Document:

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                                                                    Exhibit 10.5

THIS OPTION AND THE LIMITED LIABILITY COMPANY INTERESTS PURCHASABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                              UNIT PURCHASE OPTION

                            Void after July 10, 2006

Option No. 2                                                       July 10, 2003

         FOR VALUE RECEIVED, the undersigned, PENN OCTANE CORPORATION, a
Delaware corporation ("Penn Octane"), hereby certifies that Jerome B. Richter
(the "Holder"), or assigns, is entitled, subject to the terms set forth below,
to purchase from Penn Octane after the date (the "Distribution Date") Penn
Octane completes the distribution to its stockholders of all of the outstanding
common units of Rio Vista Energy Partners L.P., a Delaware limited partnership,
and before 5:00 P.M. New York time, on July 10, 2006 (the "Expiration Date")
25,000 Units (as defined below) of Rio Vista GP LLC, a Delaware limited
liability company (the "Company"), representing 25% of the outstanding Units of
the Company. The purchase price per Unit shall be $__ (the "Exercise Price").

         As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:

         (a) The term "Company" includes any corporation that shall succeed to
or assume the obligations of the Company.

         (b) The term "Exercise Price" shall have the meaning ascribed to such
term in the first paragraph hereof.

         (c) The term "Limited Liability Company Agreement" shall mean the
Amended and Restated Limited Liability Company Agreement of the Company dated
__________, 2003.

         (c) The term "Purchase Price" shall mean the amount equal to the
product of the Exercise Price and the number of Units to be purchased upon the
full exercise of this Option.

         (d) The term "Units" shall have the meaning ascribed to such term in
the Limited Liability Company Agreement.

         1. Exercise of Option. This Option may be exercised in full by the
Holder hereof at any time after the Distribution Date and before the Expiration
Date by surrender of this Option, with the form of subscription, addendum
agreement to the limited liability company agreement of the Company and the
Voting Agreement attached hereto duly executed by such Holder, to the Company
and Penn Octane at their respective principal offices, accompanied by payment of
the

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Purchase Price. The Purchase Price shall be paid by cash or check payable to the
order of Penn Octane Corporation.

         2. When Exercise Effective. The exercise of this Option shall be deemed
to have been effected immediately prior to the close of business on the business
day on which this Option is surrendered as provided in Section 1 and the
documents referenced in Section 1 are duly executed and delivered as provided in
Section 1, and at such time the Holder shall be deemed to be the record holder
of such Units for all purposes.

         3. Delivery on Exercise. As soon as practicable after the exercise of
this Option in full, and in any event within ten (10) business days thereafter,
Penn Octane at its expense (including the payment by it of any applicable issue
taxes) will cause to be delivered to the holder hereof a certificate or
certificates for the number of Units to which such holder shall be entitled on
such exercise.

         4. Investment Intent. Unless a current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), shall be in effect
with respect to the securities to be purchased upon exercise of this Option, the
Holder hereof, by accepting this Option, covenants and agrees that, at the time
of exercise hereof, and at the time of any proposed transfer of securities
acquired upon exercise hereof, such Holder will deliver to the Company and Penn
Octane a written statement that the securities acquired by the Holder are for
such Holder's own account, and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) except
pursuant to current registration statement under the Securities Act or an
available exemption from registration.

         5. Transfer. This Option is not transferable without the prior written
consent of Penn Octane.

         6. No Rights or Liability as a Member. This Option does not entitle the
Holder hereof to any voting rights or other rights as a Member (as defined in
Limited Liability Company Agreement). No provisions hereof and no enumeration
herein of the rights or privileges of the Holder hereof shall give rise to any
liability of such holder as a Member of the Company. The Units to be purchased
pursuant to this Option are subject to the terms of the Limited Liability
Company Agreement. The Holder shall not be deemed to be a Member and shall not
have any rights of a Member or rights of an assignee from a Member with respect
to, any Units subject to this Option unless and until the Holder has satisfied
all requirements for exercise of this Option pursuant to its terms. Before
receiving the Units subject to this Option, the Holder shall take such action
and execute such documents as the Company and Penn Octane may require to become
a Member of the Company.

