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                                                                   EXHIBIT 10.8

                            PIPELINE LEASE AGREEMENT

                                 by and between

                         MID-AMERICA PIPELINE COMPANY,

                                   as LESSOR,

                                      and

                            NAVAJO PIPELINE COMPANY,

                                   as LESSEE
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                            PIPELINE LEASE AGREEMENT

      THIS PIPELINE LEASE AGREEMENT (this "Lease" or this "Agreement") is
entered into by and between MID-AMERICA PIPELINE COMPANY, a Delaware corporation
("Lessor") and NAVAJO PIPELINE COMPANY, a Delaware corporation ("Lessee").

                                 R-E-C-I-T-A-L-S

      A.    Lessor is the owner of an 8" natural gas liquids pipeline currently
running from Lessor's Kutz Station in San Juan County, New Mexico to Lessor's
Hobbs Station in Gaines County, Texas. Lessor currently uses the 8" pipeline to
transport NGL south from its Kutz Station past White Lakes Station to its Hobbs
Station.

      B.    Lessee, and/or its affiliates, is engaged in the business of
refining crude oil into gasoline and other petroleum products and the
transportation and sale of such products. Lessor and Lessee desire to enter into
a transaction in which Lessee will lease the 8" pipeline from White Lakes
Station to Kutz Station running from Milepost 80.65 through Milepost 415.29, as
encompassed in the Alignment Sheets attached hereto as Exhibit A, together with
all attendant equipment and systems (hereinafter collectively referred to as the
"Pipeline System") and 100% of its capacity on an exclusive basis, subject to
common carrier requirements, for the purpose of transporting petroleum products
from White Lakes Station to Kutz Station. The origin of the Pipeline System will
be Lessor's White Lakes Station and the terminus will be at Lessor's Kutz
Station.

                               W-I-T-N-E-S-S-E-T-H

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, Lessor and Lessee agree as
follows:

      1.    DEMISE. Lessor, for and in consideration of the covenants and
agreements hereinafter set forth to be kept and performed by both parties, does
hereby demise and lease to Lessee for the Lease Term (hereinafter defined) the
Pipeline System and 100% of its capacity for transporting petroleum products
and/or crude oil from White Lakes Station to Kutz Station (provided; however, if
Lessee elects to transport crude oil: (1) it may do so only subject to any
Applicable Laws, which, at Lessee's expense, Lessor shall take reasonable steps
to address; and (2) if NGLs shipped on the Pipeline System by Lessor after
surrender of the Pipeline System by Lessee as referenced in Paragraph 18 are
crude-contaminated in excess of Lessor's specifications in an amount in excess
of 5,000 barrels, Lessor shall notify Lessee and Lessor and Lessee in
consultation and at Lessee's expense shall decontaminate all contaminated NGLs
and take such other steps as are reasonably necessary to resolve the
contamination.).

      2.    LESSOR'S WORK. Attached to this Lease as Exhibit "B" is a
description of

PIPELINE LEASE AGREEMENT--PAGE 1

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work to be performed by Lessor, at its sole cost and expense (hereinafter,
"Lessor's Work"). Such work involves reversing and converting the Pipeline
System from its current use to transportation of petroleum products with a
minimum capacity of 16,000 barrels per day. Lessor covenants and agrees to
perform Lessor's Work as described on Exhibit "B" in a good and workmanlike
manner, in accordance with Applicable Laws (hereinafter defined) and industry
standards and within 180 days of Lessee's providing Lessor written notice to
proceed on Lessor's Work. Lessor may continue to use the Pipeline System until
the onset of Lessor's Work prohibits it.

      3.    LEASE TERM.

            A.    Initial Term. While the Lease will be effective upon
execution, the "Initial Term" of the Lease will commence on the Commencement
Date (hereinafter defined) and expire on that day that is the tenth (10th)
anniversary thereof. The "Commencement Date" will be the earlier to occur of (i)
that date that is the first (1st) day of the sixteenth calendar (16th) month
following the date of this Lease, (ii) one hundred eighty (180) days after
Lessee has provided written notice to Lessor that Lessee desires to commence
shipments on the Pipeline System, or (iii) such earlier date as Lessee actually
commences shipments on the Pipeline System. In the event upon the occurrence of
(i) or (ii) above Lessee's shipments cannot commence by virtue of Lessor not
having fulfilled its obligations hereunder, the Commencement Date shall be
delayed until such time as Lessee is able to commence shipments.

            B.    Option to Renew. Provided that Lessee is not in default under
this Lease beyond applicable notice and cure periods at the time of the exercise
of the Option granted herein, Lessee is granted the option (the "Option") to
renew this Lease for one (1) additional term of ten (10) years (the "Renewal
Term") commencing on the next day after the expiration of the Initial Term.
Lessee shall exercise the Option, if at all, by delivering Lessor written notice
of the exercise of the Option at least one year prior to the expiration of the
Initial Term. Lessee's lease of the Pipeline System during the Renewal Term will
be upon the same terms as for the Initial Term, except that the Base Rent
(hereinafter defined) will adjust as hereinafter provided and during the Renewal
Term Lessee will have no further right to renew this Lease.

            C.    Lease Term. The "Lease Term" shall initially be the Initial
Term and, if Lessee exercises the Option, the "Lease Term" will also include the
Renewal Term.

            D.    Lease Year. As used in this Lease, a "Lease Year" shall
initially mean the twelve (12) month period commencing on the Commencement Date
and ending on the first anniversary thereof. The term "Lease Year" will
thereafter mean the successive twelve (12) month periods ending on the
anniversary of the Commencement Date.

