Exhibit 3.7

Execution Copy

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SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

PACIFIC ENERGY GROUP LLC

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TABLE OF CONTENTS

|                                                          |  |                                                                       |  |   
|--------------------------------------------------------- |  | --------------------------------------------------------------------- |  | --
|ARTICLE I
DEFINITIONS                                    
|Section 1.1                                               |  | Definitions.                                                          |  | 2 
|Section 1.2                                               |  | Construction.                                                         |  | 6 
|ARTICLE II
ORGANIZATION                                  
|Section 2.1                                               |  | Formation.                                                            |  | 6 
|Section 2.2                                               |  | Name.                                                                 |  | 7 
|Section 2.3                                               |  | Registered Office; Registered Agent; Principal Office; Other Offices. |  | 7 
|Section 2.4                                               |  | Purpose and Business.                                                 |  | 7 
|Section 2.5                                               |  | Powers.                                                               |  | 7 
|Section 2.6                                               |  | Power of Attorney.                                                    |  | 8 
|Section 2.7                                               |  | Term.                                                                 |  | 9 
|Section 2.8                                               |  | Title to Company Assets.                                              |  | 9 
|ARTICLE III
RIGHTS OF MEMBERS                            
|Section 3.1                                               |  | Limitation of Liability.                                              |  | 9 
|Section 3.2                                               |  | Outside Activities of the Members.                                    |  | 9 
|Section 3.3                                               |  | Rights of Members.                                                    |  | 9 
|ARTICLE IV
TRANSFERS OF INTERESTS                        
|Section 4.1                                               |  | Transfer Generally.                                                   |  | 10
|Section 4.2                                               |  | Transfer of Membership Interests.                                     |  | 10
|Section 4.3                                               |  | Restrictions on Transfers.                                            |  | 10
|ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS
|Section 5.1                                               |  | Prior to Closing Date.                                                |  | 11
|Section 5.2                                               |  | Contributions at Closing.                                             |  | 11
|Section 5.3                                               |  | Additional Capital Contributions.                                     |  | 12
|Section 5.4                                               |  | Interest and Withdrawal.                                              |  | 12
|Section 5.5                                               |  | Loans from Members.                                                   |  | 12
|Section 5.6                                               |  | Issuances of Additional Company Securities.                           |  | 12
|Section 5.7                                               |  | Limited Preemptive Rights.                                            |  | 13
|Section 5.8                                               |  | Fully Paid and Non-Assessable Nature of Membership Interests.         |  | 13
|ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS                 
|Section 6.1                                               |  | Allocations.                                                          |  | 13
|Section 6.2                                               |  | Distributions.                                                        |  | 13
|ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS         
|Section 7.1                                               |  | Management.                                                           |  | 14
|Section 7.2                                               |  | Certificate of Formation.                                             |  | 15
|Section 7.3                                               |  | Restrictions on Managing Member's Authority.                          |  | 16

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|Section 7.4                                       |  | Reimbursement of the General Partner; Benefit Plans.                                                |  | 16
|------------------------------------------------- |  | --------------------------------------------------------------------------------------------------- |  | --
|Section 7.5                                       |  | Outside Activities.                                                                                 |  | 16
|Section 7.6                                       |  | Loans from the General Partner; Loans or Contributions from the Company; Contracts with Affiliates. |  | 17
|Section 7.7                                       |  | Indemnification.                                                                                    |  | 18
|Section 7.8                                       |  | Liability of Indemnitees.                                                                           |  | 19
|Section 7.9                                       |  | Resolution of Conflicts of Interest.                                                                |  | 20
|Section 7.10                                      |  | Other Matters Concerning the Managing Member.                                                       |  | 21
|Section 7.11                                      |  | Reliance by Third Parties.                                                                          |  | 22
|ARTICLE VIII
OFFICERS                            
|Section 8.1                                       |  | Officers.                                                                                           |  | 22
|Section 8.2                                       |  | Compensation.                                                                                       |  | 24
|ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
|Section 9.1                                       |  | Records and Accounting                                                                              |  | 24
|Section 9.2                                       |  | Fiscal Year.                                                                                        |  | 24
|ARTICLE X
TAX MATTERS                            
|Section 10.1                                      |  | Tax Returns and Information.                                                                        |  | 25
|Section 10.2                                      |  | Tax Elections.                                                                                      |  | 25
|ARTICLE XI
ADMISSION OF MEMBERS                  
|Section 11.1                                      |  | Admission of MLP.                                                                                   |  | 25
|Section 11.2                                      |  | Admission of Substituted Members.                                                                   |  | 25
|Section 11.3                                      |  | Admission of Additional Members.                                                                    |  | 25
|Section 11.4                                      |  | Amendment of Agreement and Certificate of Formation.                                                |  | 26
|ARTICLE XII
WITHDRAWAL OF MEMBERS                
|Section 12.1                                      |  | Withdrawal of Members.                                                                              |  | 26
|ARTICLE XIII
DISSOLUTION AND LIQUIDATION         
|Section 13.1                                      |  | Dissolution.                                                                                        |  | 26
|Section 13.2                                      |  | Liquidator.                                                                                         |  | 26
|Section 13.3                                      |  | Liquidation.                                                                                        |  | 27
|Section 13.4                                      |  | Cancellation of Certificate of Formation.                                                           |  | 27
|Section 13.5                                      |  | Return of Capital Contributions.                                                                    |  | 28
|Section 13.6                                      |  | Waiver of Partition.                                                                                |  | 28
|Section 13.7                                      |  | Capital Account Restoration.                                                                        |  | 28
|ARTICLE XIV
AMENDMENT OF AGREEMENT               
|Section 14.1                                      |  | Amendment to be Adopted Solely by the Managing Member.                                              |  | 28
|Section 14.2                                      |  | Amendment Procedures.                                                                               |  | 29
|ARTICLE XV
Merger                                
|Section 15.1                                      |  | Authority.                                                                                          |  | 29

