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EXHIBIT 10.3



TRANSPORTATION SERVICES AGREEMENT



THIS MARINE TRANSPORTATION AGREEMENT (this “Agreement”) is executed this 23rd
day of December, 2003, by and between Martin Operating Partnership L.P., a
Delaware limited partnership (“Owner”), and Midstream Fuel Service LLC, an
Alabama limited liability company (“Charterer”), in order to evidence the
agreement of such parties with respect to Owner’s provision of marine
transportation services with respect to #2 fuel oil and high sulfur diesel on
board its marine vessels under the following terms and conditions.




	 	 	 
	1. TERM; TERMINATION	 	
The initial term of this Agreement shall be for 3
years (the “Initial Term”) commencing on the date
first set forth above (the “Commencement Date”) and
ending on the 3rd anniversary of the Commencement
Date. This Agreement will automatically renew for
successive one year terms (each a “Renewal Term”, and
together with the Initial Term, the “Term”), unless
either Charterer or Owner elects not to renew this
Agreement by providing the other party with written
notice of such election 30 days prior to the
expiration of the Initial Term or Renewal Term, as
applicable, at which point this Agreement will
automatically terminate.
	 	 	 
	 	 	
Within 30 days of the end of the Initial Term, and
within 30 days of the end of each Renewal Term, both
parties hereto shall have the right renegotiate the
fee specified below for the use of the vessels. If
no such agreement on such fee is reached by such
parties by the commencement of a Renewal Term, this
Agreement shall automatically terminate.
	 	 	 
	 	 	
Either party hereto shall have the right to terminate
this Agreement in the event of a breach by the other
party of its obligations hereunder, subject to 10
days prior written notice of such breach given by the
non-breaching party to the breaching party and the
opportunity for such breaching party to cure such
breach during such 10 day period.
	 	 	 
	 	 	
Upon any such termination, this Agreement shall
thereafter have no further force or effect except as
to already accrued rights and obligations, which
shall continue until satisfied.
	 	 	 
	2. GENERAL TERMS	 	
During the Term, Charterer agrees that Owner will be
the sole and exclusive provider of marine
transportation services for #2 fuel oil and high
sulfur diesel owned by Charterer or owned by others
and in transit for sale to Charterer so long as Owner
has the required equipment available. Owner shall at
all times provide sufficient and proper equipment for
Charterer’s performance of such transportation. Said
equipment shall be manned, equipped, supplied and
operated by Owner. The master and crew of said
vessels shall be fully qualified, experience and,
where necessary, certified and licensed. Owner
agrees that said equipment shall be maintained in a
seaworthy, staunch, tight and suitable condition and,
to the best of Owner’s knowledge, in compliance with
all applicable laws and regulations.
	 	 	 
	 	 	
In connection with its use of any vessel, Charterer
will follow Owner’s normal scheduling, loading and
offloading protocols established from time to time,
subject to Owner’s obligations set forth in this
Agreement.





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	3. RATE	 	
Charterer agrees to pay to Owner a fee of $______ per
gallon of product transported. Owner will invoice
such fees to Charterer on a monthly basis and
Charterer will pay such invoiced amounts within 30
days of invoice date.
	 	 	 
	 	 	
The fee stated above, unless otherwise adjusted by
the parties pursuant to Section 1 above, shall be
adjusted annually (both upward and downward), by a
factor equal to the amount of increase or decrease,
as the case may be, in the Consumer Price Index for
the immediately proceeding month of November, over
the Consumer Price Index for November of the
preceding year. For purposes hereof, the term
“Consumer Price Index” shall mean the “Consumer Price
Index for Urban Wage Earners and Clerical Workers
(1967=100)” specified for “All Items. United States”
compiled by the Bureau of Labor Statistics of the
United States Department of Labor (the “Index”). In
the event the Consumer Price Index shall be converted
to a different standard reference base or otherwise
revised, the determination of the percentage change
shall be made with the use of such conversion factor,
formula or table for converting the Consumer Price
Index as may be published by the Bureau of Labor
Statistics or, if said Bureau shall not publish the
same, then as shall be reasonably determined by the
parties.
	 	 	 