         7. Damages. Penn Octane recognizes and agrees that the Holder hereof
will not have an adequate remedy if Penn Octane fails to comply with the terms
of this Option and that damages will not be readily ascertainable, and Penn
Octane expressly agrees that, in the event of such failure, it shall not oppose
an application by the Holder of this Option or any other person entitled to the
benefits of this Option requiring specific performance of any and all provisions
hereof or enjoining the Penn Octane from continuing to commit any such breach of
the terms hereof.

                                       2

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         8. Notices. All notices and other communications required or permitted
hereunder shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by first class mail, or (c) by a recognized
overnight delivery service (with charges prepaid), addressed (1) if to the
Holder of this Option, at such Holder's address as it appears in the records of
Penn Octane (unless otherwise indicated by such Holder), (2) if to Penn Octane,
at its office at 77-530 Enfield Lane, Building D, Palm Desert, CA 92211,
Attention: Chief Executive Officer, or at such other address as Penn Octane
shall have furnished to the Holder of the Option in writing or (3) if to the
Company, at its office at 820 Gessner Road, Suite 1285, Houston, Texas 77024 or
at such other address as the Company or Penn Octane shall have furnished to the
Holder of the Option in writing.

         9. Payment of Taxes. Penn Octane shall pay all taxes and other
governmental charges that may be imposed in respect to the issue or delivery of
the Units purchased upon the exercise of this Option.

         10. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Option and the
attachments hereto shall be governed by, and construed in accordance with, the
laws of the State of Texas without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas. In furtherance of the foregoing, the internal law
of the State of Texas shall control the interpretation and construction of this
Option (and all attachments hereto), even though under that jurisdiction's
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.

         11. Consent to Jurisdiction.

                  (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any Texas state court or federal court o the United States of
America sitting in Houston, Texas, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby or for recognition or enforcement of any
judgment relating thereto, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas state court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

                  (b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Option or the
transactions contemplated hereby in any Texas state or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

                                       3

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                  (c) Each party to this Option irrevocably consents to service
of process in the manner provided for notices in Section 8. Nothing in this
Option will affect the right of any party to this Option to serve process in any
other manner permitted by law.

         12. Waiver of Jury Trial.

                  (a) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS OPTION IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS OPTION OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

                  (b) EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVER, (iii) IT MAKES SUCH WAIVER VOLUNTARILY, AND (iv) IT
HAS BEEN INDUCED TO ENTER INTO THIS OPTION BY, AMONG OTHER THINGS, THE MUTUAL
WAIVER AND CERTIFICATIONS IN THIS SECTION 12.

         13. Miscellaneous. This Option and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The headings in this Option are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.

                                   PENN OCTANE CORPORATION

                                   By:  __________________________________
                                   Name: _________________________________
                                   Title: ________________________________

                                   ACKNOWLEDGED AND AGREED TO WITH RESPECT
                                   TO ITS RIGHTS AND OBLIGATIONS HEREUNDER:

                                   ---------------------------------------
                                   Jerome B. Richter

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                             ATTACHMENT A TO OPTION

                              FORM OF SUBSCRIPTION

                    (TO BE SIGNED ONLY ON EXERCISE OF OPTION)

         To:      PENN OCTANE CORPORATION

         The undersigned, the holder of the within Option, hereby irrevocably
elects to exercise the purchase rights represented by such Option for, and to
purchase thereunder, 25,000 Units of RIO VISTA GP LLC and herewith makes payment
of $___________ therefor, and requests that the certificates for such units
be issued in the name of, and delivered to the undersigned, whose address
is _________________________________________.

