Exhibit 10.3

                               FIRST AMENDMENT TO
                        ASSET PURCHASE AND SALE AGREEMENT

     THIS FIRST  AMENDMENT  TO ASSET  PURCHASE AND SALE  AGREEMENT  (this "First
Amendment") is entered into this 31st day of October, 2002, by and among:

     A.   Koch Pipeline Company, L.P., a Delaware limited partnership,  with its
          principal  place of business at 4111 East 37th Street North,  Wichita,
          Kansas 67220 ("KPL");

     B.   Koch Fertilizer Storage and Terminal Company, a Nebraska  corporation,
          with its  principal  place of business at 4111 East 37th Street North,
          Wichita,  Kansas  67220  ("KFS&T")  (KLP  and  KFS&T  are  hereinafter
          collectively referred to as "Seller"); and

     C.   Kaneb  Pipe Line  Operating  Partnership,  L.P.,  a  Delaware  limited
          partnership,  with its  principal  place  of  business  at 2435  North
          Central Expressway, Suite 700, Richardson, Texas 75080 ("Buyer").

     WHEREAS, Seller and Buyer entered into that certain Asset Purchase and Sale
Agreement dated September 17, 2002 (the "Agreement"); and

     WHEREAS, Seller and Buyer desire to amend the Agreement as provided herein.

     NOW,  THEREFORE,  for and in  consideration of the foregoing and the mutual
covenants and obligations set forth herein,  Seller and Buyer do hereby covenant
and agree as follows:

          1. Defined Terms.  Capitalized terms used but not defined herein shall
     have the meaning given to such terms in the Agreement.

          2. Revision to Section 9.01 of the  Agreement.  The first  sentence of
     Section 9.01 shall be amended to read as follows: "9.01 Time and Place. The
     closing of the  transaction  contemplated by this Agreement (the "Closing")
     shall take place at the offices of Seller in Wichita,  Kansas, beginning at
     8:00 a.m., central time, on October 31, 2002 The Closing shall be effective
     as of  12:01  a.m.  central  time  on  November  1,  2002,  except  for the
     conveyance and transfer of the Net  Inventory,  which shall be effective as
     of 8:00 a.m. central time on November 1, 2002 (the "Effective Time")."

          3. Amended Exhibits and Schedules to the Agreement.

               (a)  Existing  pages  19,  20 and 22 (of 42) of  Exhibit  B (Real
          Property)  shall be amended to replace them with the revised  pages 19
          and 20, attached hereto as Attachment A.

               (b) The existing  site diagrams for  Crawfordsville,  Indiana and
          Marshalltown,  Iowa,  attached to Exhibit A (Facilities) and Exhibit J
          (Bill of Sale),  and as also cross referenced in Exhibit M (Additional
          Excluded  Assets),  shall be amended to replace  them with the revised
          Site Diagrams  attached  hereto as Attachment B  (Crawfordsville)  and
          Attachment C (Marshalltown).

               (c)  Exhibit  A (List of  Assets)  of  Exhibit J (Form of Bill of
          Sale) is amended to add a new section XI as follows: "XI. Camp Houses.
          Two camp houses and all fixtures and  appurtenances  thereto  situated
          near Bodie's Boat Landing on the right descending bank of Little River
          on the Pollock  Lateral located on a parcel of land in Sections 38 and
          13, T 7-1 East of Grant Parish, Louisiana referred in:

          |    a certain deed (Bill of Sale) dated April 8, 1976,  passed before
               B.E. Montgomery, Notary Public; and,

          |    a certain Act of Partition in Reg. No. 116647, Bk 334, page 528.

          Notwithstanding  the  provisions of Section  4.01(q) of the Agreement,
          Seller  specifically  disclaims  any warranty of title with respect to
          the camp house  described  in the  previous  sentence  and Seller only
          conveys whatever interest it has in such House."

               (d)  Exhibits  A, J and M shall be amended  to add the  following
          asset to Exhibit M (Additional  Excluded Assets) and to delete it from
          Exhibit A (List of Assets) and Exhibit J (Form of Bill of Sale):  | In
          Section C (Tractors) of Vehicles and Other Rolling Stock:  Unit #11326
          1982 Case Model 1190 VIN#11034092

               (e) Exhibits A and J shall be amended to add one additional Level
          A Suit and SCBA unit at the Trilla, Illinois Facility as follows: | In
          Section Q, (Trilla,  Illinois Facility (delivery facility)),  it shall
          be modified to state: "Two (2) Level A Suits and SCBAs".