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|Section 15.2                   |  | Procedure for Merger or Consolidation.          |  | 29
|------------------------------ |  | ----------------------------------------------- |  | --
|Section 15.3                   |  | Approval by Members of Merger or Consolidation. |  | 30
|Section 15.4                   |  | Certificate of Merger.                          |  | 31
|Section 15.5                   |  | Effect of Merger.                               |  | 31
|ARTICLE XVI
GENERAL PROVISIONS
|Section 16.1                   |  | Addresses and Notices.                          |  | 31
|Section 16.2                   |  | Further Action.                                 |  | 31
|Section 16.3                   |  | Binding Effect.                                 |  | 32
|Section 16.4                   |  | Integration.                                    |  | 32
|Section 16.5                   |  | Creditors.                                      |  | 32
|Section 16.6                   |  | Waiver.                                         |  | 32
|Section 16.7                   |  | Counterparts.                                   |  | 32
|Section 16.8                   |  | Applicable Law.                                 |  | 32
|Section 16.9                   |  | Invalidity of Provisions.                       |  | 32
|Section 16.10                  |  | Consent of Members.                             |  | 32

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SECOND AMENDED AND RESTATED  LIMITED LIABILTY COMPANY AGREEMENT  OF  PACIFIC ENERGY GROUP LLC

THIS SECOND AMENDED AND RESTATED LIMITED LIABILTY COMPANY AGREEMENT OF PACIFIC ENERGY GROUP LLC (the "Company"),
dated as of July 26, 2002, is entered into by Pacific Energy Partners, L.P., a Delaware limited partnership ("MLP"), as sole Member of the
Company.

R E C I T A L S:

WHEREAS, PPS Holding Company ("Holding") entered into an operating agreement dated
effective as of August 1, 2001 for the purpose of forming the Company as a limited liability company under the Delaware Limited Liability Company Act and filed a Certificate of Formation with
the Secretary of State of the State of Delaware effective as of August 3, 2001.

WHEREAS, on the Closing Date,

1.    Holding
contributes its 100% Membership Interest to Pacific Energy GP, Inc. (the "General Partner");

2.    The
General Partner then contributes its 100% Membership Interest to the MLP in exchange for (a) a continuation of its 2% general partner interest in the MLP,
(b) the issuance of Incentive Distribution Rights, as defined in the MLP Agreement, (c) a 57.7% limited partner interest in the MLP and (d) the right to receive $104,178,000 of
proceeds from the Term Loan (as defined below);

3.    The
Initial Public Offering will be consummated pursuant to which the public, through the Underwriters, will contribute $167,700,000 ($155,961,000, net of Underwriters'
fees and commissions of $11,739,000) to the MLP in exchange for a 40.3% limited partner interest in the MLP;

4.    The
Company will borrow (a) $138,000,000 under the Term Loan, (b) pay certain fees and expenses relating to the Credit Facility, (c) contribute
$4,933,000 to Ranch Pipeline LLC, a Delaware limited liability company ("Frontier LLC") and (d) distribute $104,178,000 to the MLP;

5.    The
MLP will (a) pay transaction expenses of approximately $4,200,000 in connection with the Initial Public Offering and (b) contribute $151,761,000 to the
Company;

6.    The
Company will use $151,761,000 received from the proceeds of the Initial Public Offering and $24,639,000 received from the Term Loan to purchase from Citibank a note
made by Pacific Pipeline System LLC in favor of Citibank in the amount of $176,400,000;

7.    Frontier
LLC will retire $4,933,000 of its debt; and

8.    The
MLP will distribute $104,178,000 to the General Partner.

WHEREAS, the MLP now desires to execute this amended and restated Limited Liability Company Agreement in connection with the Initial
Public Offering to reflect contributions to the Company and certain other matters.

