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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-Q

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended June 30, 2001

                                      OR

         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                        Commission file number: 1-14569

                      PLAINS ALL AMERICAN PIPELINE, L.P.

            (Exact name of registrant as specified in its charter)

          Delaware                                          76-0582150
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                                333 Clay Street
                             Houston, Texas 77002
                   (Address of principal executive offices)
                                  (Zip Code)

                                (713) 646-4100
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X    No
                                       ---     ---

At August 8, 2001, there were outstanding 27,015,939 Common Units, 1,307,190
Class B Common Units and 10,029,619 Subordinated Units.

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              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                               TABLE OF CONTENTS

                                                                    Page
                                                                    ----
PART I. FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets:
     June 30, 2001 and December 31, 2000...........................  3
Consolidated Statements of Income:
     For the three and six months ended June 30, 2001 and 2000.....  4
Consolidated Statements of Cash Flows:
     For the six months ended June 30, 2001 and 2000...............  5
Consolidated Statement of Partners' Capital:
     For the six months ended June 30, 2001........................  6

Notes to Consolidated Financial Statements.........................  7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
     CONDITION AND RESULTS OF OPERATIONS........................... 15

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
     MARKET RISKS.................................................. 23

PART II. OTHER INFORMATION......................................... 24

                                       2

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except unit data)

                                                                        JUNE 30,  DECEMBER 31,
                                                                          2001        2000
                                                                      ----------- ------------
                                                                      (UNAUDITED)
                            ASSETS
                                                                              
CURRENT ASSETS
Cash and cash equivalents                                            $    1,054    $  3,426
Accounts receivable and other current assets                            439,547     347,698
Inventory                                                               125,852      46,780
                                                                     ----------    --------
Total current assets                                                    566,453     397,904
                                                                     ----------    --------
PROPERTY AND EQUIPMENT                                                  624,893     467,619
Less allowance for depreciation and amortization                        (36,651)    (26,974)
                                                                     ----------    --------
                                                                        588,242     440,645
                                                                     ----------    --------
OTHER ASSETS
Pipeline linefill                                                        41,525      34,312
Other                                                                    17,612      12,940
                                                                     ----------    --------
                                                                     $1,213,832    $885,801
                                                                     ==========    ========
             LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES
Accounts payable and other current liabilities                       $  423,305    $328,542
Due to affiliates                                                        17,997      20,951
Short-term debt and current portion of long-term debt                    96,527       1,300
                                                                     ----------    --------
Total current liabilities                                               537,829     350,793
                                                                     ----------    --------
LONG-TERM LIABILITIES
Bank debt                                                               372,580     320,000
Other long-term liabilities and deferred credits                          1,017       1,009
                                                                     ----------    --------
Total liabilities                                                       911,426     671,802
                                                                     ----------    --------
COMMITMENTS AND CONTINGENCIES (NOTE 11)

PARTNERS' CAPITAL

Common unitholders (27,015,939 and 23,049,239 units outstanding
  at June 30, 2001 and December 31, 2000 respectively)                  303,323     217,073
Class B common unitholders (1,307,190 units outstanding)                 20,341      21,042
Subordinated unitholders (10,029,619 units outstanding)                 (32,699)    (27,316)
General partner                                                          11,441       3,200
                                                                     ----------    --------
Total partners' capital                                                 302,406     213,999
                                                                     ----------    --------
                                                                     $1,213,832    $885,801
                                                                     ==========    ========

                See notes to consolidated financial statements.

                                       3

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                     (in thousands, except per unit data)
                                  (unaudited)

                                                                THREE MONTHS ENDED           SIX MONTHS ENDED
                                                                      JUNE 30                     JUNE 30,
                                                                ------------------          ------------------
                                                                2001          2000          2001          2000
                                                                ----          ----          ----          -----
                                                                                          
REVENUES                                                    $1,586,617    $1,481,834    $3,106,741    $3,484,341
COST OF SALES AND OPERATIONS                                 1,550,230     1,449,060     3,037,624     3,415,015
                                                            ----------    ----------    ----------    ----------
Gross Margin                                                    36,387        32,774        69,117        69,326
                                                            ----------    ----------    ----------    ----------
EXPENSES
General and administrative                                      15,041         7,949        24,030        16,575
Depreciation and amortization                                    6,503         4,661        11,173        14,799
                                                            ----------    ----------    ----------    ----------
Total expenses                                                  21,544        12,610        35,203        31,374
                                                            ----------    ----------    ----------    ----------
OPERATING INCOME                                                14,843        20,164        33,914        37,952
Interest expense                                                (8,101)       (6,150)      (14,707)      (15,308)
Gain on sale of assets                                               -             -             -        48,188
Interest and other income                                          325         3,049           367        10,531
                                                            ----------    ----------    ----------    ----------
Income before extraordinary item and cumulative
 effect of accounting change                                     7,067        17,063        19,574        81,363
Extraordinary item                                                   -       (11,002)            -       (15,147)
Cumulative effect of accounting change (Note 5)                      -             -           508             -
                                                            ----------    ----------    ----------    ----------
NET INCOME                                                  $    7,067    $    6,061    $   20,082    $   66,216
                                                            ==========    ==========    ==========    ==========
NET INCOME - LIMITED PARTNERS                               $    6,794    $    5,874    $   19,483    $   64,826
                                                            ==========    ==========    ==========    ==========
NET INCOME - GENERAL PARTNER                                $      273    $      187    $      599    $    1,390
                                                            ==========    ==========    ==========    ==========
BASIC AND DILUTED NET INCOME
 PER LIMITED PARTNER UNIT
 Income before extraordinary item and
  cumulative effect of accounting change                    $     0.19    $     0.49    $     0.54    $     2.32
 Extraordinary item                                                  -         (0.32)            -         (0.43)
 Cumulative effect of accounting change                              -             -          0.02             -
                                                            ----------    ----------    ----------    ----------
  Net income                                                $     0.19    $     0.17    $     0.56    $     1.89
                                                            ==========    ==========    ==========    ==========
WEIGHTED AVERAGE UNITS
 OUTSTANDING                                                    35,685        34,386        35,039        34,386
                                                            ==========    ==========    ==========    ==========

                See notes to consolidated financial statements.

                                       4

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                  (unaudited)

                                                                                    SIX MONTHS ENDED
                                                                                       JUNE 30,
                                                                                  -------------------
                                                                                  2001           2000
                                                                                  ----           ----
                                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                   $    20,082      $  66,216
Items not affecting cash flows
 from operating activities:
  Depreciation and amortization                                                   11,173         14,799
  Gain on the sale of assets                                                           -        (48,188)
  Cumulative effect of accounting change                                            (508)             -
  Change in derivative fair value                                                    652              -
  Other noncash items                                                              5,741          4,712
Change in assets and liabilities, net of assets acquired and
 liabilities assumed:
 Accounts receivable and other current assets                                    (85,477)       162,125
 Inventory                                                                       (77,119)         2,493
 Accounts payable and other current liabilities                                   81,424       (207,607)
 Due to affiliates                                                                (2,947)             -
 Pipeline linefill                                                                     -           (929)
 Other long-term liabilities and deferred credits                                      -            (29)
                                                                             -----------      ---------
Net cash used in operating activities                                            (46,979)        (6,408)
                                                                             -----------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid in connection with acquisitions                                       (160,584)             -
Additions to property and equipment and other assets                              (9,412)        (5,548)
Proceeds from sales of assets                                                      1,077        223,859
                                                                             -----------      ---------
Net cash provided by (used in) investing activities                             (168,919)       218,311
                                                                             -----------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances (to) from affiliates                                                          -        (18,029)
Proceeds from long-term debt                                                   1,114,780        443,050
Proceeds from short-term debt                                                    193,150         45,250
Payment of subordinated debt - general partner                                         -       (114,000)
Principal payments of long-term debt                                          (1,061,200)      (485,900)
Principal payments of short-term debt                                            (98,345)      (100,969)
Costs incurred in connection with financing arrangements                          (7,972)        (6,500)
Proceeds from issuance of units                                                  106,209              -
Distributions to unitholders                                                     (33,096)       (26,973)
                                                                             -----------      ---------
Net cash provided by (used in) financing activities                              213,526       (264,071)
                                                                             -----------      ---------
Net increase (decrease) in cash and cash equivalents                              (2,372)       (52,168)
Cash and cash equivalents, beginning of period                                     3,426         53,768
                                                                             -----------      ---------
Cash and cash equivalents, end of period                                     $     1,054      $   1,600
                                                                             ===========      =========

                See notes to consolidated financial statements.

