec. West, a distance of
18.36  feet  to  a point for the Southeast corner and PLACE OF BEGINNING of this
tract;

THENCE, along the North line of a certain 0.25 Acre Tract, South 86 deg. 47 min.
08  sec.  West,  a  distance of 739.02 feet to a punch hole found on concrete, a
total  distance  of  757.63  feet on the East Right-of-Way line of Chemical Rd.,
(100.0  Ft.  R.O.W.)  for  the  Southwest  corner  of  this  tract;

THENCE,  along  the East Right-of-Way line of Chemical Rd. North 03 deg. 14 min.
30  sec.  West, a distance of 834.14 feet to a point for the Northwest corner of
this  tract;

THENCE,  North 86 deg. 43 min. 40 sec. East, a distance of 18.17 feet to a punch
hole  found, a total distance of 757.53 feet to a point for the Northeast corner
of  this  tract;

THENCE,  South  03  deg.  14 min. 55 sec. East, a distance of 834.91 feet to the
PLACE  OF  BEGINNING,  containing  14.51  Acres  of  land,  more  or  less.


                              Exhibit "A" - Page 1
<PAGE>
                              0.25 ACRE TRACT "B"


BEING  a 0.25 Acre Tract of land out of the 462.26 Acre Union Carbide Tract, out
of  Share  32,  Espiritu  Santo Grant, Cameron County, Texas, and said 0.25 Acre
Tract  being  more  particularly  described  as  follows:

COMMENCING  from  a  concrete  monument  found  at Corps of Engineers (U.S.E.D.)
station 81+500 and the North 4+50 Reference Line from the original centerline of
the  Brownsville  Ship  Channel,  thence  North  06 deg. 22 min. 22 sec. West, a
distance  of 896.32 feet to a 1/2" iron rod found on the North Right-of-Way line
of  State  Highway No. 48, thence North 03 Deg. 14 Min. 55 sec. West, a distance
of 512.82 feet to a 1/2" iron rod found and a total distance of 797.67 feet to a
1/2"  iron  rod  found  for  the Southeast corner and PLACE OF BEGINNING of this
tract;

THENCE, along the North line of a certain 16.40 Acre Tract South 86 deg. 47 min.
08  sec.  West,  a  total distance of 775.99 feet, to a 1/2" iron rod set at the
East Right-of-Way line of Chemical Rd. (100 ft R.O.W.), for the Southwest corner
of  this  tract;

THENCE,  along the East Right-of-Way line of Chemical Rd. (100 Ft. R.O.W.) North
03 deg. 14 min. 30 sec. West, a total distance of 14.00 feet, to a 1/2" iron rod
for  the  Northwest  corner  of  this  tract;

THENCE, along the South line of a certain 14.51 Acre Trace North 86 deg. 47 min.
08  sec.  East,  a  distance of 775.99 feet to a 1/2" iron rod found on the West
line  of  a  certain  11.59  Acres  (Statia  Terminals  Southwest, Inc.) for the
Northeast  corner  of  this  tract;

THENCE,  along  the  West  line  of  a  certain  11.59  Acres  (Statia Terminals
Southwest.  Inc.),  South 03 deg. 14 min. 55 sec. East, a distance of 14.00 feet
to  the  PLACE  OF  BEGINNING,  containing  0.25  Acres  of  land, more or less.


                              Exhibit "A" - Page 2
<PAGE>
                              16.40 ACRE TRACT "C"


BEING a 16.40 Acre Tract of land out of the 462.26 Acre Union Carbide Tract, out
of  Share  32,  Espiritu Santo Grant, Cameron County, Texas, and said 16.40 Acre
Tract  being  more  particularly  described  as  follows:

COMMENCING  from  a  concrete  monument  found  at Corps of Engineers (U.S.E.D.)
Station  81 + 500 and the North 4+50 Reference Line from the original centerline
of  the  Brownsville  Ship  Channel thence North 55 deg. 00 min. 59 sec. West, a
distance  of  1050.50 feet to a 2" pipe w/brass cap found at the intersection of
the  North  Right-of-way  line of State Highway No. 48 and the East Right-of-way
line  of  Chemical  Rd.  for the Southwest corner and PLACE OF BEGINNING of this
tract;

THENCE,  along  the East Right-of-way line of Chemical Rd. North 03 deg. 14 min.
30  SEC.  West,  a  total distance of 1043.37 feet to a point on South line of a
certain  0.25  Acre  Tract  "B"  for  the  Northwest  corner  of  this  tract;

THENCE,  along the South line of a certain 0.25 Acre Tract "B", North 86 deg. 47
min.  08  sec. East, a total distance of 775.99 feet to a 1/2" iron rod found on
the  West  line of a certain 11.59 Acre Tract (Statia Terminals Southwest, Inc.)
for  the  Northeast  corner  of  this  tract;

THENCE,  along  the West line of said 11.59 Acre Tract, South 03 deg. 14 min. 55
sec. East, a total distance of 797.67 feet to a 1/2" iron rod found on the North
Right-of-way  line  of  State  Highway  No.  48 for the Southeast corner of this
tract;

THENCE, along the North Right-of-way line of State Highway No. 48, South 69 deg.
14 min. 00 sec. West, a total distance of 813.86 feet to the PLACE OF BEGINNING,
containing  16.40  Acres  of  land,  more  or  less.


                              Exhibit "A" - Page 3
<PAGE>