      4.    BASE RENT.

            A.    Initial Term. Lessee agrees to pay to Lessor rent for the
Pipeline System

PIPELINE LEASE AGREEMENT--PAGE 2

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during the Initial Term in one hundred twenty (120) monthly installments, in
advance, beginning on the Commencement Date ("Base Rent"), as follows:

      -     Lease Year 1: $316,666.67 per month ($3,800,000.00 total);

      -     Lease Year 2: $341,666.67 per month ($4,100,000.00 total);

      -     Lease Year 3: $375,000.00 per month ($4,500,000.00 total);

      -     Lease Year 4: $408,333.33 per month ($4,900,000.00 total);

      -     Lease Year 5: $441,666.67 per month ($5,300,000.00 total);

Commencing Lease Year 6 of the Initial Term, and for each Lease Year of the
Initial Term thereafter, the Base Rent shall be the greater of (1) the Base Rent
for Lease Year 5 of the Initial Term or, (2) an amount determined by multiplying
the Base Rent for the immediately preceding Lease Year by the Base Rent
Adjuster. The "Base Rent Adjuster" shall be determined by dividing the Producer
Price Index for Finished Goods (as found in Table 1 of the Product Prices and
Price Indexes published by the U.S. Department of Labor, Bureau of Labor
Statistics) ("PPIFG") for the last month of the immediately preceding Lease Year
for which such index has been published by the United States Government by the
PPIFG published for the same month of the second immediately preceding Lease
Year and subtracting one one-hundredth (0.01) from the quotient so obtained. In
the event the United States Government should no longer publish the PPIFG, then
the parties shall mutually agree upon an alternative index that most nearly
captures the change in prices reflected therein for purposes of calculating the
Base Rent Adjuster.

            B.    Renewal Term. Base Rent for the first Lease Year of the
Renewal Term (the eleventh (11th) Lease Year) shall be the greater of (1)
$441,666.67, multiplied by the quotient obtained by dividing Lessor's posted
tariff for NGL movement from Group 110 to Hobbs in effect on the day the Initial
Term expires by Lessor's posted tariff for NGL movement from Group 110 to Hobbs
on the last day of the fifth (5th) Lease Year of the Initial Term, or (2) the
Base Rent in effect during the tenth (10th) Lease Year of the Initial Term
multiplied by the Base Rent Adjuster; provided, however, in no event shall the
Base Rent be less than $441,666.67. The Base Rent in effect for each subsequent
Lease Year of the Renewal Term shall be the greater of (1) the Base Rent in
effect for the first (1st) Lease Year of the Renewal Term, or (2) the Base Rent
in effect for the immediately preceding Lease Year of the Renewal Term
multiplied by the Base Rent Adjuster.

            C.    Payment of Base Rent. Each installment of Base Rent shall be
due and payable on the first day of each month. Any installment of Base Rent due
for any fractional month shall be prorated based upon the actual number of days
in that month. All obligations of Lessee measured by Lease Years shall be
prorated as appropriate based upon the number of days in the applicable Lease
Year during the term of this Lease divided by the actual number of days in such
Lease Year. Base Rent shall be paid at the times and in the amounts provided for
herein in legal tender of the United States of America to Lessor by wire
transfer of immediately available funds at the address specified in Paragraph 21
hereof or to such other person or at such other

PIPELINE LEASE AGREEMENT--PAGE 3

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address as Lessor may from time to time designate in writing.

      5.    OPERATION OF THE PIPELINE. Lessor shall at all times during the
Lease Term use all reasonable efforts to operate the Pipeline System for the
benefit of Lessee, subject to common carrier requirements as more specifically
discussed herein. Lessor shall operate the Pipeline System and Lessee shall
operate its related facilities in accordance with all Applicable Laws and in
accordance with industry standards. As used herein, the term "Applicable Laws"
means and includes any and all federal, state and local laws, ordinances,
orders, easements and right-of-way agreements of record, rules, and regulations
of all governmental bodies (state, federal, tribal and municipal) applicable to
or having jurisdiction over the use, occupancy, operation and maintenance of the
Pipeline System, as such may be amended or modified from time to time. Lessor
shall not be responsible for measurement "overs and shorts" other than for
product losses arising from fault or failure of Lessor to satisfy its
obligations hereunder.

      6.    SHIPMENTS AND TARIFFS. Lessee shall at all times during the Lease
Term be solely responsible for shipments of product and will publish and file
tariffs in its own name and in accordance with Applicable Laws covering capacity
in the Pipeline System. Lessor shall have the right to review and approve such
tariffs prior to filing, with such approval not to be unreasonably withheld.
Lessee agrees that it will not impair and at its expense will take all
reasonable steps to protect Lessor's rights under all Applicable Laws respecting
the Pipeline System to the extent such rights are materially threatened by
virtue of any act or failure to act of Lessee hereunder. In the event counsel
jointly retained by Lessor and Lessee is of the opinion that such rights are
materially threatened by virtue of an act or failure to act of Lessee, Lessee
must take all the reasonable steps as referenced above in this paragraph 6.
Lessee shall collect for its own account all revenues payable by shippers
applicable to the Pipeline System. From and after the Commencement Date,
Lessee's designated shipper(s) will be responsible for all linefill in the
Pipeline System.

      7.    ALTERATIONS BY LESSEE. Except as expressly permitted hereby, Lessee
may not alter or make any modifications to the Pipeline System without Lessor's
prior written consent, such consent not to be unreasonably withheld. Lessee may,
however, without Lessor's prior written consent, but with notice to Lessor and
at Lessee's sole cost and expense, increase the capacity of the Pipeline System
through the introduction of drag reducing agents, increased horsepower or a
combination thereof. If Lessee desires to increase capacity through any other
means it must obtain the consent of Lessor, with such consent not to be
unreasonably withheld. Lessee may elect to undertake to increase the capacity of
the Pipeline System itself, in which event Lessor shall have the right to
oversee the increase in capacity, or request that Lessor perform such, in which
event Lessee and Lessor shall mutually agree upon a reasonable cost for such
increase in capacity.