                                       5

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
                                (in thousands)
                                  (unaudited)

                                                                                                                      TOTAL
                                                              CLASS B                                    GENERAL     PARTNERS'
                                      COMMON UNITS         COMMON UNITS        SUBORDINATED UNITS        PARTNER     CAPITAL
                                    ---------------      ----------------      ------------------        -------     --------
                                    UNITS    AMOUNT      UNITS     AMOUNT      UNITS       AMOUNT        AMOUNT       AMOUNT
                                    -----    ------      -----     ------      -----       ------        ------       -------
                                                                                              
Balance at December 31, 2000        23,049   $217,073    1,307     $21,042     10,030     $(27,316)      $ 3,200      $213,999

Issuance of units                    3,967     98,640        -           -          -            -         2,878       101,518

Noncash compensation expense             -          -        -           -          -            -         5,741         5,741

Distributions                            -    (21,608)       -      (1,225)         -       (9,403)         (860)      (33,096)

Other comprehensive income               -     (3,941)       -        (205)         -       (1,575)         (117)       (5,838)

Net income                               -     13,159        -         729          -        5,595           599        20,082
                                    ------   --------    -----     -------     ------     --------       -------      --------
Balance at June 30, 2001            27,016   $303,323    1,307     $20,341     10,030     $(32,699)      $11,441      $302,406
                                    ======   ========    =====     =======     ======     ========       =======      ========

                See notes to consolidated financial statements.

                                       6

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

Note 1 -- Organization and Accounting Policies

     We are a Delaware limited partnership that was formed in September, 1998
to acquire and operate the midstream crude oil business and assets of Plains
Resources Inc. and its wholly owned subsidiaries. On November 23, 1998, we
completed our initial public offering and the transactions whereby we became the
successor to the business of the midstream subsidiaries of Plains Resources. Our
operations are conducted through Plains Marketing, L.P., All American Pipeline,
L.P. and Plains Marketing Canada, L.P. The terms "Plains All American" and the
"Partnership" herein refer to Plains All American Pipeline, L.P. and its
affiliated operating partnerships. We are engaged in interstate and intrastate
transportation, marketing, and terminalling of crude oil. Our operations are
conducted primarily in Texas, California, Oklahoma, Louisiana, the Gulf of
Mexico and the Canadian Provinces of Alberta and Saskatchewan.

     The accompanying financial statements and related notes present our
consolidated financial position as of June 30, 2001 and December 31, 2000; the
results of our operations for the three and six months ended June 30, 2001 and
2000; cash flows for the six months ended June 30, 2001 and 2000; and changes in
partners' capital for the six months ended June 30, 2001. The financial
statements have been prepared in accordance with the instructions to interim
reporting as prescribed by the Securities and Exchange Commission ("SEC"). All
adjustments consisting only of normal recurring adjustments that, in the opinion
of management, were necessary for a fair statement of the results for the
interim periods, have been reflected. All significant intercompany transactions
have been eliminated. Certain reclassifications have been made to prior period
amounts to conform with current period presentation. The results of operations
for the three and six months ended June 30, 2001 should not be taken as
indicative of the results to be expected for the full year. The interim
financial statements should be read in conjunction with our consolidated
financial statements and notes thereto presented in our 2000 Annual Report on
Form 10-K.

Note 2 -- Transfer of Our General Partner

     On June 8, 2001, Plains All American Inc., our former general partner and a
wholly owned subsidiary of Plains Resources Inc., sold a portion of its
ownership in our partnership to an investor group including, among others,
affiliates of Kayne Anderson Capital Advisors, EnCap Investments, Strome
Investment Management, James C. Flores and our current management for aggregate
consideration of approximately $155.2 million.

     In connection with this transaction, a new entity jointly owned by the
investor group and Plains Resources Inc. became our general partner and assumed
all of the general partner's rights and obligations under our partnership
agreement. The investor group purchased approximately 5.2 million subordinated
units from an affiliate of Plains Resources Inc.  As a result of this
transaction and our recent equity offering, Plains Resources' effective
ownership in us has been reduced to approximately 33% from approximately 54%.
Plains Resources has agreed to make available to our management group an
additional 2% of the general partner interest on substantially the same terms as
the other investors.

Note 3 -- Equity Offering

     On May 31, 2001, we completed a public offering of 3,750,000 common units.
Additionally, on June 22, 2001, we issued another 216,700 units pursuant to the
underwriter's overallotment option. Total net cash proceeds from the offering
(which aggregates to 3,966,700 units), including our general partner's
proportionate contribution, were approximately $100.7 million and were used to
repay borrowings under our revolving credit facility, a portion of which were
used to finance the Murphy Acquisition (see Note 6).

Note 4 -- Derivative Instruments and Hedging Activities

     On January 1, 2001, we adopted Statement of Financial Accounting Standards
("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging Activities"
as amended by SFAS 137 and SFAS 138.  Under SFAS 133, all derivative instruments
are recorded on the balance sheet at fair value.  If the derivative does not
qualify as a hedge or is not designated as a hedge, the gain or loss on the
derivative is recognized currently in earnings. To qualify for hedge accounting,
the derivative must qualify either as a fair value hedge, cash flow hedge or
foreign currency hedge.  As of June 30, 2001, our transactions consisted of only
cash flow and foreign currency hedges (which are defined as fair value hedges)
and the remaining discussion will relate exclusively to these types of
derivative instruments.  If the derivative qualifies for cash flow hedge
accounting, the gain or loss on the derivative is deferred in accumulated Other
Comprehensive Income ("OCI"), a

                                       7

component of Partners' Capital, to the extent the hedge is effective. Fair
value hedge gains or losses are taken directly to earnings in the current
period.

     The relationship between the hedging instrument and the hedged item must be
highly effective in achieving the offset of changes in cash flows attributable
to the hedged risk both at the inception of the contract and on an ongoing
basis.  Hedge accounting is discontinued prospectively when a hedge instrument
becomes ineffective. Gains and losses deferred in OCI related to cash flow
hedges that become ineffective remain unchanged until the related product is
delivered.  If it is determined that it is probable that a hedged forecasted
transaction will not occur, deferred gains or losses on the hedging instrument
are recognized in earnings immediately.

     Gains and losses on hedging instruments related to OCI and adjustments to
carrying amounts on hedged volumes are included in revenues in the period that
the related volumes are delivered.  Gains and losses of hedging instruments,
which represent hedge ineffectiveness, are included in earnings in the period in
which they occur.

     We utilize various derivative instruments, for purposes other than trading,
to hedge our exposure to price fluctuations on crude in storage and expected
purchases, sales and transportation of crude oil. The derivative instruments
consist primarily of futures and option contracts traded on the New York
Mercantile Exchange. We also utilize interest rate collars to manage the
interest rate exposure on our long-term debt and foreign currency hedges to
manage exchange rate exposure.

     On January 1, 2001, in accordance with the transition provisions of SFAS
133, we recorded a loss of $8.3 million in OCI representing the cumulative
effect of an accounting change to recognize at fair value all cash flow
derivatives. We also recorded a noncash gain of $0.5 million in earnings as a
cumulative effect adjustment.

     At June 30, 2001, a $5.8 million unrealized loss was recorded to OCI
together with related assets and liabilities of $6.9 million and $12.9 million,
respectively. Earnings included a non-cash gain of $0.2 million related to the
ineffective portion of our cash flow hedges, as well as the gain/loss on our
fair value hedges (included in revenues in the income statement). Our
hedge-related assets and liabilities are included in other current assets and
other current liabilities in the balance sheet.

     As of June 30, 2001, the total amount of deferred net losses on derivative
instruments recorded in OCI are expected to be reclassified to earnings during
the next twelve-month period.  At June 30, 2001 we had the following open crude
oil hedge positions:

                                  2001                    2002
                           ------------------     -------------------
                           3rd Qtr    4th Qtr     1st Qtr     2nd Qtr
                           -------    -------     -------     -------
Volume (bbls)
 Short positions          812,000           -           -           -
 Long positions                 -     762,000     132,000     250,000
Average price ($/bbl)      $25.13      $26.84      $27.28      $25.56

At June 30, 2001, we had an interest rate collar arrangement to protect interest
rate fluctuations on a portion of our outstanding debt for an aggregate notional
principal amount of $125.0 million. This instrument is based on LIBOR rates and
provides for a floor of 6.1% and a ceiling of 8.0% with an expiration date of
August 2002.

     During the second quarter of 2001, gains of $.5 million were relieved from
OCI and the fair value of open positions decreased $2.7 million. Additionally,
certain derivative positions were terminated prior to maturity.  As such, a $5.8
million loss related to all positions (open and closed hedges) was recorded in
OCI at June 30, 2001.

     We formally document all relationships between hedging instruments and
hedged items, as well as our risk management objectives and strategy for
undertaking the hedge. Hedge effectiveness is measured on a quarterly basis.
This process includes specific identification of the hedging instrument and the
hedge transaction, the nature of the risk being hedged and how the hedging
instrument's effectiveness will be assessed.  Both at the inception of the hedge
and on an ongoing basis, we assess whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in cash flows of
hedged items. No amounts were excluded from the computation of hedge
effectiveness.

