EX-10.7


 Exhibit 10.7 

TRANSPORTATION SERVICES SCHEDULE 

(Three Rivers Crude System) 

This Transportation Services Schedule (this “Schedule”) is entered into on the 1st day of July, 2014 (the “Effective Date”) by and between VALERO PARTNERS OPERATING CO. LLC, a Delaware limited liability company (“Carrier”), and
VALERO MARKETING AND SUPPLY COMPANY, a Delaware corporation (“Shipper”), pursuant to the Master Transportation Services Agreement (the “Agreement”) between Carrier and Shipper dated as of
December 16, 2013. Except as set forth herein, the terms and conditions of the Agreement are incorporated by reference into this Schedule. Unless otherwise defined in this Schedule, the defined terms in this Schedule will have the same meaning
used in the Agreement. 
 1. Term. This Schedule shall have a primary term commencing on the Effective Date and ending 10 years from the
Effective Date (the “Initial Term”), and may be renewed by Shipper, at Shipper’s sole option, for one successive 5 year renewal term (a “Renewal Term”), upon at least 180 Days’ written Notice
from Shipper to Carrier prior to the end of the Initial Term. The Initial Term and Renewal Term, if any, shall be referred to in this Schedule as the “Term”. 

2. Pipeline. The pipeline (the “Pipeline”) and related facilities (such facilities, together with the Pipeline, the
“Pipeline System”) covered by this Schedule is the 12” nominal diameter pipeline, that is approximately 0.61 miles in length and originates at (i) the inlet flange of Carrier’s crude oil unloading station, and
(ii) the inlet flange of connections to the Arrowhead Gathering Company LP pipeline, the Eagle Ford Pipeline LLC pipeline, and any other future connections (the “Origin Points”) and terminates at the outlet flange of
Carrier’s meter skid located within the fence line of the Refinery (as defined below) (the “Delivery Point”). 
 3.
Additional Pipelines. Carrier intends to construct two additional pipelines (each an “Additional Pipeline” and together the “Additional Pipelines”), which upon completion will also be
capable of delivering Product from the Origin Points to the Refinery. The Additional Pipelines shall be designed, engineered and constructed and equipped (i) in a good and workmanlike manner, (ii) in compliance with all applicable Laws,
and (iii) in accordance with generally accepted industry standards for crude oil pipelines. Once completed, the Additional Pipelines will have a design capacity for crude oil (including the Product) of not less than approximately 100,000
barrels of Product per Day, a portion of which such capacity shall be made available to Shipper pursuant to the terms hereof. Carrier will provide Shipper with written notice of the intended Commencement Date for each Additional Pipeline at least
fourteen (14) Business Days prior to the intended Commencement Date. Carrier will provide Customer with written confirmation of the actual Commencement Date if different from the intended Commencement Date. For purposes of this Agreement, the
term “Commencement Date” for each Additional Pipeline shall mean the first day following the date all of the following conditions have been satisfied: (a) Carrier has completed all necessary construction and testing of
the Additional Pipeline; (b) Carrier shall have received all approvals, certificates, permits and authorizations from all Governmental Entities necessary to operate the Additional Pipeline; (c) Carrier shall have acquired all necessary
easements for the Additional Pipeline, and (d) the Additional Pipelines are ready to commence commercial service with respect to the transportation of crude oil from the Carrier’s crude oil unloading station to the Refinery. Upon the
Commencement Date of each Additional Pipeline, such Additional Pipeline shall become a part of the Pipeline System and subject to the terms and conditions of the Agreement 






 
and this Schedule without any further action by the Parties. The Parties agree to execute any amendments or supplements to this Schedule if necessary to incorporate the Additional Pipelines
herein. 
 4. Refinery. The refinery that is supported by the Pipeline is Shipper’s Affiliate’s Three Rivers Refinery in Three
Rivers, Live Oak County, Texas (the “Refinery”). 
 5. Product. The products to be transported and shipped on the
Pipeline System under this Schedule (each, a “Product” and collectively, the “Products”) is crude petroleum. 