                                   ---------------------------------------
                                   (Signature must conform in all respects
                                   to name of holder as specified on the
                                   face of the Option)

                                   ---------------------------------------

                                   ---------------------------------------
                                   Address

         Dated:  ________________________

                                       5
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                             ATTACHMENT B TO OPTION

               ADDENDUM AGREEMENT TO THE LIMITED LIABILITY COMPANY
                         AGREEMENT OF RIO VISTA GP LLC

                                      -6-
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                             ATTACHMENT C TO OPTION

                                VOTING AGREEMENT

                                      -7-<PAGE>
                                                                    Exhibit 10.6

                         RIO VISTA ENERGY PARTNERS L.P.
                              UNIT OPTION AGREEMENT

                            Void after July 10, 2006

Option No. ___                                      Date of Grant: July 10, 2003

     FOR VALUE RECEIVED and pursuant to the terms of that certain letter
agreement dated November 29, 2002, between Penn Octane Corporation, a Delaware
corporation ("Penn Octane") and Shore Capital LLC, the undersigned, RIO VISTA
ENERGY PARTNERS L.P., a limited partnership organized and existing under the
laws of the State of Delaware, hereby certifies that Shore Capital LLC is
entitled, subject to the terms set forth below, to purchase from the Partnership
after the completion of the distribution by Penn Octane to its stockholders of
all of the outstanding Common Units of the Partnership and before 5:00 P.M. New
York time, on July 10, 2006 (the "Expiration Date"), 97,415 Common Units of the
Partnership. The purchase price per Common Unit shall be $8.47 (the "Exercise
Price").

     The details of this Option Agreement (this "Agreement") are as follows:

     1.   DEFINITIONS.

          (A) "AFFILIATE" means, with respect to any specified person, any
person that directly or through one or more intermediaries controls or is
controlled by or is under common control with the specified person. As used in
this definition, the term "control" means the possession, directly or
indirectly, 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. For purposes of clarification, Penn Octane Corporation is
an Affiliate of the Partnership and the General Partner.

          (B) "CODE" means the Internal Revenue Code of 1986, as amended.

          (C) "GENERAL PARTNER" means Rio Vista GP LLC, a Delaware limited
liability company, and its successors or assigns.

          (D) "MANAGER" means a manager of the General Partner under the
Delaware Limited Liability Company Act.

          (E) "OFFICER" means any person designated by the General Partner as an
officer.

          (F) "OPTION" means an option to acquire Common Units granted pursuant
to this Agreement.

          (G) "OPTIONHOLDER" means the person to whom an Option to acquire
Common Units is granted pursuant to this Agreement.

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          (H) "PARTNERSHIP" means Rio Vista Energy Partners L.P., a Delaware
limited partnership, and its successors or assigns.

          (I) "PARTNERSHIP AGREEMENT" means the limited partnership agreement of
the Partnership, as amended.

          (J) "PURCHASE PRICE" means the amount equal to the product of the
Exercise Price and the number of Common Units to be purchased upon exercise of
this Option.

          (K) "COMMON UNIT" has the meaning set forth in the Partnership
Agreement or any equity interest into which a Common Unit is exchanged or
converted.

     2.   ADMINISTRATION.

          (A) ADMINISTRATION BY GENERAL PARTNER. The General Partner shall
administer this Agreement. Any interpretation of this Agreement by the General
Partner and any decision by the General Partner under this Agreement shall be
final and binding on all persons.

          (B) POWERS OF GENERAL PARTNER. The General Partner shall have the
power, subject to, and within the limitations of, the express provisions of this
Agreement:

               (i)  to construe and interpret this Agreement, and to establish,
amend and revoke rules and regulations for its administration; the General
Partner, in the exercise of this power, may correct any defect, omission or
inconsistency in this Agreement, in a manner and to the extent it shall deem
necessary or expedient to make this Agreement fully effective; and

               (ii) generally, to exercise such powers and to perform such acts
as the General Partner deems necessary or expedient to promote the best
interests of the Partnership which are not in conflict with the provisions of
this Agreement.