Note 5 -- Comprehensive Income

     Comprehensive income includes net income and certain items recorded
directly to Partners' Capital and classified as OCI. Following the adoption of
SFAS 133, we recorded a charge to OCI of $8.3 million related to the change in
fair value

                                       8

of certain derivative financial instruments that qualified for cash flow hedge
accounting. The following table reflects comprehensive income for the six months
ended June 30, 2001 (in thousands of dollars):

Total Comprehensive Income at January 1, 2001             $     -

 Cumulative effect of change in accounting principle       (8,337)
 Reclassification adjustment for settled contracts          6,791
 Changes in fair value of open hedging positions           (4,340)
 Currency translation adjustment                               48
                                                          -------
Other Comprehensive Income at June 30, 2001                (5,838)

 Net income for the six months ended June 30, 2001         20,082
                                                          -------
Total Comprehensive Income at June 30, 2001               $14,244
                                                          =======

Note 6 -- Acquisitions

     Murphy Oil Company Ltd. Midstream Operations

     In May 2001, we closed the acquisition of substantially all of the crude
oil pipeline, gathering, storage and terminalling assets of Murphy Oil Company
Ltd. for approximately $161 million in cash ("the Murphy Acquisition"),
including financing and transaction costs. The purchase included $7.2 million
for excess inventory in the pipeline systems. The principal assets acquired
include approximately 450 miles of crude oil and condensate transmission
mainlines and associated gathering and lateral lines, approximately 1.1 million
barrels of crude oil storage and terminalling capacity located primarily in
Kerrobert, Saskatchewan, approximately 200,000 barrels of pipeline linefill, an
inactive 108-mile mainline system and 121 trailers used primarily for crude oil
transportation. We have reactivated the 108-mile mainline system and began
shipping volumes in May of 2001.

     Murphy has agreed to continue to transport production from fields
previously delivering crude oil to these pipeline systems, under a new long-term
contract. The current volume is approximately 11,000 barrels per day. The
pipeline systems transport approximately 200,000 barrels per day of light,
medium and heavy crudes, as well as condensate.

     The Murphy Acquisition has been accounted for using the purchase method of
accounting and the purchase price was allocated in accordance with Accounting
Principles Board Opinion No. 16, Business Combinations, ("APB 16") as follows
(in thousands):

Crude oil pipeline, gathering and terminal assets       $150,182
Pipeline linefill                                          7,602
Net working capital items                                  1,953
Other property and equipment                                 487
Other assets, including debt issue costs                     360
                                                        --------
Total                                                   $160,584
                                                        ========

Pro Forma Results for the Murphy Acquisition

     The following unaudited pro forma data is presented to show pro forma
revenues, net income and basic and diluted net income per limited partner unit
for the partnership as if the Murphy Acquisition and the equity offering
discussed in Note 3 had occurred on January 1, 2000 (in thousands):

                                       9

                                               SIX MONTHS
                                              ENDED JUNE 30,
                                            ----------------
                                            2001        2000
                                            ----        ----
Revenues                                $3,268,006    $3,819,106
                                        ==========    ==========
Income before extraordinary item
 and cumulative effect of accounting
 change                                 $   23,629    $   83,468
                                        ==========    ==========

Net income                              $   24,137    $   68,321
                                        ==========    ==========

Basic and diluted income before
 extraordinary item and cumulative
 effect of accounting change per
 limited partner unit                   $     0.65    $     2.38
                                        ==========    ==========
Basic and diluted net income
 per limited partner unit               $     0.67    $     1.94
                                        ==========    ==========

CANPET Energy Group Inc.

     In July 2001, we acquired the assets of CANPET Energy Group Inc.
("CANPET"), a Calgary-based Canadian crude oil and liquefied petroleum gas
marketing company, for approximately $42.0 million plus excess inventory at the
closing date of approximately $25 million. Approximately $24.0 million of the
purchase price, plus the excess inventory, was paid in cash at closing and the
remainder, which is subject to certain performance standards, will be paid in
common units in April 2004 if such standards are met. CANPET activities include
gathering approximately 75,000 barrels per day of crude oil and marketing
approximately 26,000 barrels per day of natural gas liquids. Tangible assets
include a crude oil handling facility, a 130,000-barrel tank facility and
working capital of approximately $8.6 million. Financing for the acquisition was
provided through borrowings under our bank credit facility.

Note 7 -- Credit Agreements

     In May 2001, we entered into new amended and restated credit facilities
that replaced our existing credit facilities. Our credit facilities currently
consist of:

 .  a $630.0 million senior secured revolving credit and term loan facility,
   which is secured by substantially all of our assets. The facility consists of
   a $500.0 million domestic revolving facility (with a $10.0 million letter of
   credit sublimit), a $30.0 million Canadian revolving facility (with a $5.0
   million letter of credit sublimit) and a $100.0 million term loan. The
   facility matures, as to the aggregate $530.0 million domestic and Canadian
   revolver portions, in April, 2005 and, as to the $100.0 million term portion,
   in May, 2006. On the revolver portions, no principal is scheduled for payment
   prior to maturity; however, if we issue privately-placed or public debt, the
   net proceeds of such debt must be used to repay then-outstanding loans under
   the domestic revolver, and with the repayment and depending on the amount of
   net proceeds, the domestic revolver commitment will be reduced by 40% to 50%
   of its original amount. The term portion of this facility has four scheduled
   annual payments of principal, commencing May 4, 2002, in the respective
   amounts of 1%, 7%, 8% and 8% of the original term principal amount, with the
   remaining principal balance scheduled for payment on the stated maturity date
   of May 5, 2006. If any part of the term portion is prepaid prior to its first
   anniversary, a 1% premium will be due on that portion. The revolving credit
   and term loan facility bears interest at our option at either the base rate,
   as defined, plus an applicable margin, or LIBOR plus an applicable margin,
   and further, the Canadian revolver may effectively bear interest based upon
   bankers' acceptance rates. We incur a commitment fee on the unused portion of
   the revolver portion of this credit facility.

 .  A $200.0 million senior secured letter of credit and borrowing facility, the
   purpose of which is to provide standby letters of credit to support the
   purchase and exchange of crude oil and other specified petroleum products for
   resale and borrowings to finance crude oil inventory and other specified
   petroleum products that have been hedged against future price risk. The
   letter of credit facility is secured by substantially all of our assets and
   has a sublimit for cash borrowings of $100.0 million to purchase crude oil
   and other petroleum products that have been hedged against future price risk
   and to fund margin requirements under NYMEX contracts used to facilitate our
   hedging activities. The letter of credit facility expires in April, 2004.
   Aggregate availability under the letter of credit facility for direct
   borrowings and letters of credit is limited to a borrowing base that is
   determined monthly based on certain of our current assets and current
   liabilities, primarily inventory and accounts receivable and accounts payable
   related to the purchase and sale of crude oil and other specified petroleum
   products.

                                       10

     Our credit facilities prohibit distributions on, or purchases or
redemptions of, units if any default or event of default is continuing. In
addition, the agreements contain various covenants limiting our ability to,
among other things:

 . incur indebtedness;
 . grant liens;
 . sell assets;
 . make investments;
 . engage in transactions with affiliates;
 . enter into prohibited contracts; and
 . enter into a merger or consolidation.

     Our credit facilities treat a change of control as an event of default and
also require us to maintain:

 . a current ratio (as defined) of 1.0 to 1.0;

 . a debt coverage ratio which is not greater than 4.75 to 1.0 through September
  29, 2001, 4.50 to 1 from September 30, 2001 through June 29, 2002, 4.25 to 1.0
  from June 30, 2002 through December 30, 2002 and 4.0 to 1.0 thereafter;

 . an interest coverage ratio which is not less than 2.75 to 1.0; and

 . a debt to capital ratio of not greater than 0.73 to 1.0 prior to December 31,
  2002 and 0.65 to 1.0 thereafter.

     A default under our credit facilities would permit the lenders to
accelerate the maturity of the outstanding debt and to foreclose on the assets
securing the credit facilities. As long as we are in compliance with our
commercial credit agreements, they do not restrict our ability to make
distributions of "available cash" as defined in our partnership agreement. We
are currently in compliance with the covenants contained in our credit
agreements.

Note 8 -- Distributions

     On February 14, 2001 we paid a cash distribution of $0.4625 per unit on our
outstanding common units, Class B units and subordinated units. The distribution
was paid to unitholders of record on February 7, 2001 for the period October 1,
2000 through December 31, 2000. The total distribution paid was approximately
$16.3 million, with approximately $7.5 million paid to our public unitholders
and the remainder paid to our prior general partner for its limited and general
partner interests. The distribution was in excess of the minimum quarterly
distribution specified in the Partnership Agreement.

     On May 15, 2001, we paid a cash distribution of $0.475 per unit on our
outstanding common units, Class B units and subordinated units. The distribution
was paid to unitholders of record on May 3, 2001 for the period January 1, 2001
through March 31, 2001. The total distribution paid was approximately $16.8
million, with approximately $7.7 million paid to our public unitholders and the
remainder to our prior general partner for its limited and general partner
interests.

     On July 24, 2001 we declared a cash distribution of $0.50 per unit on our
outstanding common units, Class B units and subordinated units. The distribution
is payable on August 14, 2001 to holders of record on August 3, 2001.  The total
distribution to be paid is approximately $19.9 million, with approximately $13.5
million to be paid to our common unitholders, $0.7 million to our Class B common
unitholders, $5.0 million to our subordinated unitholders, and the remainder to
be paid to our general partner for its general partner interests.