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NOW THEREFORE, in consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby enter into this
Agreement:

ARTICLE I  DEFINITIONS

Section 1.1Definitions.

The
following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement. Capitalized terms used herein but
not otherwise defined shall have the meaning assigned to such term in the MLP Agreement.

"Act"means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended,
supplemented or restated from time to time, and any successor to such statute.

"Additional Member" means a Person admitted to the Company as a Member pursuant to Section 11.3 and who is shown as such on the
books and records of the Company.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

"Agreement" means this Second Amended and Restated Limited Liability Company Agreement of Pacific Energy Group LLC, as it may be amended,
supplemented or restated from time to time. The Agreement shall constitute a "limited liability company agreement" as such term is defined in the Act.

"Assignee" means a Person to whom one or more Membership Interests have been transferred in a manner permitted under this Agreement, but
who has not been admitted as a Substituted Member.

"Associate" means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person
is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such
Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of
such spouse, who has the same principal residence as such Person.

"Available Cash" means, with respect to any Quarter ending prior to the Liquidation Date,



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Notwithstanding
the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.

"Business Day" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United
States of America or the state of California shall not be regarded as a Business Day.

"Capital Contribution" means any cash, cash equivalents or the value of Contributed Property that a Member contributes to the Company
pursuant to this Agreement or the Contribution and Conveyance Agreement.

"Certificate of Formation" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware as
referenced in Section 2.1, as such Certificate of Formation may be amended, supplemented or restated from time to time.

"Citibank"means Citibank, N.A.

"Closing Date" means the first date on which Common Units are sold by the MLP to the Underwriters pursuant to the provisions of the
Underwriting Agreement.

"Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding provision of successor law.

"Commission" means the United States Securities and Exchange Commission.

"Common Unit" has the meaning assigned to such term in the MLP Agreement.

"Company" means Pacific Energy Group LLC, a Delaware limited liability company, and any successors thereto.

"Company Group" means the Company and any Subsidiary of the Company, treated as a single consolidated entity.

"Company Security" means any class or series of membership interest in the Company.

"Conflicts Committee" has the meaning assigned to such term in the MLP Agreement.

"Contributed Property" means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed to
the Company.

"Contribution and Conveyance Agreement" means the Contribution and Conveyance Agreement, dated the Closing Date, among the Company, the
MLP, the General Partner and certain other partiers named therein, together with any additional documents and instruments contemplated or referenced thereunder.

"Credit Agreement" means the Credit Agreement, dated July 19, 2002, among the Company, as borrower, and a syndicate of financial
institutions led by Fleet National Bank.

"Credit Facility" means the $200,000,000 senior secured revolving credit facility as part of the Credit Agreement.

"Frontier LLC" has the meaning assigned to such term in the recitals.

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"General Partner"means Pacific Energy GP, Inc., a Delaware corporation and its successors and permitted assigns as general partner
of the MLP.

"Group Member" means a member of the Company Group.

"Holding" means PPS Holding Company, a Delaware corporation.

"Indemnitee" means (a) the Managing Member, (b) any Person who is or was a member, partner, director, officer, employee,
agent or trustee of any Group Member, the MLP, the General Partner or any of their respective Affiliates and (c) any Person who is or was serving at the request of the Managing Member as a
member, partner, director, officer, employee, partner, agent, fiduciary or trustee of another Person, in each case, acting in such capacity,provided,
that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services.

"Initial Public Offering" means the initial offering and sale of Common Units to the public, as described in the Registration Statement.

"Liquidation Date" means the date on which any event giving rise to the dissolution of the Company occurs.

"Liquidator" means one or more Persons selected by the Managing Member to perform the functions described in Section 13.2 as
liquidating trustee of the Company within the meaning of the Act.

"Managing Member" means Pacific Energy Partners, L.P. and its predecessors, successors and permitted assigns as managing member of the
Company.

"Member" means any Person that is admitted to the Company as a member pursuant to the terms and conditions of this Agreement; but the term
Member shall not include any Person from and after the time such Person withdraws as a Member from the Company.