      8.    MAINTENANCE AND REPAIR. Lessor, at its sole cost and expense, shall
maintain all aspects of the Pipeline System in good condition and repair, in
accordance with Applicable Laws and in accordance with industry standards. If
any changes, modifications or

PIPELINE LEASE AGREEMENT--PAGE 4

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alterations to the Pipeline System are required during the Lease Term due to the
enactment or amendment of Applicable Laws, then Lessor shall promptly make such
changes, modifications or alterations and will bear the cost thereof.
Notwithstanding Lessor's obligation to repair and maintain the Pipeline System
at its sole cost and expense, Lessee shall be responsible for the incremental
cost of maintaining and repairing those aspects of the Pipeline System relating
solely to alterations or modifications to the Pipeline System requested or made
by Lessee for the sole purpose of increasing the capacity of the Pipeline System
as provided in Paragraph 7 above. Such costs shall be paid by Lessee within
fifteen (15) days of receipt of invoice from Lessor.

      9.    ADDITIONAL PIPELINE CONNECTIONS. Lessor hereby grants Lessee
permission to connect petroleum terminals and pipeline connections to the
Pipeline System at points at or between Lessor's White Lakes Station and Kutz
Station provided that the construction, connection, operation and maintenance of
such will be at Lessee's sole cost and expense and subject to the terms and
provisions of Exhibit B attached hereto.

      10.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR. Lessor
represents, warrants and covenants to Lessee that:

            A.    Title. Lessor has good, marketable and indefeasible title to
the Pipeline System, subject only to the easements/rights-of-way on which the
Pipeline System exists and the agreements creating same.

            B.    Organization. Lessor is duly organized, validly existing and
in good standing under the laws of the state of its organization, and is duly
qualified to transact business in the state in which the Pipeline System is
situated.

            C.    Authority. Lessor has all requisite power and authority, has
taken all actions required by its organizational documents and applicable law,
and has obtained all necessary consents, to execute and deliver this Lease and
to consummate the transactions contemplated in this Lease.

            D.    Other Agreements, etc. Neither the execution of this Agreement
nor the confirmation by Lessor of the transactions contemplated hereby will (i)
conflict with or result in any breach of the terms, conditions or provisions of,
or constitute a default under, or result in any termination of easement or
right-of-way on which the Pipeline Systems is located; (ii) violate any
restriction to which Lessor or the Pipeline System is subject; (iii) constitute
the violation of any Applicable Laws; or (iv) result in the creation of any
lien, charge or encumbrance upon the Pipeline System or any part thereof.

            E.    Proceedings. There are no attachments, executions, assignments
for the benefit of creditors, or voluntary or involuntary bankruptcy
proceedings, or under any debtor relief laws, contemplated by or pending or
threatened against Lessor or the Pipeline System.

PIPELINE LEASE AGREEMENT--PAGE 5

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            F.    Litigation. Lessor is not now a party to any material
litigation, arbitration or administrative proceeding (i) with any person or
entity having or claiming any interest in the Pipeline System, or (ii) affecting
or questioning Lessor's title to the Pipeline System or Lessor's ability to
perform its obligations under this Lease. Lessor knows of no presently pending
or threatened material litigation, arbitration or administrative proceeding
affecting or questioning Lessor's title to, or use of, the Pipeline System or
any part thereof, or Lessor's ability to perform its obligations under this
Lease.

            G.    Compliance with Laws. To the best of Lessor's knowledge and
belief, all Applicable Laws bearing on the construction or operation of the
Pipeline System have been complied with, the Pipeline System currently complies
with all Applicable Laws, and the operation of the Pipeline System as
contemplated by this Lease will not violate any such Applicable Laws.

            H.    Consents. As of the Commencement Date, no consent to the
execution or implementation of this Lease is required from any third party,
including the grantor of any easement on which the Pipeline System is located
and the owner of any right-of-way on which the Pipeline System is located.

            I.    Administrative Notices. Lessor has not received notice of, and
has no other knowledge or information of, any pending or contemplated change in
any Applicable Laws applicable to the Pipeline System, or any pending or
threatened judicial or administrative action, or any action pending or
threatened, or of any natural or artificial condition upon or affecting the
Pipeline System, or any part thereof, any of which would result in any material
change in the condition of the Pipeline System, or any part thereof, or would in
any way limit or impede the operation of the Pipeline System.

            J.    Licenses. Lessor possesses all licenses, certificates and
permits that are required to fulfill all of its obligations hereunder.

            K.    Taxes. There are no unpaid taxes, assessments or charges
against the Pipeline System.

            L.    Condemnation. Lessor has no knowledge of any condemnation,
eminent domain or similar proceedings having been instituted or threatened
against the Pipeline System.

            M.    Encumbrances. Lessor may not further encumber the Pipeline
System or any part thereof without the prior written consent of Lessee, which
consent shall not be unreasonably withheld.

            N.    True and Correct. To Lessor's best knowledge, after reasonable
inquiry, all information and other items heretofore or hereafter submitted to
Lessee by or on behalf of Lessor are true, correct and complete. Lessor is not
aware of any omission to supply Lessee with any material information or other
items with respect to the Pipeline System, its history, prospects or

PIPELINE LEASE AGREEMENT--PAGE 6

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operations, or any information which may be required to prevent the information
or other items already supplied from being misleading.

Lessor acknowledges that the execution of this Lease by Lessee has been made,
and the lease of the Pipeline System by Lessee will have been made, in material
reliance by Lessee on Lessor's representations and warranties contained in this
Paragraph 10.

      11.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lessee
represents, warrants and covenants to Lessor that:

            A.    Organization. Lessee is duly organized, validly existing and
in good standing under the laws of the state of its organization, and is duly
qualified to transact business in the state in which the Pipeline System is
situated.

            B.    Authority. Lessee has all requisite power and authority, has
taken all actions required by its organizational documents and Applicable Laws,
and has obtained all necessary consents, to execute and deliver this Lease and
to consummate the transactions contemplated in this Lease.

