Exhibit 10.1.3

|AMENDMENT NO. 2                                                                                   
|--------------------------------------------------------------------------------------------------
|to                                                                                                
|PARTICIPATION AND LOAN AND SECURITY AGREEMENT                                                     
|among                                                                                             
|THE CIT GROUP/EQUIPMENT FINANCING, INC.,
for itself as Lender and as Collateral Agent for Lenders,
|KEYBANK N.A.,
for itself as Lender and as Administrative Agent for Lenders                        
|and                                                                                               
|K-SEA OPERATING PARTNERSHIP L.P.,
as Borrower                                                     
|Dated as of August 11, 2004, effective as of January 14, 2004                                     

---



AMENDMENT NO. 2
TO
PARTICIPATION AND LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NO. 2, dated as of August 11, 2004 ("Amendment No. 2"), to the Participation and Loan
and Security Agreement entered into as of January 14, 2004 as amended by an Amendment No. 1 thereto dated January 29, 2004 (as so amended, the "Original
Loan Agreement"), by and amongTHE CIT GROUP/EQUIPMENT FINANCING, INC., a Delaware corporation
("CIT"), for itself as Lender and as Collateral Agent for Lenders,KEYBANK N.A., a national banking
association ("KeyBank," and together with CIT, the "Lenders"), for itself as lender and as
Administrative Agent for Lenders, andK-SEA OPERATING PARTNERSHIP L.P., a Delaware limited partnership
("Borrower"), as borrower, with its principal place of business at 3245 Richmond Terrace, Staten Island, New York 10303-0003. In
consideration of the mutual agreements contained herein, the parties hereto agree as follows:

RECITALS

All things have been done to make this Amendment No. 2, when executed and delivered by the Borrower hereunder, the legal, valid and binding obligations of
the Borrower.

All
capitalized terms not defined herein shall have the meanings assigned to such terms in the Original Loan Agreement.



Section 1.1
of the Original Loan Agreement is amended by restating the following:

"'Maintenance
CAPEX' shall mean all Capital Expenditures made for the purpose of maintaining (and not increasing) the operating capacity of the vessels during the previous
12 months".



Each and every representation, warranty and covenant made by Borrower in the Original Loan Agreement (including those representations, warranties and covenants
set forth in Articles IV, VI and VII thereof) shall survive and apply with equal force and effectmutatis mutandisto this Amendment No. 2.



Borrower shall pay to Lenders on demand all out of pocket loan costs, including, but not limited to, closing costs, attorneys' fees and expenses, recording fees
and expenses, recording taxes and record searches, incurred by Lenders in connection with the negotiation, preparation, execution and delivery of all documentation relating to the transactions
contemplated hereby and thereby.



Except as herein specifically otherwise provided, the Original Loan Agreement is in all respects ratified and confirmed, and all the terms, provisions and
conditions thereof shall be and remain in full force and effect. This Amendment No. 2 shall be limited solely to the matters expressly set forth herein and shall not, except to the extent
expressly set forth herein, (a) constitute a waiver of any term or condition of the Original Loan Agreement or of any agreements or instruments referred to therein, (b) change any right
or rights which Lenders or Borrower may now have or may have in the future under or in connection with the Original Loan Agreement or of any agreements or instruments referred to therein, or
(c) modify the Original Loan Agreement or any instruments referred to therein.

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

2

---



IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed and delivered by their proper and duly authorized officers as of the day and year first
above written.

| |  | K-SEA OPERATING PARTNERSHIP L.P.
by its general partner K-Sea OLP GP, LLC
| |  | -------------------------------------------------------------------------
| |  | By:                                                                      
| |  | THE CIT GROUP/EQUIPMENT FINANCING, INC.                                  
| |  | By:                                                                      
| |  | KEYBANK N.A.                                                             
| |  | By:                                                                      

3

---



ACKNOWLEDGMENT

|STATE OF ARIZONA   |  | ) |  |      |  | 
|------------------ |  | - |  | ---- |  | 
|                   |  | ) |  | ss.: |  | 
|COUNTY OF MARICOPA |  | ) |  |      |  | 

On this 11th day of August, 2004, before me personally appeared John J. Nicola, to me known, who being by me duly sworn, did depose and say that he is the Chief
Financial Officer of K-Sea OLP GP, LLC, the entity described in and which executed the foregoing instrument; and that he signed his name thereto pursuant to authority granted to him by the
Board of Directors of said corporation.

|                       |  | /s/FRANCIS X. NOLAN(Notary Public)
|---------------------- |  | ----------------------------------
|My Commission Expires: |  |                                   

4

---