"Membership Interest" means the ownership interest of a Member in the Company.

"Merger Agreement" has the meaning assigned to such term in Section 15.1.

"Minimum Quarterly Distribution" has the meaning assigned to such term in the MLP Agreement.

"MLP" has the meaning assigned to such term in the recitals.

"MLP Agreement" means the First Amended and Restated Agreement of Limited Partnership of Pacific Energy Partners, L.P., as it may be
amended, supplemented or restated from time to time.

"MLP Security" has the meaning assigned to the term "Partnership Security" in the MLP Agreement.

"National Securities Exchange" has the meaning assigned to such term in the MLP Agreement.

"Omnibus Agreement" means the Omnibus Agreement, dated the Closing Date, among the Company, the MLP, the General Partner and certain other
parties named therein, together with any additional documents and instruments contemplated or referenced thereunder.

"Opinion of Counsel" means a written opinion of counsel (which may be regular counsel to the Company or the MLP or any of their respective
Affiliates) acceptable to the Managing Member in its reasonable discretion.

"Pacific Marketing and Transportation LLC" means Pacific Marketing and Transportation LLC, a Delaware limited liability company.

"Pacific Pipeline System LLC" means Pacific Pipeline System LLC, a Delaware limited liability company.

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"Percentage Interest" means the percentage interest in the Company held by each Member upon completion of the transactions in
Section 5.2 and shall mean, as to the MLP, 100%.

"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.

"Pro Rata" means, when modifying Members and Assignees, apportioned among all Members and Assignees in accordance with their relative
Percentage Interests.

"Quarter" means, unless the context requires otherwise, a fiscal quarter of the Company.

"Registration Statement" means the Registration Statement on Form S-1 (Registration No. 333-84812)
as it has been or as it may be amended or supplemented from time to time, filed by the MLP with the Commission under the Securities Act to register the offering and sale of the Common Units in the
Initial Offering.

"Restricted Business" has the meaning assigned to such term in the Omnibus Agreement.

"Securities Act" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such
statute.

"Special Approval" has the meaning assigned to such term in the MLP Agreement.

"Subordinated Unit" has the meaning assigned to such term in the MLP Agreement.

"Subordination Period" has the meaning assigned to such term in the MLP Agreement.

"Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of
the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or
(c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.

"Substituted Member" means a Person who is admitted as a Member to the Company pursuant to Section 11.2 in place of and with all
the rights of a Member and who is shown as a Member on the books and records of the Company.

"Surviving Business Entity" has the meaning assigned to such term in Section 15.2(b).

"Term Loan"means the $225,000,000 senior secured term loan as part of the Credit Agreement.

"Transfer" has the meaning assigned to such term in Section 4.1(a).

"Underwriter" means each Person named as an underwriter in the Underwriting Agreement who purchases Common Units pursuant thereto.

"Underwriting Agreement" means, collectively, the Underwriting Agreement dated July 22, 2002 among the Company, the MLP, the
General Partner, the Underwriters and certain other parties named therein, providing for the purchase of Common Units by such Underwriters.

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"Unit" has the meaning assigned to such term in the MLP Agreement.

"Unit Majority" has the meaning assigned to such term in the MLP Agreement.

"U.S. GAAP" means United States Generally Accepted Accounting Principles consistently applied.

"Working Capital Borrowings" has the meaning assigned to such term in the MLP Agreement.

Section 1.2Construction.

Unless
the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns,
pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term "include" or
"includes" means includes, without limitation, and "including" means including, without limitation.

ARTICLE II  ORGANIZATION

Section 2.1Formation.



Following
the contribution of membership interests in the Company by the General Partner, 100% of the Membership Interests are held by the MLP.

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Section 2.2Name.

The
name of the Company shall be "Pacific Energy Group LLC". The Company's business may be conducted under any other name or names deemed necessary or appropriate by the Managing Member
in its sole discretion, including, if consented to by the Managing Member, the name of the MLP. The words "Limited Liability Company," "L.L.C." or "LLC" or similar words or letters shall be included
in the Company's name where necessary for the purpose of complying with the laws of any jurisdiction
that so requires. The Managing Member in its discretion may change the name of the Company at any time and from time to time and shall notify the other Member(s) of such change in the next regular
communication to the Members.

Section 2.3Registered Office; Registered Agent; Principal Office; Other Offices.

Unless
and until changed by the Managing Member, the registered office of the Company in the State of Delaware shall be located at 1209 Orange Street, New Castle County, Wilmington,
Delaware 19801, and the registered agent for service of process on the Company in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the
Company shall be located at 5900 Cherry Avenue, Long Beach, California 90805-4408, or such other place as the Managing Member may from time to time designate by notice to the Members. The
Company may maintain offices at such other place or places within or outside the State of Delaware as the Managing Member deems necessary or appropriate.