6. Specifications. Shipper will ensure that all of its Products tendered at the Origin Point for transportation on the Pipeline System meet the
applicable specifications for the Product as set forth on Exhibit A attached hereto and incorporated herein for all purposes, as the same may be amended, modified or supplemented from time to time (the
“Specifications”), provided that (i) Carrier provides Shipper with at least seven (7) days’ prior notice of any such amendment, modification or supplement, and (ii) the Product specifications and
properties comply with any specifications imposed by Law. 
 7. Transportation Rate. For transportation services on the Pipeline, Shipper
agrees to pay Carrier (i) $0.279 per Barrel of Product transported from any of the Origin Points to the Delivery Point on the Pipeline up to 70,000 average Barrels per Day of Product so delivered during any Month (“Tier 1
Rate”), and (ii) $0.050 per Barrel of Product transported from any of the Origin Points to any of the Delivery Points on the Pipeline for volumes in excess of 70,000 average Barrels per Day of Product so delivered during such Month
(the “Tier 2 Rate”), adjusted from time to time as provided in Section 10. The Tier 1 Rate and the Tier 2 Rate may be referred to collectively or individually as the “Transportation Rate”. For the avoidance of
doubt, to the extent any Quarterly Deficiency Payment is applied to any Quarterly Surplus Volumes (such volumes being referred to as “Pre-Paid Volumes”), the Transportation Rate for such Pre-Paid Volumes shall be the Tier 1
Rate for the Calendar Quarter in which such Quarterly Deficiency Payment was made. For each Month within a Calendar Quarter, the Transportation Rates applied to volumes tendered for such Month shall be based on a quarter-to-date calculation of the
Minimum Monthly Commitment, and the revenue billed for such Month shall be adjusted to reflect such quarter-to-date calculation. For purposes of this Section the term “Minimum Monthly Commitment” shall be 70,000 average
Barrels per Day multiplied by the number of days in the applicable Month. 
 8. Transportation Rate Adjustment for Additional Pipelines.
Beginning on the Commencement Date of the first of the two Additional Pipelines, the Tier 1 Rate, as may be adjusted pursuant to Section 10, shall be increased by the amount set forth on Exhibit B that corresponds to the
“Final Capital Outlay” (as set forth on Exhibit B) for the construction and installation of the Additional Pipelines as of the Commencement Date of the first of the two Additional Pipelines with the “Final Capital Outlay”
not to exceed $8,000,000. The Parties estimate that beginning on the Commencement Date of the first of the two Additional Pipelines, the Tier 1 Rate shall be increased by $0.032 per Barrel of Product which is based upon a “Final Capital
Outlay” of between $6,300,000 and $6,540,000 for the Additional Pipelines. Other than the adjustment to the Tier 1 Rate as set forth in this Section 8, there shall be no additional or separate throughput charges for transportation
services on the Additional Pipelines. Carrier agrees as part of its notice of the intended Commencement Date as set forth in Section 3 hereof, to provide Shipper with the actual amount of the total capital cost for the design, construction and
installation of the Additional Pipelines for which will form the basis for the increase to the Tier 1 Rate. 

  
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 9. Pipeline Throughput Commitment. During each Calendar Quarter pursuant to the terms and
conditions of this Schedule and the Tariff, Shipper shall tender at any of the Origin Points an aggregate average of at least 70,000 Barrels per Day of Product for transportation on the Pipeline System, in approximately ratable quantities (such
average, the “Minimum Quarterly Commitment”) to the Delivery Point and Carrier shall transport and ship or cause to be transported and shipped such Product on the Pipeline in accordance with the terms of this Schedule. Except
as expressly provided in the Agreement for an Outage, a Carrier Force Majeure or a Shipper Force Majeure, if during any Calendar Quarter, Shipper fails to meet its Minimum Quarterly Commitment during such Calendar Quarter, then Shipper will pay
Carrier a deficiency payment (each, a “Quarterly Deficiency Payment”) in an amount equal to the volume of the deficiency (the “Quarterly Deficiency Volume”) multiplied by the Transportation Rate in
effect for the relevant Calendar Quarter. The dollar amount of any Quarterly Deficiency Payment paid by Shipper may be applied as a credit against any amounts incurred by Shipper and owed to Carrier with respect to volumes of Product tendered at any
of the Origin Points in excess of the Shipper’s Minimum Quarterly Commitment (or, if this Schedule expires or is terminated, to volumes tendered to the Origin Points in excess of the applicable Minimum Quarterly Commitment in effect as of the
date of such expiration or termination) (such excess volume during any Calendar Quarter is referred to in this Section as the “Quarterly Surplus Volume”) during any of the succeeding four Calendar Quarters, after which time
any unused credits will expire. This Section 7 shall survive the expiration or termination of this Schedule, if necessary for the application of any Quarterly Deficiency Payment against any Quarterly Surplus Volume as set forth herein.
Carrier shall provide transportation services to Shipper in excess of the Minimum Quarterly Commitment on an “as available” basis, and any use of such excess capacity shall be subject to the Transportation Rate in effect at the time of the
tender. 
 10. Escalation. On July 1, 2015, and on July 1st of each year
thereafter while this Schedule is in effect, Carrier may, in its discretion, adjust the Transportation Rate, which adjustment shall be effective as of July 1st of the year in which such
election is made, in accordance with FERC’s indexing methodology. If FERC terminates its indexing methodology and does not adopt a new methodology, the Parties shall negotiate in good faith a methodology for adjusting the Transportation Rate
under this Schedule. 
 11. Nominations and Scheduling. Shipper shall furnish to Carrier, by the 20th Day of each Month preceding the Month of delivery (except for the first Month of the Term, which shall be on or before the 5th day of that
Month), a delivery schedule that includes the estimated quantity of Product that Shipper anticipates tendering for transportation on the Pipeline System during the following Month (“Nominated Deliveries”). 