            C.    Proceedings. There are no attachments, executions, assignments
for the benefit of creditors, or voluntary or involuntary bankruptcy
proceedings, or under any debtor relief laws, contemplated by or pending or
threatened against Lessee.

            D.    Consents. No consent to the execution or implementation of
this Lease is required from any third party.

            E.    Licenses. Lessee possesses or will possess all licenses,
certificates and permits that are required to fulfill its obligations hereunder.

            F.    Liens. Lessee has no authority, express or implied, and will
not create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner bind the interest of Lessor or Lessee in the Pipeline
System or charge the Rent payable hereunder for any claim in favor of any person
dealing with Lessee, including those who may furnish materials or perform labor
for any construction or repairs.

            G.    Litigation. Lessee is not now a party to any material
litigation, arbitration or administrative proceeding affecting or questioning
Lessee's ability to perform its obligation under this Lease.

            H.    True and Correct. To Lessee's best knowledge, after reasonable
inquiry, all information and other items heretofore or hereafter submitted to
Lessor by or on behalf of Lessee are true, correct and complete.

PIPELINE LEASE AGREEMENT--PAGE 7

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Lessee acknowledges that the execution of this Lease by Lessor has been made,
and the lease of the Pipeline System by Lessor will have been made, in material
reliance by Lessor on Lessee's representations and warranties contained in this
Paragraph 11.

      12.   CONTINGENCY FOR REVIEW OF RIGHT OF WAY AGREEMENTS. Lessor agrees to
provide Lessee with copies of all easement, license and right-of-way agreements
and other documents and information pertaining to the Pipeline System, its right
to exist and be operated in its current location and condition and the impact
thereof on the rights of the parties defined under this Lease. As soon as
practicable, if Lessee in good faith determines based upon a review of such
documents and information that the intent and purpose of this Lease cannot be
realized, Lessee will give Lessor written notice thereof. The parties will then
undertake to use their best efforts to overcome the impediment discovered by
Lessee to realizing the intent and purpose of this Lease. If such cannot be
resolved to Lessee's reasonable satisfaction prior to the 180 day notice
referenced in paragraph 2 above, Lessee, at its option, may elect to terminate
this Lease.

      13.   INDEMNIFICATION. Each party hereto shall indemnify, defend, protect
and hold the other free and harmless from and against any and all claims,
liabilities, damages, costs, penalties, forfeitures, losses or expenses
(including attorneys' fees) for death or injury to any person or damage to any
property whatsoever arising or resulting in whole or in part, directly or
indirectly, out of the acts or omissions of the indemnifying party or its
employees, contractors or agents or arising out of any breach by the
indemnifying party of this Lease.

      14.   POWER COSTS. Lessee will be responsible for paying all power costs
associated with the Pipeline System in accordance with Exhibit B hereto and the
method of allocation to be agreed upon within sixty (60) days of execution of
this Agreement. Such costs shall be paid by Lessee within fifteen (15) days of
receipt of invoice from Lessor.

      15.   TAXES AND ASSESSMENTS. Lessor shall be solely responsible for and
shall timely pay all taxes, charges, royalties, levies, assessments and similar
fees and charges which arise from federal or state governmental authorities,
tribal authorities, or private action (collectively, "Taxes") applicable to the
Pipeline System or the easements/rights-of-ways on which the Pipeline System is
located. However, if after the date of this Lease new Taxes are levied against
the Pipeline System or such easements/rights-of-ways, by statute or otherwise,
Lessee will reimburse Lessor for Lessee's appropriate share of such additional
Taxes. Furthermore, Lessor will not agree to any new Taxes without first
conferring with and seeking the input of Lessee.

      16.   INSURANCE.

            A.    Maintenance of Existing Coverage. Lessor and Lessee will
maintain such or similar insurance coverages in place as exist at the time of
execution of this Agreement to the extent pertinent to the respective
obligations of each herein.

PIPELINE LEASE AGREEMENT--PAGE 8

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            B.    Waiver of Subrogation. Lessor and Lessee and all parties
claiming under them mutually release and discharge each other from all claims
and liabilities arising from or caused by any casualty or hazard which is
covered by insurance carried on the Pipeline System or carried in connection
with property on or activities conducted on the easements/rights-of-ways on
which the Pipeline Systems is located, and waive any right of subrogation which
might otherwise exist in or accrue to any person on account thereof.

      17.   ASSIGNMENT. This Lease may not be assigned by either party without
the prior written consent of the other party, with such consent not to be
unreasonably withheld, conditioned or delayed. The foregoing restrictions on
assignment shall not apply to (a) a transfer by a party to an affiliate; (b) a
transfer that is part of a merger or consolidation of a party or an affiliate of
a party with another entity in which the aggregate consideration for such merger
or consolidation is at least $100 million; or (c) a transfer that is part of a
broader sale of assets by a party or an affiliate of a party in which the
aggregate purchase price of such assets sold is at least $100 million. Any
assignment or purported assignment in violation of this paragraph 17 shall be
void.

      18.   SURRENDER UPON TERMINATION. Upon the expiration of the Lease Term,
Lessee shall surrender up the Pipeline System to Lessor with all of Lessee's
obligations hereunder fully performed. To the extent that Lessee has made (or
paid for) any alterations, improvements or modifications to the Pipeline System
that can be removed without damage to the Pipeline System, at Lessee's option
such shall remain the property of Lessee and Lessee may remove such at its sole
cost; provided that Lessee shall promptly repair any damage to the Pipeline
System caused thereby and ensure that after the removal of such equipment the
Pipeline System has a minimum capacity of 16,000 barrels per day. If such
improvements cannot readily be removed by Lessee without substantial damage to
or deprivation of the Pipeline System, such shall become the property of Lessor
upon the expiration of the Lease and Lessor shall pay an amount to be agreed
upon by Lessor and Lessee within thirty (30) days after the expiration of the
Lease, with such agreed upon amount not to exceed the depreciated value.