Section 2.4Purpose and Business.

The
purpose and nature of the business to be conducted by the Company shall be to (a) manage, operate, lease, sell and otherwise deal with any and all assets or properties
contributed to the Company by the Members or hereafter acquired by the Company, (b) serve as the sole member or stockholder of its Subsidiaries and, in connection therewith, to exercise all the
rights and powers conferred upon the Company as the sole member or stockholder of such Subsidiaries pursuant to the operating agreements or charter documents of each of such Subsidiaries,
(c) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any type of business activity
engaged in by the Company and its Subsidiaries and their predecessors prior to the Closing Date and, in connection therewith, to exercise all of the rights and powers conferred upon the Company
pursuant to the agreements relating to such business activity, (d) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any business activity that is approved by the Managing Member and which lawfully may be conducted by a limited liability company organized pursuant to the Act and,
in connection therewith, to exercise all of the rights and powers conferred upon the Company pursuant to the agreements relating to such business activity, and (e) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or loans to a Group Member, the MLP or any Subsidiary thereof; provided, however, in the case of (c) and
(d) above, that the Managing Member reasonably determines, as of the date of the acquisition or commencement of such activity, that such activity (i) generates "qualifying income" (as
such term is defined pursuant to Section 7704 of the Code) or (ii) enhances the operations of an activity of the Company or the MLP that generates qualifying income. The Managing Member
has no obligation or duty to the Company, the Members, or the Assignees to propose or approve, and in its discretion may decline to propose or approve, the conduct by the Company of any business.

Section 2.5Powers.

The
Company shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the
purposes and business described in Section 2.4 and for the protection and benefit of the Company.

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Section 2.6Power of Attorney.



Nothing
contained in this Section 2.6(a) shall be construed as authorizing the Managing Member to amend this Agreement except in accordance with Article XIV or as may be
otherwise expressly provided for in this Agreement.



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Section 2.7Term.

The
term of the Company commenced upon the filing of the Certificate of Formation in accordance with the Act and shall continue in existence in perpetuity or until the earlier
dissolution of the Company in accordance with the provisions of Article XIII. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of
Formation as provided in the Act.

Section 2.8Title to Company Assets.

Title
to Company assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Company as an entity, and no Member, individually or
collectively, shall have any ownership interest in such Company assets or any portion thereof.

ARTICLE III  RIGHTS OF MEMBERS

Section 3.1Limitation of Liability.

The
Members shall have no liability under this Agreement except as expressly provided in this Agreement or in the Act.

Section 3.2Outside Activities of the Members.

Subject
to the provisions of Section 7.5 and the Omnibus Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons
shall also be Members or Assignees, any Member or Assignee shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Company,
including business interests and activities in direct competition with the Company Group. Neither the Company nor any other Member or Assignee shall have any rights by virtue of this Agreement in any
business ventures of any Member or Assignee.

Section 3.3Rights of Members.



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ARTICLE IV  TRANSFERS OF INTERESTS

Section 4.1Transfer Generally.



Section 4.2Transfer of Membership Interests.

A
Member may transfer all, but not less than all, of its Membership Interest in connection with the merger, consolidation or other combination of such Member with or into any other
Person or the transfer by such Member of all or substantially all of its assets to another Person, and following any such transfer such Person may become a Substituted Member pursuant to
Article XI. Except as set forth in the immediately preceding sentence and in Section 5.2, or in connection with any pledge of (or any related foreclosure on) a Member's Membership
Interest solely for the purpose of securing, directly or indirectly, indebtedness of the Company, the MLP or such Member, and except for the transfers contemplated by Sections 5.2 and 11.1, a Member
may not transfer all or any part of its Membership Interest or withdraw from the Company.

Section 4.3Restrictions on Transfers.



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ARTICLE V  CAPITAL CONTRIBUTIONS AND ISSUANCE OF INTERESTS

Section 5.1Prior to Closing Date.



Section 5.2Contributions at Closing.



Following
the foregoing transactions, and by execution of this Agreement, the MLP shall hold 100% of the Membership Interests.

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Section 5.3Additional Capital Contributions.

With
the consent of the Managing Member, any Member may, but shall not be obligated to, make additional Capital Contributions to the Company.

Section 5.4Interest and Withdrawal.

