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

                                                 BROWNSVILLE NAVIGATION DISTRICT
THE STATE OF TEXAS  )                            CONTRACT NO.  3165  "B"
                                                              -----------
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. 3165 dated January 19, 2000, 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.  3165 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
                                                ------------------
                                                CHARLES HANDLY
                                           ITS: EXECUTIVE VICE PRESIDENT

                                           ASSIGNEE:

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

                                           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  Charles 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 PARTNERSHJP, L.L.C.,
General  Partner of RIO VISTA OPERATING G.P., L.P., a Texas 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.3165 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  Brownsville  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 CORPORATION

                           METES AND BOUNDS OESCRIPTON

                                5.93 ACRE TRACT I

January 26, 2000


Beginning at an iron pin bearing North 481.8 feet along the common boundary line
between  Share  31 and Share 32 Espiritu Santo Grant from the lines intersecting
with  the North right-of-way line of Farm to Old S.H. 48; said point being North
along the share line 591.6 from a concrete monument on the above mentioned share
line.

Thence North 89 deg. 40 min. East, 287.6 feet along the toe of an existing levee
to  a  point  for  a  corner;

Thence  South  1  deg.  08  min. East, 462.4 feet to a point for a corner on the
North  right-of-way  line  of  Old  S.H.  48;

Thence  along  this  North  right-of-way line of Old S.H. 48 curving to the left
(North  71  deg. 07 min. East, 365.4 chord) to a point for the southeast corner;

Thence  North  0  deg.  40 min West, 631.56 feet along the toe of the levee to a
point  for  a  corner;

Thence,  South  71  deg.  07  min.  West,  488.0  feet  to a point for a corner;

Thence  South  85  deg.  53  min.  West,  176.0  feet  to  a point for a corner;

Thence  South  0  deg.  118.0 feet along the line between Share 31 and Share 32,
Espiritu  Santo  Grant  to  the  point  of  beginning

The  area  being  5.93  acres  more  or  less


<PAGE>
                                   EXHIBIT "A"

                             PENN OCTANE CORPORATOIN

                          METES AND BOUNDS DESCRIPTION

                               7.14 ACRE TRACT II

January 26, 2000


Beginning at an iron pin bearing North 600.0 feet along the common boundary line
between  Share 31 and Share 32, Espiritu Santo Grant from the lines intersecting
with  the North right-of-way line of Farm to Old S.H. 48; said point being North
along the Share line 709.80 feet from a concrete monument on the above mentioned
share  line.,

Thence  North  85  deg.  53  min.  East,  176  feet  to  a  point  for a corner;

Thence  North  71  deg.  07  min.  East  488.0  feet  to  a  point for a corner;

Thence  North  0  deg.  40  min.  West,  389.04  feet  to  a point for a corner;

Thence South 89 deg. 35 min. West, 630.7 feet along the North toe of an existing
levee  to  a  point  for  the  northwest  corner;

Thence  South  0  deg. 554.60 feet along the line between Share 31 and Share 32,
Espiritu  Santo  Grant  to  the  point  of  beginning.

The  area  being  7.14  acres  more  or  less


<PAGE>