Note 9 -- Operating Segments

     Our operations consist of two operating segments: (1) Pipeline Operations -
engages in interstate and intrastate crude oil pipeline transportation and
related merchant activities; and (2) Gathering, Marketing, Terminalling and
Storage Operations - engages in purchases and resales of crude oil at various
points along the distribution chain and the leasing of terminalling and storage
facilities.

                                       11

                                                                                    MARKETING,
                                                                                    GATHERING,
                                                                                   TERMINALLING
(IN THOUSANDS) (UNAUDITED)                                       PIPELINE           & STORAGE       TOTAL
- -------------------------------------------------------------------------------------------------------------
                                                                                            
THREE MONTHS ENDED JUNE 30, 2001
Revenues:
 External Customers                                            $  91,815         $ 1,494,802    $ 1,586,617
 Intersegment (a)                                                  5,166               1,245          6,411
 Other revenue                                                         -                 325            325
                                                               ---------         -----------    -----------
  Total revenues of reportable segments                        $  96,981         $ 1,496,372    $ 1,593,353
                                                               =========         ===========    ===========
Segment gross margin (b)                                       $  18,699         $    17,688    $    36,387
Segment gross profit (c)                                          17,668               9,298         26,966
Income allocated to reportable segments (d)                       10,929               1,758         12,687
Noncash compensation expense                                     n/a                n/a               5,620
                                                               ---------         -----------    -----------
Income before extraordinary item and cumulative effect
 of accounting change                                            n/a                n/a         $     7,067
                                                               =========         ===========    ===========
Total assets                                                     451,887             761,945      1,213,832
- -------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, 2000
Revenues:
 External Customers                                            $ 106,520         $ 1,375,314    $ 1,481,834
 Intersegment (a)                                                  6,083                   -          6,083
 Other                                                             2,706                 343          3,049
                                                               ---------         -----------    -----------
  Total revenues of reportable segments                        $ 115,309         $ 1,375,657    $ 1,490,966
                                                               =========         ===========    ===========
Gain on sale of assets
Segment gross margin (b)                                       $  12,759         $    20,015    $    32,774
Segment gross profit (c)                                          12,093              12,732         24,825
Income allocated to reportable segments                           10,718               6,345         17,063
Noncash compensation expense                                     n/a                n/a                   -
                                                               ---------         -----------    -----------
Income before extraordinary item and cumulative
 effect of accounting change                                     n/a                n/a         $    17,063
                                                               =========         ===========    ===========
Total assets                                                     319,558             499,750        819,308
- -------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2001
Revenues:
 External Customers                                            $ 179,853         $ 2,926,888    $ 3,106,741
 Intersegment (a)                                                  8,475               1,245          9,720
 Other revenue                                                         -                 367            367
                                                               ---------         -----------    -----------
  Total revenues of reportable segments                        $ 188,328         $ 2,928,500   $ 3,116,828
                                                               =========         ===========    ===========
Segment gross margin (b)                                       $  32,591         $    36,526    $    69,117
Segment gross profit (c)                                          31,100              19,728         50,828
Income allocated to reportable segments (d)                       20,979               4,336         25,315
Noncash compensation expense                                     n/a                n/a               5,741
                                                               ---------         -----------    -----------
Income before extraordinary item and cumulative effect
 of accounting change                                             n/a                n/a         $    19,574
                                                               =========         ===========    ===========
Total assets                                                     451,887             761,945      1,213,832
- -------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2000
Revenues:
 External Customers                                            $ 286,578         $ 3,197,763    $ 3,484,341
 Intersegment (a)                                                 60,498                   -         60,498
 Other                                                             9,679                 852         10,531
                                                               ---------         -----------    -----------
  Total revenues of reportable segments                        $ 356,755         $ 3,198,615    $ 3,555,370
                                                               =========         ===========    ===========

Gain on sale of assets                                         $  48,188         $         -    $    48,188
Segment gross margin (b)                                          25,914              43,412         69,326
Segment gross profit (c)                                          24,291              28,591         52,882
Income allocated to reportable segments (d)                       73,105               8,389         81,494
Noncash compensation expense                                     n/a                n/a                 131
                                                               ---------         -----------    -----------
Income before extraordinary item and cumulative effect
 of accounting change                                            n/a                n/a         $    81,363
                                                               =========         ===========    ===========
Total assets                                                     319,558             499,750        819,308
- -------------------------------------------------------------------------------------------------------------

                                       12

a) Intersegment sales were conducted on an arm's length basis.
b) Gross margin is calculated as revenues less cost of sales and operations
   expenses.
c) Gross profit is calculated as revenues less costs of sales and operations
   expenses and general and administrative expenses, excluding noncash
   compensation expense.
d) Excludes noncash compensation expense, as it is not allocated to the
   reportable segments.

Note 10 -- Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141 "Business Combinations"
("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142").
SFAS 141 requires all business combinations initiated after June 30, 2001, to be
accounted for under the purchase method.  For all business combinations for
which the date of acquisition is after June 30, 2001, this Standard also
establishes specific criteria for the recognition of intangible assets
separately from goodwill and requires unallocated negative goodwill to be
written off immediately as an extraordinary gain, rather than deferred and
amortized.  SFAS 142 changes the accounting for goodwill and other intangible
assets after an acquisition.  The most significant changes made by SFAS 142 are:
1) goodwill and intangible assets with indefinite lives will no longer be
amortized; 2) goodwill and intangible assets with indefinite lives must be
tested for impairment at least annually; and 3) the amortization period for
intangible assets with finite lives will no longer be limited to forty years.
At this time, we cannot reasonably estimate the effect of the adoption of this
statement on either our financial position, results of operations, or cash
flows.

     We will account for all future business combinations, including the CANPET
acquisition, under SFAS 141.  Effective January 1, 2002, we will adopt SFAS 142,
as required.  At that time, amortization will cease on the unamortized portion
of the goodwill arising from the Scurlock acquisition.

     In June 2001, the FASB also approved for issuance SFAS 143 "Asset
Retirement Obligations".  SFAS 143 establishes accounting requirements for
retirement obligations associated with tangible long-lived assets, including (1)
the timing of the liability recognition, (2) initial measurement of the
liability, (3) allocation of asset retirement cost to expense, (4) subsequent
measurement of the liability and (5) financial statement disclosures.  SFAS 143
requires that an asset retirement cost should be capitalized as part of the cost
of the related long-lived asset and subsequently allocated to expense using a
systematic and rational method.  We will adopt the statement effective January
1, 2003, as required.  The transition adjustment resulting from the adoption of
SFAS 143 will be reported as a cumulative effect of a change in accounting
principle.  At this time, we cannot reasonably estimate the effect of the
adoption of this statement on either our financial position, results of
operations, or cash flows.

Note 11 -- Contingencies

     During 1997, the All American Pipeline experienced a leak in a segment of
its pipeline in California that resulted in an estimated 12,000 barrels of crude
oil being released into the soil. Immediate action was taken to repair the
pipeline leak, contain the spill and to recover the released crude oil. We have
expended approximately $400,000 to date in connection with this spill.  We do
not expect additional costs related to this site to exceed $350,000, although we
can provide no assurances in that regard.

     Prior to being acquired by our predecessor in 1996, the Ingleside Terminal
experienced releases of refined petroleum products into the soil and groundwater
underlying the site due to activities on the property. We are undertaking a
voluntary state-administered remediation of the contamination on the property.
We have spent approximately $145,000 to date in investigating the contamination
at this site. We do not anticipate the total additional costs related to this
site to exceed $250,000, although no assurance can be given that the actual cost
could not exceed such estimate. In addition, a portion of any such costs may be
reimbursed to us from Plains Resources.

     Litigation

     Texas Securities Litigation. On November 29, 1999, a class action lawsuit
was filed in the United States District Court for the Southern District of Texas
entitled Di Giacomo v. Plains All American Pipeline, L.P., et al. The suit
alleged that Plains All American and certain of the officers and directors of
Plains All American Inc. (our general partner at the time) violated federal
securities laws, primarily in connection with unauthorized trading by a former
employee. An additional

                                       13

nineteen cases were filed in the Southern District of Texas, some of which name
Plains All American Inc. and Plains Resources as additional defendants. All of
the federal securities claims have been consolidated into two actions. The first
consolidated action is that filed by purchasers of Plains Resources' common
stock and options, and is captioned Koplovitz v. Plains Resources Inc., et al.
The second consolidated action is that filed by purchasers of our common units,
and is captioned Di Giacomo v. Plains All American Pipeline, L.P., et al.
Plaintiffs alleged that the defendants were liable for securities fraud
violations under Rule 10b-5 and Section 20(a) of the Securities Exchange Act of
1934 and for making false registration statements under Sections 11 and 15 of
the Securities Act of 1933.

     We and Plains Resources reached an agreement with representatives for the
plaintiffs for the settlement of all of the class actions, and in January 2001,
we deposited approximately $30.0 million under the terms of the settlement
agreement. The total cost of the settlement to us and Plains Resources,
including interest and expenses and after insurance reimbursements, was $14.9
million. Of that amount, $1.0 million was allocated to Plains Resources by
agreement between special independent committees of the board of directors of
Plains All American Inc. and the board of directors of Plains Resources. The
settlement is subject to final approval by the court. The settlement agreement
does not affect the Texas Derivative Litigation and Delaware Derivative
Litigation described below.