No
interest shall be paid by the Company on Capital Contributions. No Member or Assignee shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent,
if any, that distributions made pursuant to this Agreement or upon termination of the Company may be considered as such by law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Member or Assignee shall have priority over any other Member or Assignee either as to the return of Capital Contributions or as to profits, losses or
distributions. Any such return shall be a compromise to which all Members or Assignees agree within the meaning of Section 18-502(b) of the Act.

Section 5.5Loans from Members.

Loans
by a Member to the Company shall not constitute Capital Contributions. If any Member shall advance funds to the Company in excess of the amounts required hereunder to be
contributed by it to the capital of the Company, the making of such excess advances shall not result in any increase in the amount of the Capital Account of such Member. The amount of any such excess
advances shall be a debt obligation of the Company to such Member and shall be payable or collectible only out of the Company assets in accordance with the terms and conditions upon which such
advances are made.

Section 5.6Issuances of Additional Company Securities.



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directed to do all things it deems necessary or advisable in connection with any future issuance of Company Securities, including compliance with any statute, rule, regulation or guideline of any
federal, state or other governmental agency.

Section 5.7Limited Preemptive Rights.

No
Person shall have preemptive, preferential or other similar rights with respect to (a) additional Capital Contributions; (b) issuance or sale of any class or series of
Membership Interests, whether unissued, held in the treasury or hereafter created; (c) issuance of any obligations, evidences of indebtedness or other securities of the Company convertible into
or exchangeable for, or carrying or accompanied by any rights to receive, purchase or subscribe to, any such Membership Interests; (d) issuance of any right of subscription to or right to
receive, or any warrant or option for the purchase of, any such Membership Interests; or (e) issuance or sale of any other securities that may be issued or sold by the Company.

Section 5.8Fully Paid and Non-Assessable Nature of Membership Interests.

All
Membership Interests issued pursuant to, and in accordance with the requirements of this Article V shall be fully paid and non-assessable Membership Interests,
except as such non-assessability may be affected by Section 18-607 of the Act.

ARTICLE VI  ALLOCATIONS AND DISTRIBUTIONS

Section 6.1Allocations.

All
income, gain, loss, deductions and items of income shall be allocated to the Members in proportion to their ownership of the Membership Interests unless otherwise required by the
Code.

Section 6.2Distributions.



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ARTICLE VII  MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1Management.



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Section 7.2Certificate of Formation.

Holding
caused the Certificate of Formation to be filed with the Secretary of State of the State of Delaware as required by the Act and certain other certificates or documents it
determined in its sole discretion to be necessary or appropriate for the qualification and operation of the Company in certain other states. The Managing Member shall use all reasonable efforts to
cause to be filed such additional certificates or documents as may be determined by the Managing Member in its sole discretion to be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited liability company in the State of Delaware or any other state in which the Company may elect to do business or own property. To the extent that
such action is determined by the Managing Member in its sole discretion to be reasonable and necessary or appropriate, the Managing Member shall file amendments to and restatements of the Certificate
of Formation and do all things to maintain the Company as a limited liability company under the laws of the State of Delaware or of any other state in which the Company may elect to do business or own
property. Subject to the terms of Section 3.3(a), the Managing Member shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Formation, any qualification
document or any amendments thereto to any Member or Assignee.

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Section 7.3Restrictions on Managing Member's Authority.



Section 7.4Reimbursement of the General Partner; Benefit Plans.



Section 7.5Outside Activities.



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Section 7.6Loans from the General Partner; Loans or Contributions from the Company; Contracts with Affiliates.



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Section 7.7Indemnification.



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Section 7.8Liability of Indemnitees.



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Section 7.9Resolution of Conflicts of Interest.



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Section 7.10Other Matters Concerning the Managing Member.



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Section 7.11Reliance by Third Parties.

Notwithstanding
anything to the contrary in this Agreement, any Person dealing with the Company shall be entitled to assume that the Managing Member and any Officer authorized by the
Managing Member to act on behalf of and in the name of the Company has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Company and to enter into any
authorized contracts on behalf of the Company, and such Person shall be entitled to deal with the Managing Member or any such Officer as if it were the Company's sole party in interest, both legally
and beneficially. Each Member hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the Managing Member or any
such officer in connection with any such dealing. In no event shall any Person dealing with the Managing Member or any such officer or its representatives be obligated to ascertain that the terms of
the Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the Managing Member or any such officer or its representatives. Each and every certificate,
document or other instrument executed on behalf of the Company by the Managing Member or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming
thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (b) the Person executing and
delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Company and (c) such certificate, document or instrument was duly
executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Company.

ARTICLE VIII  OFFICERS

Section 8.1Officers.