      19.   EVENTS OF DEFAULT

            A.    Events of Default by Lessor. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Lessor.

                  (1) A failure by Lessor to observe and perform any material
      provision or covenant of this Lease to be observed or performed by the
      Lessor, where such failure continues for thirty (30) days after written
      notice thereof by Lessee to Lessor, except that this thirty (30) day
      period shall be extended for a reasonable period of time if the alleged
      default is not reasonably capable of cure within said thirty (30) day
      period and Lessor proceeds to diligently cure the default.

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                  (2) Any failure of Lessor's representations or warranties to
      remain true and correct throughout the Lease Term; provided that no event
      of default shall occur if such representation or warranty is again true
      and correct within thirty (30) days after receipt of written notice from
      Lessee.

                  (3) The making by Lessor of any general assignment for the
      benefit of creditors, the filing by or against Lessor of a petition to
      have Lessor adjudged a bankrupt, or a petition for reorganization or
      arrangement under any law relating to bankruptcy (unless, in the case of a
      petition filed against Lessor, the same is dismissed within sixty (60)
      days), the appointment of a trustee or receiver to take possession that is
      not restored to Lessor within thirty (30) days.

            B.    Events of Default by Lessee. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Lessee:

                  (1)   Any failure by Lessee to pay Rent or make any other
      payment required to be made by Lessee hereunder, where such failure
      continues for thirty (30) days after receipt of written notice from the
      Lessor, subject to the right of Lessee, reasonably exercised, to contest
      any such payment. In the event Lessee withholds any such payment, and it
      is determined that such withholding was wrongful, Lessee shall pay
      interest to Lessor on such monies wrongfully withheld at the rate of 15%
      per annum or the maximum amount allowed by law, whichever is less.

                  (2)   A failure by Lessee to observe and perform any other
      material provision or covenant of this Lease to be observed or performed
      by the Lessee, where such failure continues for thirty (30) days after
      written notice thereof by Lessor to Lessee, except that this thirty (30)
      day period shall be extended for a reasonable period of time if the
      alleged default is not reasonably capable of cure within said thirty (30)
      day period and Lessee proceeds to diligently cure the default.

                  (3)   Any failure of Lessee's representations or warranties to
      remain true and correct throughout the Lease Term; provided that no event
      of default shall occur if such representation or warranty is again true
      and correct within thirty (30) days after receipt of written notice from
      Lessor.

                  (4)   The making by Lessee of any general assignment for the
      benefit of creditors, the filing by or against Lessee of a petition to
      have Lessee adjudged a bankrupt, or a petition for reorganization or
      arrangement under any law relating to bankruptcy (unless, in the case of a
      petition filed against Lessee, the same is dismissed within sixty (60)
      days), the appointment of a trustee or receiver to take possession that is
      not restored to Lessee within thirty (30) days.

      20.   ESTOPPELS. Each party agrees, from time to time, within ten (10)
days after

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request of the other, to deliver to the requesting party, or its designee, an
estoppel certificate stating whether or not this Lease is in full force and
effect, the date to which Base Rent has been paid, the unexpired term of this
Lease and such other factual matters pertaining to this Lease as deemed
reasonably necessary by the requesting party.

      21.   NOTICES. Any notice or communication required or permitted in this
Lease shall be given in writing, sent by (a) personal delivery, or (b) expedited
delivery service with proof of delivery, or (c) United States mail, postage
prepaid, registered or certified mail, return receipt requested, addressed:

      if to Lessor, as follows:

                                Mid-America Pipeline Company
                                1800 South Baltimore
                                Tulsa, OK 74119
                                Attn: President

      and, if to Lessee, as follow

                               Navajo Pipeline Company
                               P. O. Box 159
                               Artesia, NM 88210
                               Attn: President

or to such other address or to the attention of such other person as shall be
designated by the applicable party and on fifteen (15) days notice from time to
time in writing and sent in accordance herewith. Any such notice or
communication shall be deemed to have been given either at the time of personal
delivery or, in the case of delivery service or mail, upon receipt.

      22.   RIGHT OF FIRST REFUSAL. If during the Lease Term (or any extension
thereof) or upon the termination of the Lease Lessee should receive a bona fide
third party offer expressing all material terms for the acquisition of any of
its terminals and pipelines connected to or used solely in connection with the
Pipeline System (herein the "Assets") that Lessee wishes to accept, then prior
to accepting such offer, Lessee shall first provide Lessor with notice of the
offer and its terms. Lessor will have thirty (30) days from its receipt of such
offer to elect to acquire the Assets on the same terms and conditions as are set
forth in the third party offer. If Lessor elects to purchase the Assets on such
terms, then the parties will promptly enter into a formal asset sale agreement
embodying the terms contained in the third party offer. If Lessor fails to elect
in writing to purchase the assets on the terms of the third party offer within
this thirty (30) day time period, then Lessor will have forever waived the right
of first refusal with respect to this offer. The right of first refusal granted
herein applies only to a contemplated sale of assets of Lessee in which the
Assets constitute all or substantially all of the assets subject to the sale.
Additionally, the right of first refusal shall not apply to any sale or transfer
of the Assets to an

PIPELINE LEASE AGREEMENT--PAGE 11

<PAGE>


affiliate of Lessee.

      Notwithstanding the above, the term "Assets" specifically excludes any
pipeline or terminals and related equipment constructed by Lessee and running
from Lessee's Artesia, New Mexico refinery to the Lessor's White Lakes Station.
Such pipeline, terminals and related equipment will at all times not be subject
to the foregoing right of first refusal.

      23    NO RENT ABATEMENT FOR PROBLEM AT LESSEE'S FACILITIES. In no event
shall a problem at Lessee's facilities, either its refining facilities or the
petroleum terminals and pipeline connections referenced in paragraph 9 above,
excuse Lessee's obligations to pay rent hereunder, unless and to the extent such
problem was caused or contributed to by Lessor.