     Delaware Derivative Litigation. On December 3, 1999, two derivative
lawsuits were filed in the Delaware Chancery Court, New Castle County, entitled
Susser v. Plains All American Inc., et al and Senderowitz v. Plains All American
Inc., et al. These suits, and three others which were filed in Delaware
subsequently, named Plains All American Inc., its directors and certain of its
officers as defendants, and allege that the defendants breached the fiduciary
duties that they owed to Plains All American Pipeline, L.P. and its unitholders
by failing to monitor properly the activities of its employees. The court has
consolidated all of the cases under the caption In Re Plains All American Inc.
Shareholders Litigation, and has designated the complaint filed in Susser v.
Plains All American Inc. as the complaint in the consolidated action. A motion
to dismiss was filed on behalf of the defendants on August 11, 2000.

     The plaintiffs in the Delaware derivative litigation seek that the
defendants

     . account for all losses and damages allegedly sustained by Plains All
       American from the unauthorized trading losses;

     . establish and maintain effective internal controls ensuring that our
       affiliates and persons responsible for our affairs do not engage in
       wrongful practices detrimental to Plains All American;

     . pay for the plaintiffs' costs and expenses in the litigation, including
       reasonable attorneys' fees, accountants' fees and experts' fees; and

     . provide the plaintiffs any additional relief as may be just and proper
       under the circumstances.

     We have reached an agreement in principle with the plaintiffs, subject to
approval by the Delaware court, to settle the Delaware litigation for
approximately $1.1 million.

     Texas Derivative Litigation. On July 11, 2000, a derivative lawsuit was
filed in the United States District Court of the Southern District of Texas
entitled Fernandes v. Plains All American Inc., et al, naming Plains All
American Inc., its directors and certain of its officers as defendants. This
lawsuit contains the same claims and seeks the same relief as the Delaware
derivative litigation, described above. A motion to dismiss was filed on behalf
of the defendants on August 14, 2000.

     We intend to vigorously defend the claims made in the Texas derivative
litigation. We believe that Delaware court approval of the settlement of the
Delaware derivative litigation will effectively preclude prosecution of the
Texas derivative litigation. However, there can be no assurance that we will be
successful in our defense or that this lawsuit will not have a material adverse
effect on our financial condition, results of operation, or cash flows.

     We, in the ordinary course of business, are a claimant and/or a defendant
in various other legal proceedings. Management does not believe that the outcome
of these other legal proceedings, individually and in the aggregate, will have a
materially adverse effect on our financial condition, results of operations or
cash flows.

                                       14

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     We are a Delaware limited partnership that was formed in September of 1998
to acquire and operate the midstream crude oil business and assets of Plains
Resources Inc. and its wholly owned subsidiaries. On November 23, 1998, we
completed our initial public offering and the transactions whereby we became the
successor to the business of the midstream subsidiaries of Plains Resources. Our
operations are conducted through Plains Marketing, L.P., All American Pipeline,
L.P. and Plains Marketing Canada, L.P. We are engaged in interstate and
intrastate transportation marketing, and terminalling of crude oil. Our
operations are conducted primarily in Texas, California, Oklahoma, Louisiana,
the Gulf of Mexico and the Canadian Provinces of Alberta and Saskatchewan.

     Pipeline Operations. Our activities from pipeline operations generally
consist of transporting third-party volumes of crude oil for a tariff and
merchant activities designed to capture price differentials between the cost to
purchase and transport crude oil to a sales point and the price received for
such crude oil at the sales point. Tariffs on our pipeline systems vary by
receipt point and delivery point. The gross margin generated by our tariff
activities depends on the volumes transported on the pipeline and the level of
the tariff charged, as well as the fixed and variable costs of operating the
pipeline. Our ability to generate a profit on margin activities is not tied to
the absolute level of crude oil prices but is generated by the difference
between an index-related price paid and other costs incurred in the purchase of
crude oil and an index-related price at which we sell crude oil. We are well
positioned to take advantage of these price differentials due to our ability to
move purchased volumes on our pipeline systems. We combine reporting of gross
margin for tariff activities and margin activities due to the sharing of fixed
costs between the two activities.

     Terminalling and Storage Activities and Gathering and Marketing Activities.
Gross margin from terminalling and storage activities is dependent on the
throughput volume of crude oil stored and the level of fees generated at our
terminalling and storage facilities. Gross margin from our gathering and
marketing activities is dependent on our ability to sell crude oil at a price in
excess of our aggregate cost. These operations are not directly affected by the
absolute level of crude oil prices, but are affected by overall levels of supply
and demand for crude oil and fluctuations in market related indices.

Recent Events

     Strategic Transaction Involving General Partner. On June 8, 2001, Plains
All American Inc., our former general partner and a wholly owned subsidiary of
Plains Resources Inc., sold a portion of its ownership in our partnership to an
investor group including, among others, affiliates of Kayne Anderson Capital
Advisors, EnCap Investments, Strome Investment Management, James C. Flores and
our current management for aggregate consideration of approximately $155.2
million.

     In connection with this transaction, a new entity jointly owned by the
investor group and Plains Resources Inc. became our general partner and assumed
all of the general partner's rights and obligations under our partnership
agreement. The investor group purchased approximately 5.2 million subordinated
units from an affiliate of Plains Resources Inc.  As a result of this
transaction and our recent equity offering, Plains Resources' effective
ownership in us has been reduced to approximately 33% from approximately 54%.
Plains Resources has agreed to make available for sale to our management group
an additional 2% of the general partner interest on substantially the same terms
as the other investors.

     Murphy Oil Company Ltd. Midstream Operations. In May 2001, we closed the
acquisition of substantially all of the crude oil pipeline, gathering, storage
and terminalling assets of Murphy Oil Company Ltd. for approximately $161
million in cash (the "Murphy Acquisition"), including financing and transaction
costs.  The purchase included $7.2 million for excess inventory in the pipeline
systems.  The principal assets acquired include approximately 450 miles of crude
oil and condensate transmission mainlines and associated gathering and lateral
lines, approximately 1.1 million barrels of crude oil storage and terminalling
capacity located primarily in Kerrobert, Saskatchewan, approximately 200,000
barrels of linefill, an inactive 108-mile mainline system and 121
trailers used primarily for crude oil transportation.  We have reactivated the
108-mile mainline system and began shipping volumes in May of 2001.

     Murphy has agreed to continue to transport production from fields currently
delivering crude oil to these pipeline systems, under a new long-term contract.
The current volume is approximately 11,000 barrels per day. The pipeline systems
transport approximately 200,000 barrels per day of light, medium and heavy
crudes, as well as condensate.

                                       15

     CANPET Energy Group Inc.  In July 2001, we acquired the assets of CANPET
Energy Group Inc. ("CANPET") a Calgary based Canadian crude oil and liquefied
petroleum gas marketing company, for approximately $42.0 million plus excess
inventory at the closing date of approximately $25 million. Approximately $24.0
million of the purchase price, plus the excess inventory, was paid in cash at
closing and the remainder which is subject to certain performance standards will
be paid in common units in April, 2004, if such standards are met. CANPET
activities include gathering approximately 75,000 barrels per day of crude oil
and marketing approximately 26,000 barrels per day of natural gas liquids.
Tangible assets include a crude oil handling facility, a 130,000-barrel tank
facility and working capital of approximately $8.6 million. Financing for the
acquisition was provided through borrowings under our bank credit facility.

Results of Operations

Three Months Ended June 30, 2001 and 2000

     For the three months ended June 30, 2001, we reported net income of $7.1
million on total revenue of $1.6 billion compared to net income for the same
period in 2000 of $6.1 million on total revenues of $1.5 billion. The results
for the three months ended June 30, 2001 and 2000 include the following unusual
items:

     2001
     .  a $6.0 million charge associated with the vesting of phantom partnership
        units as a result of the sale by our former general partner of a portion
        of its general partner interest. $5.6 million of the charge was noncash
        and was satisfied by units owned by our former general partner. This
        portion of the charge had no impact on equity or the number of
        outstanding units as it was offset by a deemed capital contribution by
        our former general partner and the units were satisfied by units owned
        by our former general partner.

     2000
     .  an extraordinary loss of $11.0 million related to the refinancing of our
        credit agreements, and
     .  $2.9 million of previously deferred gains on interest rate swap
        terminations recognized due to the early extinguishment of debt.

     Excluding these unusual items, we would have reported net income of $13.1
million and $14.2 million for the three months ended June 30, 2001 and 2000,
respectively.