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Douglas L. Polson

ChairmanIrvin Toole, Jr.

President and Chief Executive OfficerDavid E. Wright

Executive Vice PresidentArthur G. Diefenbach

Vice PresidentOperationsLynn T. Wood

Vice President and SecretaryThomas G. Kundert

Treasurer




Section 8.2Compensation.

The
Officers shall receive such compensation for their services as may be designated by the Managing Member. In addition, the Officers shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of their service hereunder.

ARTICLE IX  BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1Records and Accounting

The
Managing Member shall keep or cause to be kept at the principal office of the Company appropriate books and records with respect to the Company's business, including all books and
records necessary to provide to the Members any information required to be provided pursuant to Section 3.4(a). Any books and records maintained by or on behalf of the Company in the regular
course of its business, including books of account and records of Company proceedings, may be kept on, or be in the form of, computer disks, hard drives, punch cards, magnetic tape, photographs,
micrographics or any other information storage device;provided, that the books and records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Company shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S. GAAP.

Section 9.2Fiscal Year.

The
fiscal year of the Company shall be a fiscal year ending December 31.

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ARTICLE X  TAX MATTERS

Section 10.1Tax Returns and Information.

The
Company shall timely file all returns of the Company that are required for federal, state and local income tax purposes on the basis of the accrual method and a taxable year ending
on December 31. The tax information reasonably required by the Members for federal and state income tax reporting purposes with respect to a taxable year shall be furnished to them within
90 days of the close of the calendar year in which the Company's taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall
be on the accrual method of accounting for federal income tax purposes.

Section 10.2Tax Elections.



ARTICLE XI  ADMISSION OF MEMBERS

Section 11.1Admission of MLP.

Upon
the consummation of the transfers and conveyances described in Section 5.1, the MLP was admitted as a Member and the MLP is now the only Member of the Company.

Section 11.2Admission of Substituted Members.

By
transfer of a Membership Interest in accordance with Article IV, the transferor shall be deemed to have given the transferee the right to seek admission as a Substituted Member
subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a Membership Interest shall,
however, only have the authority to convey to a purchaser or other transferee (a) the right to negotiate such Membership Interest to a purchaser or other transferee and (b) the right to
request admission as a Substituted Member to such purchaser or other transferee in respect of the transferred Membership Interests. Each transferee of a Membership Interest shall be an Assignee and be
deemed to have applied to become a Substituted Member with respect to the Interests so transferred to such Person. Such Assignee shall become a Substituted Member (x) at such time as the
Members consent thereto, which consent may be given or withheld in the Members' discretion, and (y) when any such admission is shown on the books and records of the Company. If such consent is
withheld, such transferee shall remain an Assignee. An Assignee shall have an interest in the Company equivalent to that of a Member with respect to allocations and distributions, including
liquidating distributions, of the Company. With respect to voting rights attributable to Membership Interests that are held by Assignees, the Managing Member shall be deemed to be the Member with
respect thereto and shall, in exercising the voting rights in respect of such Interests on any matter, vote such Membership Interests at the written direction of the Assignee. If no such written
direction is received, such Membership Interests will not be voted. An Assignee shall have no other rights of a Member.

Section 11.3Admission of Additional Members.



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Section 11.4Amendment of Agreement and Certificate of Formation.

To
effect the admission to the Company of any Member, the Managing Member shall take all steps necessary and appropriate under the Act to amend the records of the Company to reflect such
admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by law, the Managing Member shall prepare and file an amendment to the Certificate of
Formation, and the Managing Member may for this purpose, among others, exercise the power of attorney granted pursuant to Section 2.6.

ARTICLE XII  WITHDRAWAL OF MEMBERS

Section 12.1Withdrawal of Members.

Without
the prior written consent of the Managing Member, which may be granted or withheld in its sole discretion, and except as provided in Section 11.1, no Member shall have the
right to withdraw from the Company.

ARTICLE XIII  DISSOLUTION AND LIQUIDATION

Section 13.1Dissolution.

The
Company shall not be dissolved by the admission of Substituted Members or Additional Members in accordance with the terms of this Agreement. The Company shall dissolve, and its
affairs shall be wound up, upon:



Section 13.2Liquidator.