	4. LOAD AND DISCHARGE	 	
The Load Port shall be FOB Refinery Offtake in the
U.S. Gulf of Mexico. The Discharge Port shall be at
the Owner’s terminals located at Venice, LA; Port
Forrochon, LA; Berwick, LA; Intracoastal City, LA;
Cameron, LA; Sabine Pass, TX; Beaumont, TX;
Galveston, TX; Houston, TX; Freeport, TX; Port
O’Connor, TX; and Harbor Island, TX.
	 	 	 
	5. TITLE TO PRODUCT	 	
Title to all product handled shall remain at all
times in the name of the Charterer. The Charterer
agrees not to tender for load any product injurious
to the vessels or which product would render the
vessels unfit, after cleaning, for the proper storage
of similar product.
	 	 	 
	6. ASSIGNMENT	 	
Neither party shall assign this Agreement without the
express written consent of the other party.
	 	 	 
	7. ENTIRE AGREEMENT	 	
This Agreement shall constitute the entire agreement
concerning the subject hereof between the parties
superseding all previous agreements, negotiations and
representations made prior or contemporaneous to the
date hereof. This Agreement shall be modified or
amended only by written agreement executed by both
parties hereto.
	 	 	 
	8. GOVERNING LAW	 	
This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
	 	 	 
	9. ADDITIONAL TERMS	 	
The “Additional Terms” attached hereto as Exhibit A
shall be deemed to be incorporated into this
Agreement by this reference.





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



	 	 	 
	 	 	
MARTIN OPERATING PARTNERSHIP L.P.
	 	 	 
	 	 	
By:  Martin Operating GP LLC, Its General Partner






	 	 	 
	 	By:	
Martin Midstream Partners L.P., Its Sole Member






	 	 	 
	 	By:	
Martin Midstream GP LLC, Its General Partner






	 	 	 
	 	 	
By: /s/ RUBEN S. MARTIN
	 	 	


	 	 	
Ruben S. Martin
	 	 	
Chief Executive Officer and President






	 	 	 	 	 
	 	 	MIDSTREAM FUEL SERVICE LLC
	 	 	 	 	 
	 	 	
By:
	 	Martin Resource Management Corporation,

its Sole Member
	 	 	 	 	 






	 	 	 	 	 
	 	 	By: /s/ RUBEN S. MARTIN


	 	 	 	 	Name: Ruben S. Martin
	 	 	 	 	

	 	 	 	 	Title: Chief Executive Officer and President
	 	 	 	 	






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EXHIBIT A



ADDITIONAL TERMS



These additional terms are deemed to be incorporated by reference into this
Agreement.



     1. INVOICING & PAYMENT. All monthly Owner invoices to Charterer for rates
and cost items will be paid by Charterer within 30 days of invoice date in
accordance with Owner’s normal payment protocols, which will be specified in
the applicable invoice. Each monthly invoice shall be itemized to include
charges by applicable vessel by day.


     2. DEMISE OF CHARTER. The Master of an applicable vessel, although
appointed by and in the employ of Owner and subject to Owner’s direction and
control, shall observe the reasonable instructions of Charterer in connection
with Charterer’s transportation needs under this Agreement; PROVIDED, HOWEVER,
THAT NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED
AS CREATING A DEMISE OF THE APPLICABLE VESSEL TO CHARTERER OR AS VESTING
CHARTERER WITH ANY CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE
APPLICABLE VESSEL.


     3. POLLUTION PREVENTION. Owner will, in the case of an escape or
discharge of products or threat of escape or discharge of same from the
applicable vessel into the navigable waters of the United States, promptly
undertake such measures as are reasonably necessary or which may be required by
applicable laws, rules and regulations to mitigate the resultant pollution
damage; provided, however, that Charterer may at its option, and upon notice to
Owner and on the conditions hereinafter set forth, undertake such measures.
Charterer shall keep Owner advised of any such measures to be undertaken by it
under such circumstances. Any of such measures actually undertaken by
Charterer shall be at Owner’s expense (except to the extent that such escape or
discharge was caused or contributed to by Charterer). If Owner believes that
any such measures undertaken by Charterer should not be undertaken or should be
discontinued, Owner may so notify Charterer and thereafter Charterer, if it
elects to continue such measures, shall do so at its own risk and expense.