     The following table sets forth our operating results for the periods
indicated and includes the impact of these unusual items discussed above (in
thousands) (unaudited):

                                       16

                                                             THREE MONTHS ENDED
                                                                  JUNE 30,
                                                           ---------------------
                                                           2001             2000
                                                           ----             ----
                                                                     
OPERATING RESULTS:
 Revenues                                             $ 1,586,617      $ 1,481,834
                                                      ===========      ===========
 Gross margin:
  Pipeline                                            $    18,699      $    12,759
  Gathering and marketing
    and terminalling and storage                           17,688           20,015
                                                      -----------      -----------
    Total                                                  36,387           32,774
 General and administrative expense                       (15,041)          (7,949)
                                                      -----------      -----------
 Gross profit                                         $    21,346      $    24,825
                                                      ===========      ===========
 Net income                                           $     7,067      $     6,061
                                                      ===========      ===========
AVERAGE DAILY VOLUMES (BARRELS):
 Pipeline Activities:
  All American
    Tariff activities                                          68               74
    Margin activities                                          56               57
  Canada                                                      210                -
  Other                                                       152              118
                                                      -----------      -----------
  Total                                                       486              249
                                                      ===========      ===========
 Lease gathering                                              322              237
 Bulk purchases                                                17               26
                                                      -----------      -----------
  Total                                                       339              263
                                                      ===========      ===========
 Terminal throughput                                          151               61
                                                      ===========      ===========
Storage leased to third parties,
 monthly average volumes                                    2,427            1,953
                                                      ===========      ===========

     Revenues. Revenues increased to $1.59 billion for the second quarter of
2001 compared to the 2000 second quarter amount of $1.48 billion. The increase
is primarily attributable to the Murphy Acquisition. The impact on revenues from
the increase in volumes from the Murphy Acquisition, as well as the increase in
our domestic lease volumes, were offset by lower crude oil prices.

     Cost of Sales and Operations. Cost of sales and operations increased to
$1.55 billion in the second quarter of 2001 compared to $1.45 billion in the
same quarter of 2000, primarily due to the reasons discussed above under
"Revenues".

     General and Administrative. General and administrative expenses were $15.0
million for the quarter ended June 30, 2001, compared to $7.9 million for the
second quarter in 2000. The increase in 2001 is predominantly due to a $5.6
million noncash charge and $0.4 million cash charge related to the vesting of
phantom partnership units, as well as expenses incurred as a result of the
Murphy Acquisition.

     Depreciation and Amortization. Depreciation and amortization expense was
$6.5 million for the quarter ended June 30, 2001, compared to $4.7 million for
the second quarter of 2000.  The majority of this increase is due to the Murphy
Acquisition.

     Interest expense. Interest expense was $8.1 million for the quarter ended
June 30, 2001, compared to $6.2 million for the 2000 quarter. The increase is
primarily due to the increase in debt levels in the second quarter as a result
of the net effect of the Murphy Acquisition and the proceeds from the issuance
of common units as well as lower interest rates. Interest expense was
approximately $6.6 million in the first quarter of 2001.

     Early extinguishment of debt. During the quarter ended June 30, 2000, we
recognized an extraordinary loss, consisting primarily of unamortized debt issue
costs totaling $11.0 related to the refinancing or our credit facilities. In
addition, interest and other income for the second quarter 2000 includes $2.9
million of previously deferred gains from terminated interest rate swaps as a
result of the debt extinguishment.

                                       17

     Segment Results

     Pipeline Operations. Gross margin from pipeline operations increased 47% to
$18.7 million for the quarter ended June 30, 2001 from $12.8 million for the
prior year quarter. Increased margins from the Murphy Acquisition, a 10%
increase in the tariff rate on the All American Pipeline, as well as increased
volumes on the Scurlock and West Texas gathering systems were all contributing
factors in the increase. These increases were partially offset by increased fuel
and power expenses.

     Average daily volumes on our pipelines during the second quarter of this
year were 486,000 barrels per day compared to 249,000 barrels per day last year.
The 237,000 barrel per day increase includes increases of 210,000 barrels per
day due to the Murphy Acquisition and 27,000 barrels per day on our existing
pipeline systems. Tariff transport volumes on the All American Pipeline
decreased from an average of 74,000 barrels per day for the quarter ended June
30, 2000 to 68,000 barrels per day in the comparable quarter of 2001, due to a
decrease in shipments of offshore California production.

     Gathering and Marketing Activities and Terminalling and Storage Activities.
Gross margin from gathering, marketing, terminalling and storage activities was
approximately $17.7 million for the quarter ended June 30, 2001 compared to
$20.0 million in the prior year quarter.  This decrease is due to tightened
margins as a result of a contango market as well as increased operating costs
related to higher fuel and power costs.  Incremental margins from the Murphy
Acquisition partially offset the decreases discussed above.

     Total gathering volumes increased from an average of 263,000 barrels per
day in the second quarter of 2000 to approximately 339,000 barrels per day in
the current year period. Approximately half of this increase is due to the
Murphy Acquisition with the remainder coming from an acquisition of certain
facilities from Placid Oil Company in December 2000, as well as increases from
our existing domestic business units. Terminal throughput averaged approximately
151,000 barrels per day and 61,000 barrels per day in the first quarter of 2001
and 2000, respectively, primarily due to throughput arrangements with refiners
and the existence of a contango market.

Six Months Ended June 30, 2001 and 2000

     For the six months ended June 30, 2001, we reported net income of $20.1
million on total revenue of $3.1 billion, compared to a net income for the same
period in 2000 of $66.2 million on total revenues of $3.5 billion. The results
for the six months ended June 30, 2001 and 2000 include the following unusual
items:

     2001
     .  a $6.1 million charge associated with the vesting of phantom
        partnership units primarily as a result of the sale by our former
        general partner of a portion of its general partner interest. $5.7
        million of the charge was noncash and was satisfied by units owned by
        our former general partner. This portion of the charge had no impact on
        equity or the number of outstanding units as it was offset by a deemed
        capital contribution by our former general partner and the units were
        satisfied by units owned by our former general partner, and

     .  $0.5 million cumulative effect gain as a result of the adoption of
        Statement of Financial Accounting Standards No. 133, "Accounting for
        Derivative Instruments and Hedging Activities" ("SFAS 133").

     2000
     .  a $28.1 million gain on the sale of crude oil linefill;
     .  a $20.1 million gain on the sale of the segment of the All American
        Pipeline that extends from Emidio, California, to McCamey, Texas;
     .  $9.7 million of previously deferred gains on interest rate swap
        terminations recognized due to the early extinguishment of debt;
     .  an extraordinary loss of $15.1 million related to the early
        extinguishment of debt, and
     .  amortization of $4.6 million of debt issue costs associated with
        facilities put in place during the fourth quarter of 1999.

     Excluding these unusual items, we would have reported net income of $25.7
million and $28.1 million for the six months ended June 30, 2001 and 2000,
respectively.

     The following table sets forth our operating results for the periods
indicated and includes the impact of the unusual items discussed above (in
thousands) (unaudited):

                                       18

                                                         SIX MONTHS ENDED
                                                             JUNE 30,
                                                       2001           2000
                                                      ---------------------
OPERATING RESULTS:
 Revenues                                         $ 3,106,741      $ 3,484,341
                                                  ===========      ===========
 Gross margin:
  Pipeline                                        $    32,591      $    25,914
  Gathering and marketing
    and terminalling and storage                       36,526           43,412
                                                  -----------      -----------
    Total                                              69,117           69,326
 General and administrative expense                   (24,030)         (16,575)
                                                  -----------      -----------
 Gross profit                                     $    45,087      $    52,751
                                                  ===========      ===========
 Net income                                       $    20,082      $    66,216
                                                  ===========      ===========

                                                           SIX MONTHS ENDED
                                                               JUNE 30,
                                                         2001           2000
                                                         ----           ----
AVERAGE DAILY VOLUMES (BARRELS):
 Pipeline Activities:
  All American
    Tariff activities                                     69              73
    Margin activities                                     61              58
  Canada(1)                                              210               -
  Other                                                  157             116
                                                       -----           -----
  Total                                                  497             247
                                                       =====           =====
 Lease gathering                                         324             247
 Bulk purchases                                           19              28
                                                       -----           -----
  Total                                                  343             275
                                                       =====           =====
 Terminal throughput                                     143              55
                                                       =====           =====
Storage leased to third parties,
 monthly average volumes                               2,165           1,387
                                                       =====           =====
- --------
(1) Represents average daily volumes from the effective date, April 1, 2001.

     Revenues. Revenues decreased to $3.11 billion from $3.48 billion in the
first half of 2000. The decrease is primarily attributable to lower crude oil
prices, offset somewhat by higher pipeline and gathering volumes, primarily
attributable to the Murphy Acquisition.

     Cost of Sales and Operations. Cost of sales and operations decreased to
$3.04 billion from $3.42 billion in the first half of 2000, primarily due to the
reasons discussed above under "Revenues".

     General and Administrative. General and administrative expenses were $24.0
million for the six months ended June 30, 2001, compared to $16.6 million for
the same period in 2000. The increase in 2001 is primarily due to a $6.1 million
charge attributable to the vesting of phantom partnership units in the second
quarter as a result of the sale by our former general partner of a portion of
its general partner interest.  $5.7 million of the charge was noncash and was
satisfied by units owned by our former general partner.  This portion of the
charge had no impact on partner's capital or the number of outstanding units as
it was offset by a deemed capital contribution by our former general partner.