      24.   LIMITATION OF LIABILITY. Neither party shall be liable for punitive
or consequential damages of any kind arising out of or in any way connected with
the performance of or failure to perform this Agreement.

      25.   MISCELLANEOUS.

            A.    Confidentiality. Provided that express consent of both parties
has been given, the parties may discuss the existence of this Agreement, but not
the particulars of its terms and conditions.

            B.    Headings/Gender. Words of any gender used in this Lease shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, unless the context otherwise
requires. The captions inserted in this Lease are for convenience only and in no
way define, limit or otherwise describe the scope or intent of this Lease, or
any provision hereof, or in any way affect the interpretation of this Lease.

            C.    Successors and Assigns. Without limiting the terms of
Paragraph 17 above, the terms, provisions and covenants and conditions contained
in this Lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, executors, personal
representatives, legal representatives, successors and assigns, except as
otherwise herein expressly provided.

            D.    Entire Agreement. This Lease constitutes the entire
understanding and agreement of the Lessor and Lessee with respect to the subject
matter of this Lease, and contains all of the covenants and agreements of Lessor
and Lessee with respect thereto. Lessor and Lessee each acknowledge that no
representations, inducements, promises or agreements, oral or written, have been
made by Lessor or Lessee, or anyone acting on behalf of Lessor or Lessee, which
are not contained herein, and any prior agreements, promises, negotiations, or
representations not expressly set forth in this Lease are of no force or effect.
This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.

PIPELINE LEASE AGREEMENT--PAGE 12


<PAGE>

            E.    Severability. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Lease, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby,
and it is also the intention of the parties to this Lease that in lieu of each
clause or provision of this Lease that is illegal, invalid or unenforceable,
there be added, as a part of this Lease, a clause or provision as similar in
terms to such illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.

            F.    Date of Lease. All references in this Lease to "the date
hereof" or similar references shall be deemed to refer to the last date, in
point of time, on which all parties hereto have executed this Lease.

            G.    Counterparts. This Lease may be executed in counterparts, each
being deemed an original, but together constituting only one instrument.

            H.    Time for Performance TIME IS OF THE ESSENCE WITH RESPECT TO
ALL PERFORMANCE OBLIGATIONS CONTAINED IN THIS LEASE.

            I.    Attorneys' Fees. In the event it becomes necessary for either
party hereto to file a suit respecting the subject matters of this Lease
including without limitation to enforce this Lease or any provisions contained
herein, the party prevailing in such action shall be entitled to recover, in
addition to all other remedies or damages, reasonable attorneys' fees incurred
in such suit.

            J.    Law Governing and Venue. THIS LEASE SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW MEXICO WITHOUT REGARD TO ITS CONFLICT OF LAWS, AND
VENUE AND JURISDICTION FOR ANY ACTION OR PROCEEDING RESPECTING THE SUBJECT
MATTERS OF THIS LEASE INCLUDING WITHOUT LIMITATION TO ENFORCE THIS LEASE OR ANY
PROVISIONS CONTAINED HEREIN SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS
LOCATED IN ALBUQUERQUE, NEW MEXICO.

            K.    Waiver. No waiver by either party of any provision of this
Lease or of any default, event of default or breach hereunder shall be deemed to
be a waiver of any other provision of this Lease, or of any subsequent default,
event of default or breach of the same or any other provision. Either party's
consent to or approval of any act requiring consent or approval shall not be
deemed to render unnecessary the obtaining of consent to or approval of any
subsequent act requiring consent. No act or thing done by Lessor or Lessor's
agents during the term of this Lease shall be deemed an acceptance of a
surrender of the Pipeline System, unless done in writing signed by Lessor.

            L.    Interpretation. The parties hereto agree that it is their
intention hereby to

PIPELINE LEASE AGREEMENT--PAGE 13

<PAGE>

create only the relationship of Lessor and Lessee, and no provision hereof, or
act of either party hereunder, shall ever be construed as creating the
relationship of principal and agent, or a partnership, or a joint venture or
enterprise between the parties hereto.

            M.    Amendments. This Lease may not be modified or amended, except
by an agreement in writing signed by Lessor and Lessee. The parties may waive
any of the conditions contained herein or any of the obligations of the other
party hereunder, but any such waiver shall be effective only if in writing and
signed by the party waiving such conditions or obligations, except as
specifically set forth herein.

            N.    Exhibits. All exhibits referenced herein as being attached
hereto are hereby incorporated herein by reference as if set forth in full in
this Lease

      EXECUTED BY LESSOR, this 11th day of March, 1996.

                                           MID-AMERICA PIPELINE COMPANY,
                                           a Delaware corporation

                                           By: /s/ Robert G. Sachse
                                               --------------------
                                           Name:  Robert G. Sachse
                                           Title: Chairman

      EXECUTED BY LESSEE, this 8th day of March, 1996.

                                           NAVAJO PIPELINE COMPANY,
                                           a Delaware corporation

                                           By: /s/ Christopher L. Cebla
                                               ------------------------
                                           Name:  Christopher L. Cebla
                                           Title: V.P. and Secretary

Exhibits:

