BROWNSVILLE NAVIGATION DISTRICT
                                                         CONTRACT NO. 2823 "H"
THE  STATE  OF  TEXAS        )(
COUNTY  OF  CAMERON          )(

                                LEASE AMENDMENT
                                ---------------

     WHERAS,  by  Lease  Agreement,  the  BROWNSVILLE  NAVIGATION  DISTRICT OF
CAMERON  COUNTY,  TEXAS,  leased  and  let  to  PENN OCTANE CORPORATION, 14.76
acres  of  land  in  Cameron  County,  Texas;  and
     WHEREAS,  the  said  Lessee  desires to increase the size and said leased
premises;  NOW  THEREFORE,
     THIS  CONTRACT  between  the  BROWNSVILLE  NAVIGATION DISTRICT OF CAMERON
COUNTY,  TEXAS,  herein styled "District" and PENN OCTANE CORPORATION, a Texas
corporation,  hereinafter  styled  "Lessee"

                             W I T N E S S E T H:
                             --------------------

                                      1.
     The  aforesaid  lease is amended so as to be increase the leased premises
by  adding  16.40 acres which are described in Exhibit "A" attached hereto and
made  a  part  hereof  for  all  purposes.
                                      2.
The annual rental shall be increased to Seventy Four Seven Hundred Eighty Four
and  00/100  Dollars  ($74,784.00)  effective  April  15,  1997,  payable
semi-annually  installments  of  $37,392.00  on the 15th of April and October.
                                      3.
     All  other  terms  and  provisions  of said lease are continued in force.
     IN  TESTIMONY  WHEREOF,  said  BROWNSVILLE NAVIGATION DISTRICT OF CAMERON
COUNTY, TEXAS, has caused these presents to be executed by its proper officers
thereunto  duly  authorized,  and  PENN OCTANE CORPORATION, has executed these
presents,  this  7th  day  of  May, 1997.

                                         BROWNSVILLE  NAVIGATION  DISTRICT  OF
                                         CAMERON  COUNTY,  TEXAS


ATTEST:                      By: /S/ MARIO VILLARREAL
                                 ---------------------------------------
                             Mario Villarreal, Sr., Chairman of the
                             Board of Navigation and Canal Commissioners
___________________________  of the Brownsville Navigation District of
Secretary                    Cameron County, Texas



                                LEASE AMENDMENT

                                    PAGE 1



                             PENN  OCTANE  CORPORATION



ATTEST:                      By: /S/ JEROME B. RICHTER
                                 ---------------------
                                 JEROME B. RICHTER


/S/ IAN T. BOTHWELL
-------------------
IAN T. BOTHWELL
Secretary





THE  STATE  OF  TEXAS        )(
COUNTY  OF  CAMERON          )(


     This  instrument  was  acknowledged  before  me  on  the  ______  day  of
___________,  1997,  by MARIO  VILLARREAL, SR., in his capacity as Chairman of
the Board of Navigation and Canal Commissioners of the  Brownsville Navigation
District of Cameron County,  Texas.

               __________________________________________
               Notary  Public  in  and  for  the  State  of  Texas
               My  Commission  Expires:    _____________________




THE  STATE  OF  TEXAS        )(
COUNTY  OF  CAMERON          )(

     This  instrument  as  acknowledged  before  me  on  the  _____  day  of
_____________,  1997,  by  ________________________,
_________________________________  of  PENN  OCTANE  CORPORATION,  a _________
corporation,  in  behalf  of  said  corporation.


               __________________________________________
               Notary  Public  in  and  for  the  State  of  Texas
               My  Commission  Expires:    _____________________












                                LEASE AMENDMENT

                                    PAGE 2

<PAGE>