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                                                                   Exhibit 10.5b


                                                              December 20, 2000*

BY TELEFACSIMILE AND FEDERAL EXPRESS

Jack R. Pine,
Sr. Vice President & General Counsel
Statia Terminals, Inc.
801 Warrenville Road Ste. 200
Lisle, IL 60532-1395

Fax No.: (630) 435-9542

Re:      Settlement of the Various Audit Items Related to the
         Escalation Provision of the Point Tupper Storage and
         Throughput Agreement (No. 069-940-607)

Dear Mr. Pine:

I am writing to confirm the understanding that Tommy Thompson and [****] [****]
reached telephonically in the above-referenced matter on Thursday, December 14,
2000. In sum, we understand that Statia has agreed to accept [*****'*] offer
made last Wednesday when we were all together in [*****'*] [*****] offices. In
addition, [*****] will consider sharing in certain capital expenditures Statia
has made at Point Tupper.

The terms are as follows:

(1)      Effective a/o [******] [*], [****], [*****] will pay a monthly storage
         fee of [*********], which is US$[***,***] per month (the Minimum
         Monthly Charge)(1);

(2)      We ([*****] and Statia) will replace the current escalation provisions
         contained in paragraph 5.3 of the Agreement with provision for an
         annual escalation of the Minimum Monthly Charge by [**] [****]
         [********] [**] [***] [******] [*****] [****] [*****] [**********]
         [********] [**] [***] [****] [********] [*****] [****] [*******] [***]
         [***] [*****] [*********] [*****] [******] [*****] [**] [***] [******]
         [******] [***] [**********] [****];

(3)      We will eliminate the provision in paragraph 5.3 which permits
         termination of the Agreement by [*****] if the escalation calculation
         is greater than [**] year-to-year or more than [***] over any 5 year
         period;

--------

*    Asterisks indicate redacted language for which confidential treatment has
     been requested pursuant to Rule 24b-2 of the Securities Exchange Act of
     1934, as amended.

(1)  US$[***] times [*,***,***] [****] = US$[***,***].


<PAGE>   2
Mr. Jack R. Pine
Statia Terminals, Inc.
December 20, 2000
Page 2


(4)      Upon the execution of this letter agreement, [*****] will pay the
         amounts it has withheld from Statia's Minimum Monthly Charges since
         January 1, 2000, which are in the amount of US$[**********] [***]
         [********] [**], [****], plus interest in accordance with the Storage
         and Throughput Agreement, as directed by Statia in its reasonable
         discretion; and

(5)      Also upon the execution of this letter agreement, the payment for the
         December 2000 Monthly Minimum charge due December 31, 2000 will include
         an additional $[*********] representing the retroactive increase of the
         Monthly Minimum for August through December, 2000 (based on the
         escalation method described in (2) above).

Mr. Thompson also requested that [*****] consider sharing without any commitment
by [*****] to pay at this time), in some portion, Statia's costs for certain
capital expenditures in the amount of approximately US$[***-*******], incurred
since about 1996, which Statia believes have benefited [*****]. [****] [****]
has agreed to consider such sharing upon Statia's presentation and explanation
of such costs and benefits (without any commitment by [*****] to pay at this
time). Any such arrangement or understanding regarding this matter will be
addressed by the parties in a separate writing in the future.

If this letter is consistent with Statia's understanding, please execute this
letter in the space provided below.

                                                      Very truly yours,


                                                     [****] [*]. [***********]

ACKNOWLEDGED AND AGREED:
Statia Terminals Canada, Incorporated

By:               ___________________________
Title:   ___________________________
Date:    ___________________________

/drc

cc:      Mr. James Brenner, Statia Terminals, Inc., Deerfield Beach, FL
         Mr. Tom Thompson, Statia Terminals, Inc., Deerfield Beach, FL
         Mr. James Cameron, Deerfield Beach, FL
         Mr. [*****] [****], [*****] [***********], [*****], [**]
         Mr. [*****] [****], [*****] [***********], [*****], [**]