Exhibit A: Alignment Sheets

Exhibit B: Scope of Work & Operating Procedures

PIPELINE LEASE AGREEMENT--PAGE 14

<PAGE>

                                    EXHIBIT A

                                ALIGNMENT SHEETS

<PAGE>

<TABLE>
<CAPTION>
ALIGNMENT SHEET           MILE POSTS                   COUNTY            STATIONS
---------------           ----------                   ------            --------
<S>               <C>                           <C>                     <C>
5818-AL-16        M.P.  79.96 to M.P.  84.89    Chaves                  White Lakes
                                                                        (M.P. 80.65)
5818-AL-17        M.P.  84.89 to M.P.  90.38    Chaves
5818-AL-18        M.P.  90.38 to M.P.  95.30    Chaves
5818-AL-19        M.P.  95.30 to M.P. 100.80    Chaves
5818-AL-20        M.P. 100.80 to M.P. 106.29    Chaves
5818-AL-21        M.P. 106.29 to M.P. 111.40    Chaves
5818-AL-22        M.P. 111.40 to M.P. 116.53    Chaves
5818-AL-23        M.P. 116.53 to M.P. 121.63    Chaves
5818-AL-24        M.P. 121.63 to M.P. 126.89    Chaves
5818-AL-25        M.P. 126.89 to M.P. 132.50    Chaves & DeBaca
5818-AL-26        M.P. 132.50 to M.P. 137.99    Debaca
5818-AL-27        M.P. 137.99 to M.P. 143.47    Debaca
5818-AL-28        M.P. 143.47 to M.P. 148.58    Debaca
5818-AL-29        M.P. 148.58 to M.P. 153.69    Debaca & Lincoln
5818-AL-30        M.P. 153.69 to M.P. 158.81    Lincoln
5818-AL-31        M.P. 158.81 to M.P. 164.30    Lincoln
5818-AL-32        M.P. 164.30 to M.P. 169.81    Lincoln & Guadalupe
5818-AL-33        M.P. 169.81 to M.P. 175.38    Guadalupe
5818-AL-34        M.P. 175.38 to M.P. 180.53    Guadalupe
</TABLE>

                            EXHIBIT A-1

<PAGE>

<TABLE>
<CAPTION>
ALIGNMENT SHEET           MILE POSTS                   COUNTY            STATIONS
---------------           ----------                   ------            --------
<S>               <C>                           <C>                      <C>
5818-AL-35        M.P. 180.53 to M.P. 185.64    Guadalupe & Torrance
5818-AL-36        M.P. 185.64 to M.P. 191.16    Torrance
5818-AL-37        M.P. 191.16 to M.P. 196.46    Torrance
5818-AL-38        M.P. 196.46 to M.P. 201.57    Torrance
5818-AL-39        M.P. 201.57 to M.P. 206.88    Torrance
5818-AL-40        M.P. 206.88 to M.P. 211.99    Torrance
5818-AL-41        M.P. 211.99 to M.P. 217.25    Torrance
5818-AL-42        M.P. 217.25 to M.P. 222.58    Torrance
5818-AL-43        M.P. 222.58 to M.P. 228.07    Torrance
5818-AL-44        M.P. 228.07 to M.P. 233.35    Torrance
5818-AL-45        M.P. 233.35 to M.P. 239.38    Torrance
5818-AL-46        M.P.  239.4 to M.P.  245.9    Torrance & Sante Fe
5818-AL-47        M.P.  245.9 to M.P.  250.3    Sante Fe
5818-AL-47A       M.P.  250.3 to M.P.  252.3    Sante Fe
5818-AL-47B       M.P.  252.2 to M.P.  255.3    Sante Fe
5818-AL-48        M.P.  255.3 to M.P.  259.6    Sante Fe & Bernalillo
5818-AL-49        M.P.  259.6 to M.P.  265.3    Sandoval & Bernalillo
5818-AL-50        M.P.  265.3 to M.P.  271.0    Sandoval
5818-AL-51        M.P.  271.0 to M.P.  276.5    Sandoval
5818-AL-52        M.P.  276.5 to M.P.  281.8    Sandoval
</TABLE>

                           EXHIBIT A-2

<PAGE>

<TABLE>
<CAPTION>
ALIGNMENT SHEET           MILE POSTS                   COUNTY            STATIONS
---------------           ----------                   ------            --------
<S>               <C>                           <C>                      <C>
5818-AL-53        M.P. 281.8 to M.P. 287.2      Sandoval
5818-AL-54        M.P. 287.2 to M.P. 292.4      Sandoval
5818-AL-55        M.P. 292.4 to M.P. 298.1      Sandoval
5818-AL-56        M.P. 298.1 to M.P. 304.5      Sandoval
5818-AL-57        M.P. 304.5 to M.P. 310.6      Sandoval
5818-AL-58        M.P. 310.6 to M.P. 316.4      Sandoval
5818-AL-59        M.P. 316.4 to M.P. 322.5      Sandoval
5818-AL-60        M.P. 322.5 to M.P. 328.7      Sandoval
5818-AL-61        M.P. 328.7 to M.P. 334.7      Sandoval
5818-AL-62        M.P. 334.7 to M.P. 340.6      Sandoval
5818-AL-63        M.P. 340.6 to M.P. 346.3      Sandoval & McKinley
5818-AL-64        M.P. 346.3 to M.P. 352.1      Sandoval & McKinley
5818-AL-65        M.P. 352.1 to M.P. 357.9      Sandoval
5818-AL-66        M.P. 357.9 to M.P. 363.8      Sandoval
5818-AL-67        M.P. 363.8 to M.P. 369.8      Sandoval & Rio Arriba
5818-AL-68        M.P. 369.8 to M.P. 374.5      Rio Arriba
5819
5819-AL-69        M.P. 374.5 to M.P. 380.3      San Juan & Rio Arriba
5819-AL-70        M.P. 380.3 to M.P. 386.3      San Juan
5819-AL-71        M.P. 386.3 to M.P. 392.1      San Juan
</TABLE>

                             EXHIBIT A-3

<PAGE>

<TABLE>
<CAPTION>
ALIGNMENT SHEET        MILE POSTS                 COUNTY                 STATIONS
---------------        ----------                 ------                 --------
<S>               <C>                           <C>                     <C>
5819-AL-72        M.P. 392.1 to 398.1           San Juan
5819-AL-73        M.P. 398.1 to 403.7           San Juan
5819-AL-74        M.P. 403.7 to 409.8           San Juan
5819-AL-75        M.P. 409.8 to 415.6           San Juan                Kutz
                                                                        (M.P. 415.29)
</TABLE>

                             EXHIBIT A-4

<PAGE>

                                    EXHIBIT B

                      SCOPE OF WORK & OPERATING PROCEDURES

<PAGE>

                      SCOPE OF WORK & OPERATING PROCEDURES

                 FOUR CORNERS 8" CONVERSION TO REFINED PRODUCTS

Summary

The Four Corners 8" pipeline from Kutz Station to White Lakes Station will be
converted from LPG service to refined products service. Flow of the line will be
reversed with product entering the line at White Lakes Station and flowing
northwest to Kutz Station.