               (f) Exhibit B (Real Property)  attached to the Agreement shall be
          amended to add the items stated in Exhibit B-1.

               (g) Exhibit D (Property  Rights)  attached to the Agreement shall
          be amended to add the items stated in Exhibit D-1.

               (h)  Exhibit  E  (Permits)  attached  to the  Agreement  shall be
          amended to add the items stated in Exhibit E-1.

               (i)  Exhibit O is amended  and  replaced  in its  entirety as set
          forth in the "Revised Exhibit O", attached hereto.

               (j) Shedule  4.01(m) is amended and  replaced in its  entirety as
          set forth in the "Revised Schedule 4.01(m)", attached hereto.

               (k) Schedules 4.01(o)(i)(A) and 13.01 shall be amended to add the
          following  employee to Schedule  13.01  (Employees)  and to delete him
          from Schedule 4.01(o)(i)(A) (Exceptions to Employees):
<TABLE>
<CAPTION>

              ------------------------------ ------------------------------- ----------------------- -----------
<S>           <C>                            <C>                             <C>                     <C>
              Name                           Location                        Role                    Hire Date
              ------------------------------ ------------------------------- ----------------------- -----------
              ------------------------------ ------------------------------- ----------------------- -----------
              Gary Koegeboehm                Hermann                         Eng. Mgr.                1/14/91
              ------------------------------ ------------------------------- ----------------------- -----------
</TABLE>

     4. Revision to Article X of the Agreement. New Section 10.09 shall be added
to the Agreement as follows:

     "10.09 Seller's Indemnity for Development of Telecon Easement Rights. After
     the Effective Time, and to the fullest extent permitted by law, but subject
     to the other  provisions of this Article X, and except to the extent of the
     negligence,  gross  negligence  or  wilful  misconduct  of any of the Buyer
     Indemnitees,  KPL and KFS&T will jointly and severally  Indemnify the Buyer
     Indemnitees from and against any and all Liabilities/Claims arising from or
     in  connection  with or relating to (i) the fiber optic rights  existing on
     some or all of the Assets  pursuant to the  agreements  by and between KPL,
     Sea Breeze  Communications  Company and PF.Net Corp,  now known as Velocita
     Corp.,  (ii) any  exercise  of those  rights  or  (iii)  the  installation,
     operation,  or maintenance of any fiber optics cables or similar or related
     assets in  connection  with such rights  (collectively,  the "Fiber  Optics
     Issues")."

     5.Clarification  of  Thresholds,  Monetary Cap and  Survival.  It is hereby
acknowledged  and  agreed  by the  Parties  that  the new  Section  10.09 of the
Agreement,  as added above,  is subject to the Monetary Cap set forth in Section
10.04  of the  Agreement  and is  subject  to  the  two  (2)  year  survival  of
indemnifications  set forth in Section  10.05(b)  of the  Agreement,  but is not
subject to the Threshold set forth in Section 10.04.

     6.  Survey and  Granting of Metes and Bounds  Easements  on Seller and Koch
Nitrogen Company Owned Real Property.  As soon as practicable  after the Closing
Date,  but in any event  within one hundred  eighty (180) days after the Closing
Date, Buyer may construct, for use in connection with the Facilities and on real
property  owned  by  Seller  or Koch  Nitrogen  Company  ("KNC"),  such  control
buildings and related facilities as are reasonably  necessary in connection with
Buyer's  operation of the  Facilities  (the "New  Construction").  Seller hereby
grants to Buyer,  and agrees to cause KNC to grant to Buyer, the right for Buyer
and its  affiliates  and  subcontractors  and vendors to enter onto Seller's and
KNC's real  property and to construct  such  buildings  and  facilities  at such
locations  as  are  approved  by  Seller  and  Buyer,  such  approval  not to be
unreasonably withheld,  conditioned or delayed.  Within one hundred eighty (180)
days following the Closing Date or ninety (90) days after  completion of the New
Construction,  whichever is later,  Seller shall, at its cost, cause a survey of
the New  Construction  and the Facilities  conveyed to Buyer under the Agreement
which are located on real  property  owned by Seller or KNC and shall grant,  or
cause KNC to grant, a metes and bounds easement  suitable for recording for such
Facilities and New  Construction  substantially  in the form of Exhibit O. Buyer
will  exercise its rights  hereunder in such a manner so as to not  unreasonably
interfere with Seller's or KNC's operations. If and to the extent an easement is
granted pursuant to the terms of this Section 6 and another  easement  currently
exists  for all or a portion  of the said  property,  the  Parties  will cause a
termination and release of the then existing easement therefor.