Upon
dissolution of the Company, the Managing Member shall select one or more Persons to act as Liquidator. The Liquidator shall be entitled to receive such compensation for its services
as may be approved by a majority of the Members. The Liquidator shall agree not to resign at any time without 15 days' prior notice and may be removed at any time, with or without cause, by
notice of removal approved by a majority of the Members. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights,
powers and duties of the

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original Liquidator) shall within 30 days thereafter be approved by holders of at least a majority of the Members. The right to approve a successor or substitute Liquidator in the manner
provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Article XIII, the
Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the Managing
Member under the terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in
Section 7.3(a)) to the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the duties and functions of the Liquidator hereunder for and during such period of
time as shall be reasonably required in the good faith judgment of the Liquidator to complete the winding up and liquidation of the Company as provided for herein.

Section 13.3Liquidation.

The
Liquidator shall proceed to dispose of the assets of the Company, discharge its liabilities, and otherwise wind up its affairs in such manner and over such period as the Liquidator
determines to be in the best interest of the Members, subject to Section 18-804 of the Act and the following:



Section 13.4Cancellation of Certificate of Formation.

Upon
the completion of the distribution of Company cash and property as provided in Section 13.3 in connection with the liquidation of the Company, the Company shall be terminated
and the Certificate of Formation, as well as all qualifications of the Company as a foreign limited liability company in jurisdictions other than the State of Delaware, shall be canceled and such
other actions as may be necessary to terminate the Company shall be taken.

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Section 13.5Return of Capital Contributions.

The
MLP shall not be personally liable for, and shall have no obligation to contribute or loan any monies or property to the Company to enable it to effectuate, the return of the Capital
Contributions of the Members, or any portion thereof, it being expressly understood that any such return shall be made solely from Company assets.

Section 13.6Waiver of Partition.

To
the maximum extent permitted by law, each Member hereby waives any right to partition of the Company property.

Section 13.7Capital Account Restoration.

No
Member shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Company.

ARTICLE XIV  AMENDMENT OF AGREEMENT

Section 14.1Amendment to be Adopted Solely by the Managing Member.

Each
Member agrees that the Managing Member, without the approval of any Member, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record
whatever documents may be required in connection therewith, to reflect:



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Section 14.2Amendment Procedures.

Except
with respect to amendments of the type described in Section 14.1, all amendments to this Agreement shall be made in accordance with the following requirements. Amendments
to this Agreement may be proposed only by or with the consent of the Managing Member which consent may be given or withheld in its sole discretion. A proposed amendment shall be effective upon its
approval by the Members.

ARTICLE XV  MERGER

Section 15.1Authority.

The
Company may merge or consolidate with one or more corporations, limited liability companies, business trusts or associations, real estate investment trusts, common law trusts or
unincorporated businesses, including a general partnership or limited partnership, formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance with this Article 15.

Section 15.2Procedure for Merger or Consolidation.

Merger
or consolidation of the Company pursuant to this Article XV requires the prior approval of the Managing Member. If the Managing Member shall determine, in the exercise of
its discretion, to consent to the merger or consolidation, the Managing Member shall approve the Merger Agreement, which shall set forth:



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Section 15.3Approval by Members of Merger or Consolidation.



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Section 15.4Certificate of Merger.

Upon
the required approval by the Managing Member and the Members of a Merger Agreement, a certificate of merger shall be executed and filed with the Secretary of State of the State of
Delaware in conformity with the requirements of the Act.

Section 15.5Effect of Merger.



ARTICLE XVI  GENERAL PROVISIONS

Section 16.1Addresses and Notices.

Any
notice, demand, request, report or proxy materials required or permitted to be given or made to a Member under this Agreement shall be in writing and shall be deemed given or made
when delivered in person or when sent by first class United States mail or by other means of written communication to the Member at the address described below. Any notice to the Company shall be
deemed given if received by the Managing Member at the principal office of the Company designated pursuant to Section 2.3. The Managing Member may rely and shall be protected in relying on any
notice or other document from a Member, Assignee or other Person if believed by it to be genuine.

Section 16.2Further Action.

The
parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this
Agreement.

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Section 16.3Binding Effect.

This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

Section 16.4Integration.

This
Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining
thereto.

Section 16.5Creditors.

None
of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company.

Section 16.6Waiver.

No
failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

Section 16.7Counterparts.

This
Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto, independently of the signature of any other party.

Section 16.8Applicable Law.

This
Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

Section 16.9Invalidity of Provisions.

If
any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby.

Section 16.10Consent of Members.

Each
Member hereby expressly consents and agrees that, whenever in this Agreement it is specified that an action may be taken upon the affirmative vote or consent of less than all of the
Members, such action may be so taken upon the concurrence of less than all of the Members and each Member shall be bound by the results of such action.

[The Remainder Of This Page Is Intentionally Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

| |  | PACIFIC ENERGY PARTNERS, L.P.
| |  | -----------------------------
| |  | By:                          
| |  | By:                          

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