History

The 8" Four Corners line was installed in 1972 to transport LPG from northwest
New Mexico to Gaines County, Texas. This line is currently paralleled with 10"
and 12" pipelines, all transporting LPG.

Future Service

Navajo Pipeline Company will transport refined products and/or crude oil from
Artesia, New Mexico to the White Lakes Station. The 8" Four Corners line will
transport the refined products to Navajo terminals which may be constructed at
points between White Lakes Station and Kutz Station.

Pump Stations

There is one existing pump at each of four existing pump stations on the 8" line
which will be dedicated to refined products service. The pumps are located at
White Lakes, Duran, Edgewood, and San Luis pump stations. All pumps are driven
by gas turbines with the exception of Edgewood which is powered by an electric
motor. MAPL will continue to operate two pumps in LPG service at each station.

Energy costs for the dedicated pumps utilized by Navajo will be paid by Navajo
and measured with dedicated meters. Energy use for shared services (electricity
for air compressors, motorized valve operators, controls, lights, etc.) will be
allocated 1/3 Navajo and 2/3 MAPL.

Measurement

Navajo will be responsible for operations and maintenance of receipt and
delivery meters on the system. MAPL will receive pressure, temperature, flow and
gravity information from the measurement facilities for use in pipeline control.

Operation and Maintenance

MAPL will continue to operate and maintain the existing 8" line from White Lakes
Station to Kutz Station in accordance with DOT Part 195 regulations, and Navajo
will also comply with all DOT Part 195 regulations with respect to any
connections Navajo may make to the 8" Four Corners Line, MAPL Pipeline Control
in Tulsa will continue to operate and schedule the line. Navajo will operate and
maintain the line to White Lakes Station as well as any delivery terminals and
related facilities it may have constructed.

                                   EXHIBIT B-1

<PAGE>

Over Pressure Protection

Navajo will provide adequate over pressure safety devices to protect any
delivery terminals. MAPL will deliver products at pressures not to exceed 1650
psig. MAPL will provide over pressure devices for the protection of its system.
Receipt pressure at White Lakes shall not exceed 1650 psig nor shall it be less
than 150 psig.

MAPL Modifications

MAPL will make the following modifications to its system at its own expense:

     Pipeline:         The existing 8" line will be reversed to allow for flows
                       from White Lakes Station to Kutz Station. LPG will be
                       displaced from the line with nitrogen, check valves will
                       be removed and the line blinded off from the existing LPG
                       system.

     Connections:      Receipt and delivery connections will be in the form of a
                       8", 900# ANSI block valve at the White Lakes Station
                       fence and on the mainline and at the edge of the ROW at
                       terminals constructed by Navajo.

     Pumps:            Piping will be modified at White Lakes, Duran, Edgewood
                       and San Luis pump stations to allow for a dedicated pump
                       on the 8" line to pump products from White Lakes Station
                       to Kutz Station. These pumps are currently identified as
                       the "#1 blue unit" at each pump station

     SCADA:            A communications system will be installed to transmit
                       data from the delivery and receipt meters to Tulsa.

     Energy:           Meters will be installed to measure the energy used by
                       each dedicated pump.

Navajo Modifications

Navajo will make the following installations at its expense:

     Pipeline:         A products pipeline may be installed to the receipt
                       connection at White Lakes Station and to the delivery
                       connections at terminals constructed by Navajo.

     Connections:      Pipeline connections to the receipt and delivery block
                       valves will include cathodic insulation kits for
                       electrical isolation.

     Meters:           Receipt and delivery meters will be installed at Artesia
                       and at terminal interconnects constructed by Navajo.

March 7, 1996                      EXHIBIT B-2

<PAGE>

     SCADA:            Flow, temperature, pressure and gravity information will
                       be provided at the delivery and receipt meters for MAPL's
                       use in pipeline control. Adequate space and location will
                       be given within the facility for locating MAPL's
                       equipment. Electrical power will be provided to power the
                       SCADA equipment.

     Safety:           Over pressure protection devices to protect downstream
                       equipment will be installed at terminal interconnects
                       constructed by Navajo.

Linefill

Linefill from White Lakes Station to Kutz Station is approximately 116,860 bbl
and will be provided by Navajo. Navajo will also be responsible for all costs
and expense (pigs, product, inhibitors, etc.) associated with the linefill. MAPL
will perform all venting, pigging and other operational activities.

Product Quality

All products shipped within the line will meet the specifications as required
under applicable tariffs. MAPL assumes no liability for the quality of product
delivered.

Batching

Product batches will not be separated by pigs, spheres or other physical
devices. MAPL will use its best efforts to minimize interfaces or contamination
of products shipped.

Capacity Expansion

Should Navajo desire to expand the capacity of the 8" pipeline beyond its
existing 100% capacity, Navajo will bear all expenses associated with the
design, engineering, procurement, construction, fabrication, installation and
commissioning of such equipment or modifications. All modifications and or
equipment installed shall be overseen by, with the approval of and in accordance
with the specifications of MAPL.

MAPL shall operate and maintain any and all equipment installed on the 8"
pipeline or at any of the pumping stations. Should any equipment or
modifications provided for capacity expansion require additional operations or
maintenance resources or manpower above current requirements, or require any
additional utilities, consumables or chemicals, or result in an increase in
operating or maintenance expense, these additional or increased expenses shall
be the sole responsibility of Navajo and shall be reimbursed as invoiced by
MAPL. All of these costs and expenses shall be identified and agreed to during
the design phase of any such modifications or installation.

March 7, 1996                      EXHIBIT B-3