     Depreciation and Amortization. Depreciation and amortization expense was
$11.2 million for the six months ended June 30, 2001, compared to $14.8 million
for the first half of 2000. The decrease is primarily due to the increased
amortization of debt issue costs in the 2000 period associated with facilities
put in place during the fourth quarter of 1999 as a result of the unauthorized
trading losses and somewhat offset in the current year period by the
depreciation attributable to the Murphy Acquisition.

                                       19

     Interest expense. Interest expense was $14.7 million for the six months
ended June 30, 2001, compared to $15.3 million for the same period in 2000. The
decrease is due to a lower average debt balance as well as lower interest rates.

     Gain on sale of linefill. We initiated the sale of 5.2 million barrels of
crude oil linefill from the All American Pipeline in November 1999. The sale was
completed in March 2000. We recognized a gain of $28.1 million in connection
with the sale of the linefill in the first quarter of 2000.

     Gain on sale of pipeline segment. On March 24, 2000, we completed the sale
of the segment of the All American Pipeline that extends from Emidio, California
to McCamey, Texas to a unit of El Paso Energy Corporation for proceeds of
approximately $124.0 million, which are net of associated transaction costs and
estimated costs to remove certain equipment. We recognized a total gain of $20.1
million in connection with the sale in the first quarter of 2000.

     Early extinguishment of debt. During the six months ended June 30, 2000, we
recognized extraordinary losses, consisting primarily of unamortized debt issue
costs, totaling $15.1 million related to the permanent reduction of the All
American Pipeline, L.P. term loan facility and the refinancing of our credit
facilities. In addition, interest and other income for the six months ended
June 30, 2000, includes $9.7 million of previously deferred gains from
terminated interest rate swaps as a result of the debt extinguishments.

     Cumulative effect of accounting change.  During the first quarter of 2001,
we recognized a $0.5 million cumulative effect gain as a result of the adoption
of SFAS 133 effective January 1, 2001.

Segment Results

     Pipeline Operations. Gross margin from pipeline operations increased to
$32.6 million for the six months ended June 30, 2001 compared to $25.9 million
for the prior year period. Increased margins from the Murphy Acquisition, a 10%
increase in the tariff rate on the All American Pipeline, as well as increased
volumes on the Scurlock gathering systems were all contributing factors in the
increase.

     Average daily volumes on our pipelines during the first half of this year
were 497,000 barrels per day compared to 247,000 barrels per day last year. The
250,000 barrel per day increase includes increases of 210,000 barrels per day
due to the Murphy Acquisition and 40,000 barrels per day on our existing
pipeline systems. Tariff transport volumes on the All American Pipeline
decreased from an average of 73,000 barrels per day for the six months ended
June 30, 2000 to 69,000 barrels per day in the comparable period of 2001,
primarily due to a decrease in shipments of offshore California production.

     Gathering and Marketing Activities and Terminalling and Storage Activities.
Gross margin from gathering, marketing, terminalling and storage activities was
approximately $36.5 million for the six months ended June 30, 2001 compared to
$43.4 million in the prior year period.  This decrease is due to tightened
margins as a result of a contango crude market as well as increased operating
costs related to higher fuel and power costs.  Incremental margins from the
Murphy Acquisition partially offset the decreases discussed above.

     Total gathering volumes increased from an average of 275,000 barrels per
day in the first half of 2000 to approximately 343,000 barrels per day in the
current year period. Approximately half of this increase is due to the Murphy
Acquisition with the remainder coming from an acquisition of certain facilities
from Placid Oil Company in December 2000, as well as our existing domestic
business units. Terminal throughput averaged approximately 143,000 barrels per
day and 55,000 barrels per day in the first half of 2001 and 2000, respectively,
primarily due to throughput arrangements with refiners and the existence of a
contango market.

Liquidity and Capital Resources

Credit Agreements

     In May 2001, we entered into new amended and restated credit facilities
that replaced our existing credit facilities.  Our $500.0 million senior secured
revolving credit facility was replaced by a $630.0 million senior secured
revolving credit and term loan facility, which is secured by substantially all
of our assets. The facility consists of a $500.0 million domestic revolving
facility (with a $10.0 million letter of credit sublimit), a $30.0 million
Canadian revolving facility (with a $5.0 million letter of credit sublimit) and
a $100.0 million term loan. The facility matures, as to the aggregate $530.0
million domestic and Canadian revolver portions, in April, 2005 and, as to the
$100.0 million term portion, in May, 2006. We also amended our $200 million
senior secured letter of credit and borrowing facility. For a complete
discussion of our credit facilities,  see Note 7 to the Consolidated Financial
Statements.

                                       20

Liquidity

     Cash generated from operations and our credit facilities are our primary
sources of liquidity. At June 30, 2001, we had working capital of approximately
$28.6 million. On August 8, 2001, subsequent to the closing of the CANPET
acquisition, PAA had approximately $439.8 million outstanding under its $630
million of credit facilities (excluding the letter of credit and borrowing
facility). Accordingly, PAA can borrow up to an additional $190 million subject
to covenants contained in the agreement.

     We believe that we have sufficient liquid assets, cash from operations and
borrowing capacity under our credit agreements to meet our financial
commitments, debt service obligations, contingencies and anticipated capital
expenditures.

     Cash Flows

                                             SIX MONTHS ENDED
                                                 JUNE 30,
                                           ------------------
(IN MILLIONS) (UNAUDITED)                  2001         2000
- ------------------------                   ----         ----
Cash provided by (used in):
 Operating activities                   $  (47.0)   $   (6.4)
 Investing activities                     (168.9)      218.3
 Financing activities                      213.5      (264.1)

Operating Activities. Net cash used in operating activities for the first
half of 2001 resulted primarily from purchases of hedged inventory maintained in
storage until delivery due to the existence of a contango market. All of this
inventory was hedged for delivery in the third quarter.

     Investing Activities. Net cash used for investing activities for the first
half of 2001 included approximately $161 million for the Murphy Acquisition.

     Financing activities. Cash provided by financing activities for the first
half  of 2001 resulted from our credit facilities that were used to finance the
Murphy Acquisition and the issuance of additional units which raised
approximately $100.7 million of equity capital. Proceeds from the equity
offering were used to repay indebtedness under the credit facilities.

     Contingencies

     Following our announcement in November 1999 of our losses resulting from
unauthorized trading by a former employee, numerous class action lawsuits were
filed in the United States District Court of the Southern District of Texas
against us, certain of our general partner's officers and directors and in some
of these cases, our general partner and Plains Resources Inc. alleging
violations of the federal securities laws.  In addition, derivative lawsuits
were filed in the Delaware Chancery Court and the United States District Court
of the Southern District of Texas against our general partner, its directors and
certain of its officers alleging the defendants breached the fiduciary duties
owed to us and our unitholders by failing to monitor properly the activities of
our traders.  The class actions and the Delaware derivative suits have been
settled, subject to court approval.  See Part II, Item 1 - "Legal Proceedings".

     We may experience future releases of crude oil into the environment from
our pipeline and storage operations, or discover releases that were previously
unidentified.  Although we maintain an extensive inspection program designed to
prevent and, as applicable, to detect and address such releases promptly,
damages and liabilities incurred due to any future environmental releases from
our assets may substantially affect our business.

Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141 "Business Combinations"
("SFAS 141") and No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142").
SFAS 141 requires all business combinations initiated after June 30, 2001, to be
accounted for under the purchase method.  For all business combinations for
which the date of acquisition is after June 30, 2001, this Standard also
establishes specific criteria for the recognition of intangible assets
separately from goodwill and requires unallocated negative goodwill to be
written off immediately as an extraordinary gain, rather than deferred and
amortized.  SFAS 142 changes the accounting for goodwill and other intangible
assets after an acquisition.  The most significant changes made by SFAS 142 are:
1) goodwill and intangible assets with indefinite lives will no longer be
amortized; 2) goodwill and intangible assets with indefinite lives must

                                       21

be tested for impairment at least annually; and 3) the amortization period for
intangible assets with finite lives will no longer be limited to forty years. At
this time, we cannot reasonably estimate the effect of the adoption of this
statement on either our financial position, results of operations, or cash
flows.

     We will account for all future business combinations, including the CANPET
acquisition, under SFAS 141.  Effective January 1, 2002, we will adopt SFAS 142,
as required.  At that time, amortization will cease on the unamortized portion
of the goodwill arising from the Scurlock acquisition.

     In June 2001, the FASB also approved for issuance SFAS 143 "Asset
Retirement Obligations".  SFAS 143 establishes accounting requirements for
retirement obligations associated with tangible long-lived assets, including (1)
the timing of the liability recognition, (2) initial measurement of the
liability, (3) allocation of asset retirement cost to expense, (4) subsequent
measurement of the liability and (5) financial statement disclosures.  SFAS 143
requires that an asset retirement cost should be capitalized as part of the cost
of the related long-lived asset and subsequently allocated to expense using a
systematic and rational method.  We will adopt the statement effective
January 1, 2003, as required. The transition adjustment resulting from the
adoption of SFAS 143 will be reported as a cumulative effect of a change in
accounting principle. At this time, we cannot reasonably estimate the effect of
the adoption of this statement on either our financial position, results of
operations, or cash flows.