     4. INDEMNITY. Owner covenants and agrees to fully defend, protect,
indemnify and hold harmless Charterer and its affiliates from and against each
and every claim, demand, cause of action, liability, damage, cost or expense
(including, but not limited to, reasonable attorney’s fees and expenses
incurred in the defense of Charterer), resulting from any damage to property or
injury or death to persons caused, directly or indirectly, by Owner’s acts or
omissions in connection with Owner’s provision of marine transportation
services hereunder, except to the extent caused, directly or indirectly, by the
acts or omissions of Charterer.


     Charterer covenants and agrees to fully defend, protect, indemnify and
hold harmless Owner and its affiliates from and against each and every claim,
demand, cause of action, liability, damage, cost or expense (including, but not
limited to, reasonable attorney’s fees and expenses incurred in the defense of
Owner), resulting from any damage to property or injury or death to persons
caused, directly or indirectly, by Charterer’s acts or omissions in connection
with Charterer’s use of marine transportation services hereunder, except to the
extent caused, directly or indirectly, by the acts or omissions of Owner.


     The foregoing indemnities shall expressly exclude any liability for
consequential, punitive, special or similar damages, including, without
limitation, lost profits.


     5. COMPLIANCE WITH LAW; INSURANCE: During the Term of this Agreement,
Owner shall comply in all material respects with applicable laws, including,
without limitation applicable environmental, health, safety and financial
responsibility laws, rules and regulations, applicable to the use of the Vessel
for bulk crude oil or finished lubricating products transportation. Owner
covenants that it will maintain at all times during the Term of this Agreement
insurance coverage for sudden and accidental pollution of $500,000,000.


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     6. CHARTERER’S REPRESENTATIVES: Charterer’s representatives may board any
vessel used under this Agreement at any convenient place to observe
cargo-handling operations, to inspect logs and certificates, and to confirm
that Owner is fulfilling its obligations under this Agreement.


     7. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it will maintain and
enforce at all times during the Term of this Agreement a drug and alcohol abuse
policy applicable to the vessels which complies in all material respects with
the minimum standards promulgated by the U.S. Coast Guard.


     8. CONDITION OF EQUIPMENT: Owner shall, before and at commencement of
each voyage by any vessel under this Agreement, exercise commercially
reasonable efforts to ensure that such vessel is seaworthy and in good
operating condition, properly manned, equipped and supplied for the voyage, to
ensure that the pipes, pumps and coils tight, staunch, are in good operating
condition and fit for the voyage, and to ensure that the tanks and other spaces
in which product is to be carried are in good operating condition and fit for
the carriage and preservation of the same. To the extent required by
applicable law, Owner will maintain at all times during the Term of this
Agreement a valid and subsisting certificate or other permit issued by the U.S.
Coast Guard (or other governmental bureau or department having jurisdiction)
approving the applicable vessel for the transportation and carriage of
inflammable liquids.


     9. SUBLET: Charterer shall not be permitted to sublet the use of any
vessels to any third party.


     10. FORCE MAJEURE: The vessels, their captains and Owner shall not,
unless otherwise in this Agreement expressly provided, be responsible for any
loss or damage arising or resulting from: any act, default or barratry of the
captain, pilots, mariners, or other servants of Owner in the navigation or
management of such vessel; fire, unless caused by the personal design or
neglect of Owner; collision, stranding or peril, danger or accident of
navigable waters; saving or attempting to save life or property; wastage in
weight or bulk, or any other loss or damage arising from inherent defect,
quality or vice of the cargo; any act or omission of Charterer, Owner, any
other shipper or any consignee of the cargo, their agents or representatives;
insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage
of shafts, or any latent defect in hull, equipment or machinery;
unseaworthiness of any vessel unless caused by want or due diligence on the
part of Owner to make such vessel seaworthy or to have it properly manned,
equipped and supplied; or from any other cause of whatsoever kind arising
without the actual fault of Owner. And neither the vessels, their captains or
Owner, nor the Charterer, shall, unless otherwise in this Agreement expressly
provided, be responsible for any loss or damage or delay or failure in
performing hereunder arising or resulting from; act of God, act of war; act of
public enemies, pirates or assailing thieves; acts of terrorism; arrest or
restraint of princes, rulers of people, or seizure under legal process provided
bond is promptly furnished to release such vessel or cargo; strike or lockout
or stoppage or restraint of labor from whatever cause, either partial or
general, or riot or civil commotion.




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