12. Special Termination by Shipper. If Shipper or any of its Affiliates determines to completely or partially suspend refining operations at the
Refinery for a period of at least 12 consecutive Months, the Parties will negotiate in good faith to agree upon a reduction of the Minimum Quarterly Commitment to reflect such suspension of operations. If the Parties are unable to agree to an
appropriate reduction of the Minimum Quarterly Commitment, then after Shipper or such Affiliate has made a public announcement of such suspension, Shipper may provide written 

  
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Notice to Carrier of its intent to terminate this Schedule and this Schedule will terminate 12 Months following the date such Notice is delivered to Carrier. In the event Shipper or such
Affiliate publicly announces, prior to the expiration of such 12-Month period, its intent to resume operations at the Refinery, then such Notice shall be deemed revoked and this Schedule shall continue in full force and effect as if such Notice had
never been delivered. 
 13. Effect of Shipper Restructuring. If Shipper or any of its Affiliates determines to restructure its respective
supply, refining or sales operations at the Refinery in such a way as could reasonably be expected to materially and adversely affect the economics of Shipper’s performance of its obligations under this Schedule, then the Parties will negotiate
in good faith an alternative arrangement that is no worse economically for Carrier than the economic benefits to be received by Carrier under this Schedule, which may include the substitution of new commitments of Shipper on other assets owned or to
be acquired or constructed by Carrier. 
 14. Audit. Carrier will retain its books and records related to the capital costs and its pre-tax
rate of return on the Additional Pipelines for a period of two (2) years from the Commencement Date. Shipper may audit such books and records at Carrier’s offices where such books and records are stored upon not less than ten
(10) days prior written notice. Any such audit will be at Shipper’s expense and will take place during Pipeline Carrier’s business hours. 

15. Contacts and Notices.  
 (a)
For Carrier. The following contacts and their respective subject matter expertise are provided for convenience purposes only. All formal notices and communication required under this Schedule to Carrier shall be in writing and delivered as
set forth in the Agreement: 
  

			
	Operational:	  	Sr Mgr Area Pipeline &Terminals
		  	Tel: (361) 289-3226
		  	Fax: (361) 299-3546
		
	Invoice:	  	Troy Heard, Supervisor Accounting
		  	Tel: (210) 345-3219
		  	Fax: (210) 370-4355

 (b) For Shipper: The following contacts and their respective subject matter expertise are provided for
convenience purposes only. All formal notices and communication required under this Schedule to Shipper shall be in writing and delivered as set forth in the Agreement: 
  

			
	Operational:	  	Len Rucinski,
		  	Sr Mgr Crude Supply and Trading
		  	Tel: (210)-345-2381
		  	Fax: (210)-370-5161


  
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	Invoice:	  	Troy Heard, Supervisor Accounting
		  	Tel: (210) 345-3219
		  	Fax: (210) 370-4355


  
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 IN WITNESS WHEREOF, the Parties hereto have caused this Schedule to be duly executed by
their respective authorized officers. 
  

			
	Carrier:
	
	VALERO PARTNERS OPERATING CO. LLC
		
	By:	 	 /s/ Richard F. Lashway

	Name:	 	Richard F. Lashway
	Title:	 	President and Chief Operating Officer
	
	Shipper:
	
	VALERO MARKETING AND SUPPLY COMPANY
		
	By:	 	 /s/ Gary K. Simmons

	Name:	 	 Gary K. Simmons

	Title:	 	Senior Vice President


 Signature Page to Transportation Services Schedule (Three Rivers Crude System) 






 EXHIBIT A 

SPECIFICATIONS 
 Specification through the
Pipeline System is crude petroleum, defined as direct liquid products of oil wells, condensates or a mixture thereof that conforms to meet all regulatory emission requirements at the pipeline origin and destination 

  
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 EXHIBIT B 

FINAL CAPITAL OUTLAY 
  

									
	 Final Capital Outlay (in millions)
	 	  	Increase to
Tier 1 Rate	 
	 Greater Than
	  	Less Than	 	  
	$4.880	  	$	5.000	  	  	$	0.0250	  
	$5.000	  	$	5.120	  	  	$	0.0260	  
	$5.120	  	$	5.350	  	  	$	0.0270	  
	$5.350	  	$	5.590	  	  	$	0.0280	  
	$5.590	  	$	5.830	  	  	$	0.0290	  
	$5.830	  	$	6.060	  	  	$	0.0300	  
	$6.060	  	$	6.300	  	  	$	0.0310	  
	$6.300	  	$	6.540	  	  	$	0.0320	  
	$6.540	  	$	6.770	  	  	$	0.0330	  
	$6.770	  	$	7.010	  	  	$	0.0340	  
	$7.010	  	$	7.250	  	  	$	0.0350	  
	$7.250	  	$	7.480	  	  	$	0.0360	  
	$7.480	  	$	7.720	  	  	$	0.0370	  
	$7.720	  	$	7.960	  	  	$	0.0380	  
	$7.960	  	$	8.000	  	  	$	0.0390	  


  
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