     Buyer  agrees that its ingress and egress  pursuant to this Section 6 shall
be only  upon  prior  notice  to  Seller  (verbal  or  written),  and  shall not
unreasonably interfere with Seller's or KNC's ongoing operations. Upon obtaining
Seller's prior consent (which shall not be unreasonably withheld, conditioned or
delayed),  Buyer may also use as temporary  working space such parts of Seller's
and  KNC's  real  property  as  are  reasonably  necessary  to  conduct  Buyer's
activities in connection  with the New  Construction,  provided such land is not
occupied by substantial improvements.  Additionally,  all of Buyer's ingress and
egress to, and any  operations  on,  Seller's and KNC's real  property  shall be
conducted in compliance with all of Seller's and KNC's safety procedures,  rules
and  regulations  in effect at the property  location  from time to time,  which
shall  include site safety  training and access  restriction  procedures  as are
normally required by Seller or KNC of third party invitees.  Provided,  however,
that Seller will provide, and will cause KNC to provide,  Buyer immediate access
upon verbal  notice when  conditions  with respect to the New  Construction  are
threatening  or  causing  harm  to  persons  or  property  or a  release  of any
deleterious or harmful  substances  into the  environment.  Buyer further agrees
that the New Construction shall be designed, constructed, tested and operated in
accordance  with applicable  safety rules and  regulations  published by federal
and/or state  regulatory  agencies  having  jurisdiction.  If no such government
safety rules apply,  then applicable  industry  standards and practices shall be
complied with.

     Buyer agrees to  Indemnify  Seller and KNC,  their  related  companies  and
affiliates,  and their officers,  directors,  employees and agents (collectively
referred  to  hereinafter  as  "Indemnitees")  from  and  against  any  and  all
Liabilities/Claims  for damage to  property or the  environment  or injury to or
death of Persons to the extent such Liabilities/Claims result from, grow out of,
or arise in connection  with, the exercise by Buyer of any of the rights granted
under this Section 6, except to the extent that such  Liabilities/Claims  result
from   Indemnitees'   negligence,   gross  negligence  or  willful   misconduct.
Notwithstanding  the foregoing,  Buyer further  agrees to Indemnify  Indemnitees
from and against any and all Liabilities/Claims relating to personal injuries or
death suffered by Buyer or its contractors, or the employees or agents of any of
them,  during the  course of  performing  activities  hereunder,  regardless  of
whether  such  Liabilities/Claims  are  caused by or arise  out of  Indemnitees'
negligence as relating to either the physical conditions of the work site or any
failure to warn about any such physical conditions,  but excluding Claims to the
extent caused by any other type of Indemnitees' negligence,  gross negligence or
willful misconduct.

     Buyer  agrees  that,  after  commencing  construction  relating  to the New
Construction  or any portion  thereof,  Buyer will pursue the work diligently to
effect prompt completion of the New Construction, and following the construction
will restore the surface of the land affected by the New Construction, as nearly
as is practicable, to the condition in which it existed prior to construction.

     7. Trailer  Replacement.  A certain non-titled 1993 16' tandem axle trailer
(VIN  11YUC1926PT001285),  listed on both Exhibit A  (Facilities)  and Exhibit J
(Form of Bill of Sale) was  replaced in the ordinary  course of business  with a
2002 HH,  Model  HD252,  Trailer  (VIN #  4J6HD25262B038966),  which is a titled
vehicle.  Therefore,  this 1993 trailer is deleted from Exhibits A and J and the
replacement  2002 trailer is hereby added to Exhibit A, and title  thereto shall
be  conveyed  to Buyer by delivery of the  original  title  thereto  pursuant to
Section 9.01(a)(v) of the Agreement.

     8. Marshalltown,  Iowa Building. New Section 3.02(b)(vii) shall be added to
the Agreement as follows:


     "(vii) An amount equal to  $60,000.00,  which is the  mutually  agreed upon
     approximation  of one-half  (1/2) of the costs that Buyer and Seller expect
     Buyer  will  incur  for  the  construction  of a new 30' x 64'  post  frame
     office/shop  building on the Real Property which is conveyed to Buyer under
     the Agreement at  Marshalltown,  Iowa. The Parties agree that this downward
     adjustment  to  the  Purchase   price  shall  be  the  sole  and  exclusive
     consideration  due to  Buyer  for the  matters  addressed  in this  Section
     3.02(b)(vii)."