     3.   NUMBER OF COMMON UNITS, EXERCISE PRICE AND CAPITALIZATION ADJUSTMENTS.
The number of Common Units subject to this Option and the exercise price per
Common Unit may be adjusted from time to time for capitalization adjustments
described in this Section. If any change is made in the Common Units subject to
this Agreement, without the receipt of consideration by the Partnership (through
conversion, merger, consolidation, reorganization, recapitalization, unit
distribution, distribution in property other than cash, Common Units split,
liquidating distribution, combination of Common Units, exchange of Common Units,
change in structure or other transaction not involving the receipt of
consideration by the Partnership), the Common Units subject to this Agreement
will be appropriately adjusted in the class(es) and number of securities and
price per Common Unit. The General Partner, the determination of which shall be
final, binding and conclusive, shall make such adjustments. (The conversion of
any convertible securities of the Partnership shall not be treated as a
transaction "without receipt of consideration" by the Partnership.)

     4.   METHOD OF PAYMENT. Payment of the Purchase Price is due in full upon
exercise of all or any part of this Option. The Optionholder may elect to make
payment of the Purchase Price in cash or by check.

     5.   WHOLE COMMON UNITS. This Option may only be exercised for whole Common
Units.

                                      -2-

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     6.   SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this Option may not be exercised unless the Common Units
issuable upon exercise of this Option are then registered under the Securities
Act or, if such Common Units are not then so registered, the Partnership has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The Partnership shall use its commercially
reasonable efforts to register such Common Units under the Securities Act.

     7.   TERM. The term of this Option commences on the date Penn Octane
completes the distribution to its stockholders of all the outstanding Common
Units of the Partnership and expires on the Expiration Date.

     8.   EXERCISE.

          (A) Subject to Section 8(c), the Optionholder may exercise this Option
during its term by delivering a Notice of Exercise (in a form designated by the
General Partner) together with the Purchase Price to the Secretary of the
General Partner, or to such other person as the General Partner may designate,
during regular business hours, together with such additional documents as the
General Partner may then require.

          (B) By exercising this Option, the Optionholder agrees that, as a
condition to any exercise of this Option, the Partnership or the General Partner
may require the Optionholder to enter an arrangement providing for the payment
by the Optionholder to the Partnership of any tax withholding obligation of the
Partnership, as reasonably determined by the Partnership, arising by reason of
(1) the exercise of this Option, or (2) the disposition of Common Units acquired
upon such exercise.

          (C) Notwithstanding anything herein to the contrary, during the term
of this Option, this Option may only be exercised during the first ten (10) days
of the first month of each fiscal quarter of the Partnership and during such
other periods as the General Partner may designate in its sole discretion for
purposes of minimizing the accounting costs to the Partnership resulting from
such exercise.

     9.   TRANSFERABILITY. This Option is not transferable, except to any
Affiliate of the Optionholder, and is exercisable only by the Optionholder or
such Affiliate. The transferability of the Common Units issued upon exercise of
this Option shall be subject to the conditions, restrictions and limitations set
forth in this Agreement, the Partnership Agreement and any other agreements the
Optionholder may have with the Partnership.

          (A) The provisions of this Section 9 may be waived with respect to any
transfer by the Partnership, upon duly authorized action of the General Partner.

          (B) Any sale or transfer, or purported sale or transfer, of the Common
Units by the Optionholder shall be null and void unless the terms, conditions,
and provisions of this Section 9 are observed and followed.

                                      -3-

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     10.  WITHHOLDING OBLIGATIONS

          (A) At the time this Option is exercised, in whole or in part, or at
any time thereafter as requested by the Partnership, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for, any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Partnership or an
Affiliate, if any, which arise in connection with this Option.

          (B) This Option is not exercisable unless the tax withholding
obligations of the Partnership and/or any Affiliate are satisfied. Accordingly,
you may not be able to exercise this Option when desired even though this Option
is vested, and the Partnership shall have no obligation to issue a certificate
for such Common Units or release such Common Units from any escrow provided for
herein.