     9.  (a)  The  term  "Closing"  is  changed  to  "Effective  Time"  in   the
     following Sections of the Agreement:  2.01,  3.02(b)(iii),  4.01(x),  7.01,
     7.02(a),  7.02(b), 8.08, 9.02(a),  9.02(b),  9.03(a),  10.03(b),  10.03(d),
     14.06 and 14.10(a).

          (b) The term  "Closing  Date" is  changed to  "Effective  Time" in the
     following  Sections  of the  Agreement  :  9.02(a),  9.02(j),  9.03(a)  and
     9.03(b).

          (c) The term "at  Closing"  in  Section  3.01(a) of the  Agreement  is
     changed to "on November 1, 2002".


     10. Lis  Pendens.  Seller  covenants  and agrees  that it will use its best
efforts  to  remove,   promptly   after   Closing  and  to  Buyer's   reasonable
satisfaction,  the  existing lis pendens with respect to the Trilla Pump Station
and the Pana Pump  Station as  described  in item 3 of the Buyer's  title defect
letter to Seller  dated  September  24,  2002  (which  was sent by  Fulbright  &
Jaworski L.L.P., Buyer's counsel)(collectively, the "Lis Pendens"). Seller shall
Indemnify the Buyer Indemnitees from and against any and all  Liabilities/Claims
arising  from or  relating  to the Lis  Pendens  or any  enforcement  thereof or
collections  with respect thereto.  This Indemnity  obligation is not subject to
the Threshold or the Monetary Cap, and shall survive Closing without  limitation
as to time or amount.

     11.  Non-Recorded  Property  Right at  IMC-Agrico,  Taft,  LA. The  Parties
acknowledge  that there is a  non-recorded  Property  Right in the amount of 812
rods  across the  property  of  IMC-Agrico  at Taft LA, and have made a downward
adjustment to the Purchase Price in the amount of $64,960.00 ($80.00 x 812 rods)
pursuant to Section 3.02(b)(v) of the Agreement. Buyer agrees that this downward
adjustment to the Purchase  Price shall be the sole and exclusive  consideration
due to Buyer for this matter.  However,  if, following Closing,  Seller provides
Buyer with a Property Right suitable for recording with respect  thereto,  Buyer
shall promptly reimburse said amount.

     12.  Ratification of Agreement.  Except as expressly provided herein to the
contrary, the terms, covenants,  and conditions of the Agreement shall remain in
full force and effect without modification or amendment,  and the Parties hereto
ratify and reaffirm the same in its entirety.

     13.  Miscellaneous.  The  foregoing  Recitals  are  incorporated  herein by
reference and are made a part hereof.  The  provisions  of this First  Amendment
were  negotiated and shall be deemed to have been drafted by the Parties hereto.
This First  Amendment  shall be governed by and construed in accordance with the
laws of the State of Kansas, without regard to the conflicts of laws principles.
If the terms of the Agreement  conflict or are  inconsistent  with those of this
First Amendment, the terms of this First Amendment shall govern.

              THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.


     IN WITNESS  WHEREOF,  the duly  authorized  representatives  of the parties
hereto have executed this First Amendment as of the date first set forth above.

"Seller"                                                               "Seller"

<TABLE>
<CAPTION>

<S>                                                   <C>
Koch Pipeline Company, L.P.                           Koch Fertilizer Storage and Terminal Company
By:    Koch Pipeline Company, LLC,
         Its General Partner

By:                                                      By:
   ----------------------------                             ---------------------------------
      Pat McCann                                                  Jeffrey F. Wilson
      President                                                     Vice President
</TABLE>

"Buyer"

Kaneb Pipe Line Operating Partnership, L.P.
By:    Kaneb Pipe Line Company, LLC,
         Its General Partner


By:
   ----------------------------
        Jimmy L. Harrison
        President

Signature  page to that certain First  Amendment to the Asset  Purchase and Sale
Agreement by and among Koch Pipeline Company,  L.P. and Koch Fertilizer  Storage
and  Terminal  Company  (together,  "Seller")  and  Kaneb  Pipe  Line  Operating
Partnership, L.P. ("Buyer").