     11.  TAX CONSEQUENCES AND CAPITAL ACCOUNT UPON EXERCISE OF OPTION. It is
intended that neither the Optionholder, the Partnership nor any of the partners
(owners) of the Partnership shall have any federal income tax consequences upon
grant of this Option, or, except as described herein, upon exercise of this
Option. Additionally, it is intended that the Optionholder shall not be treated
as a partner with respect to the Common Units subject to this Agreement until
such time as this Option is exercised. It is intended that, upon exercise of
this Option, the Optionholder shall include in income ("Exercise Income") in the
tax year of exercise an amount equal to the excess, if any, of the fair market
value of Common Units on the date of exercise over the sum of the amount the
Optionholder has paid or will pay to the Partnership ("Option Consideration")
upon the grant and exercise of the Option. It is intended that the Partnership
shall be entitled to a deduction equal to the amount of Exercise Income, which,
if the Partnership continues to be a partnership for federal income tax
purposes, shall be allocated solely to the partners of the Partnership other
than the Optionholder to whom the Exercise Income is attributable. Upon exercise
of this Option, Optionholder shall receive a positive capital account in the
Partnership (assuming the Partnership continues to be classified as a
partnership for federal income purposes) equal to the sum of the Exercise Income
to the Optionholder and the amount of Option Consideration paid by the
Optionholder. Should the federal income tax consequences differ from that
described in this section, the General Partner shall have the authority to
change the capital account or allocations of income and deduction to the
Optionholder as described herein in manner which in its discretion most closely
achieves the same economic effect of the consequences described in this Section.
Notwithstanding anything herein to the contrary, the General Partner shall have
the authority to change the tax reporting described above with respect to the
issuance or exercise of this Option or alter the capital accounts or allocations
of Partnership items as necessary to preserve or achieve the uniformity of
Common Units.

     12.  NOTICES. Any notices provided for in this Option or this Agreement
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by the Partnership to the Optionholder, five
(5) days after deposit in the United States mail, postage prepaid, addressed to
the Optionholder at the last address provided to the Partnership.

                                      -4-

<PAGE>

     13.  THIS AGREEMENT; PARTNERSHIP AGREEMENT. This Option is subject to all
the provisions of this Agreement, the provisions of which are hereby made a part
of this Option, and is further subject to all interpretations, amendments, rules
and regulations which may from time to time be promulgated and adopted pursuant
to this Agreement, and the Common Units to be delivered are subject to the terms
of the Partnership Agreement. In the event of any conflict among Optionholder's
rights under the Common Units, this Agreement and the Partnership Agreement, the
terms of the Partnership Agreement shall control.

     14.  MISCELLANEOUS.

          (A) AVAILABILITY OF COMMON UNITS. During the term of this Option, the
Partnership shall keep available at all times the number of Common Units
required to satisfy the Option.

          (B) PARTNER RIGHTS. No Optionholder shall be deemed to be partner of
the Partnership, or to have any of the rights of a partner or rights of an
assignee from a partner with respect to, any Common Units subject to the Option
unless and until such Optionholder has satisfied all requirements for exercise
of the Option pursuant to its terms.

          (C) INVESTMENT ASSURANCES. Unless the Common Units issuable upon
exercise of this Option are then registered under the Securities Act, the
General Partner may require an Optionholder, as a condition of exercising or
acquiring Common Units under the Option, to give written assurances that he is
an "accredited investor," as defined in the rules and regulations under the
Securities Act. The General Partner may, upon advice of counsel to the General
Partner, place legends on Common Units certificates issued under the Option as
such counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the Common Units.

          (D) PARTNERSHIP AGREEMENT. Before receiving Common Units, the
Optionholder shall take such action and execute such documents as the General
Partner may require to become a partner of the Partnership.

     IN WITNESS WHEREOF, this Option Agreement has been duly executed by the
parties hereto as of the Date of Grant.

                                           RIO VISTA ENERGY PARTNERS L.P.

                                           By: RIO VISTA GP LLC, general partner

                                               By:
                                                   -----------------------------
                                               Name:
                                                      --------------------------
                                               Title:
                                                      --------------------------

ACCEPTED AND AGREED:

SHORE CAPITAL LLC

By:
   -----------------------------------
      Richard Shore, Jr., President

                                      -5-

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