Forward-Looking Statements and Associated Risks

     All statements, other than statements of historical fact, included in this
report are forward-looking statements, including, but not limited to, statements
identified by the words "anticipate," "believe," "estimate," "expect,"
"plan," "intend" and "forecast" and similar expressions and statements
regarding our business strategy, plans and objectives of our management for
future operations. These statements reflect our current views and those of our
general partner with respect to future events, based on what we believe are
reasonable assumptions. These statements, however, are subject to certain risks,
uncertainties and assumptions, including, but not limited to:

     . the availability of adequate supplies of and demand for crude oil in the
       areas in which we operate;
     . the impact of crude oil price fluctuations; successful third-party
       drilling efforts and completion of announced oil-sands project ;
     . the effects of competition;
     . the success of our risk management activities;
     . the availability of favorable acquisition or combination opportunities;
       our ability to receive credit on satisfactory terms
     . unanticipated shortages or cost increases of power supplies, materials or
       labor
     . weather interference with business operations or project construction
     . successful integration and future performance of recently acquired
       assets;
     . the impact of current and future laws and governmental regulations;
     . environmental liabilities not covered by indemnity or insurance; and
     . general economic, market or business conditions.

     If one or more of these risks or uncertainties materialize, or if
underlying assumptions prove incorrect, actual results may vary materially from
the results anticipated in the forward-looking statements. Except as required by
applicable securities laws, we do not intend to update these forward-looking
statements and information.

                                       22

          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

     We are exposed to various market risks, including volatility in crude oil
commodity prices and interest rates. To manage such exposure, we monitor our
inventory levels and our expectations of future commodity prices and interest
rates when making decisions with respect to risk management. We do not enter
into derivative transactions for speculative trading purposes that would expose
us to price risk. Substantially all of our derivative contracts are exchanged or
traded with major financial institutions and the risk of credit loss is
considered remote.

     On January 1, 2001, we adopted SFAS 133 "Accounting for Derivative
Instruments and Hedging Activities" as amended by SFAS 137 and SFAS 138.  Under
SFAS 133, all derivative instruments are recorded on the balance sheet at fair
value.  If the derivative does not qualify as a hedge or is not designated as a
hedge, the gain or loss on the derivative is recognized currently in earnings.
To qualify for hedge accounting, the derivative must qualify either as a fair
value hedge, cash flow hedge or foreign currency hedge. As of June 30, 2001, our
transactions consisted of only cash flow and foreign currency hedges (which are
defined as fair value hedges) and the remaining discussion will relate
exclusively to these types of derivative instruments.  If the derivative
qualifies for cash flow hedge accounting, the gain or loss on the derivative is
deferred in accumulated Other Comprehensive Income ("OCI"), a component of
Partners' Capital, to the extent the hedge is effective.  Fair value hedge gains
or losses are taken directly to earnings in the current period.

     We utilize various derivative instruments, for purposes other than trading,
to hedge our exposure to price fluctuations on crude in storage and expected
purchases, sales and transportation of crude oil. The derivative instruments
consist primarily of futures and option contracts traded on the New York
Mercantile Exchange. We also utilize interest rate collars to manage the
interest rate exposure on our long-term debt and foreign currency hedges to
manage exchange rate exposure.

     At June 30, 2001, a $5.8 million unrealized loss was recorded to OCI
together with related assets and liabilities of $6.9 million and $12.9 million,
respectively. Earnings included a noncash gain of $0.2 million related to the
ineffective portion of our cash flow hedges as well as the gain/loss on our
fair value hedges, (included in revenues in the income statement). Our hedge-
related assets and liabilities are included in other current assets and other
current liabilities in the balance sheet.

     As of June 30, 2001, the total amount of deferred net losses on derivative
instruments recorded in OCI are expected to be reclassified to earnings during
the next twelve-month period.  At June 30, 2001 we had the following open crude
oil hedge positions:

                                    2001                    2002
                             ------------------     -------------------
                             3rd Qtr    4th Qtr     1st Qtr     2nd Qtr
                             -------    -------     -------     -------
Volume (bbls)
 Short positions            812,000           -           -          -
 Long positions                   -     762,000     132,000    250,000
Average price ($/bbl)        $25.13      $26.84      $27.28     $25.56

At June 30, 2001, we had an interest rate collar arrangement to protect interest
rate fluctuations on a portion of our outstanding debt for an aggregate notional
principal amount of $125.0 million. This instrument is based on LIBOR rates and
provides for a floor of 6.1% and a ceiling of 8.0% with an expiration date of
August 2002.

     We formally document all relationships between hedging instruments and
hedged items, as well as our risk management objectives and strategy for
undertaking the hedge. Hedge effectiveness is measured on a quarterly basis.
This process includes specific identification of the hedging instrument and the
hedge transaction, the nature of the risk being hedged and how the hedging
instrument's effectiveness will be assessed.  Both at the inception of the hedge
and on an ongoing basis, we assess whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in cash flows of
hedged items. No amounts were excluded from the computation of hedge
effectiveness.

                                       23

                          PART II. OTHER INFORMATION

Items 1. LEGAL PROCEEDINGS

     Texas Securities Litigation. On November 29, 1999, a class action lawsuit
was filed in the United States District Court for the Southern District of Texas
entitled Di Giacomo v. Plains All American Pipeline, L.P., et al. The suit
alleged that Plains All American and certain of the officers and directors of
Plains All American Inc. (our general partner at the time) violated federal
securities laws, primarily in connection with unauthorized trading by a former
employee. An additional nineteen cases were filed in the Southern District of
Texas, some of which name Plains All American Inc. and Plains Resources as
additional defendants. All of the federal securities claims have been
consolidated into two actions. The first consolidated action is that filed by
purchasers of Plains Resources' common stock and options, and is captioned
Koplovitz v. Plains Resources Inc., et al. The second consolidated action is
that filed by purchasers of our common units, and is captioned Di Giacomo v.
Plains All American Pipeline, L.P., et al. Plaintiffs alleged that the
defendants were liable for securities fraud violations under Rule 10b-5 and
Section 20(a) of the Securities Exchange Act of 1934 and for making false
registration statements under Sections 11 and 15 of the Securities Act of 1933.

     We and Plains Resources reached an agreement with representatives for the
plaintiffs for the settlement of all of the class actions, and in January 2001,
we deposited approximately $30.0 million under the terms of the settlement
agreement. The total cost of the settlement to us and Plains Resources,
including interest and expenses and after insurance reimbursements, was $14.9
million. Of that amount, $1.0 million was allocated to Plains Resources by
agreement between special independent committees of the board of directors of
Plains All American Inc. and the board of directors of Plains Resources. The
settlement is subject to final approval by the court. The settlement agreement
does not affect the Texas Derivative Litigation and Delaware Derivative
Litigation described below.

     Delaware Derivative Litigation. On December 3, 1999, two derivative
lawsuits were filed in the Delaware Chancery Court, New Castle County, entitled
Susser v. Plains All American Inc., et al and Senderowitz v. Plains All American
Inc., et al. These suits, and three others which were filed in Delaware
subsequently, named Plains All American Inc., its directors and certain of its
officers as defendants, and allege that the defendants breached the fiduciary
duties that they owed to Plains All American Pipeline, L.P. and its unitholders
by failing to monitor properly the activities of its employees. The court has
consolidated all of the cases under the caption In Re Plains All American Inc.
Shareholders Litigation, and has designated the complaint filed in Susser v.
Plains All American Inc. as the complaint in the consolidated action. A motion
to dismiss was filed on behalf of the defendants on August 11, 2000.

     The plaintiffs in the Delaware derivative litigation seek that the
defendants

     . account for all losses and damages allegedly sustained by Plains All
       American from the unauthorized trading losses;
     . establish and maintain effective internal controls ensuring that our
       affiliates and persons responsible for our affairs do not engage in
       wrongful practices detrimental to Plains All American;
     . pay for the plaintiffs' costs and expenses in the litigation, including
       reasonable attorneys' fees, accountants' fees and experts' fees; and
     . provide the plaintiffs any additional relief as may be just and proper
       under the circumstances.

     We have reached an agreement in principle with the plaintiffs, subject to
approval by the Delaware court, to settle the Delaware litigation for
approximately $1.1 million.

     Texas Derivative Litigation. On July 11, 2000, a derivative lawsuit was
filed in the United States District Court of the Southern District of Texas
entitled Fernandes v. Plains All American Inc., et al, naming Plains All
American Inc., its directors and certain of its officers as defendants. This
lawsuit contains the same claims and seeks the same relief as the Delaware
derivative litigation, described above. A motion to dismiss was filed on behalf
of the defendants on August 14, 2000.

     We intend to vigorously defend the claims made in the Texas derivative
litigation. We believe that Delaware court approval of the settlement of the
Delaware derivative litigation will effectively preclude prosecution of the
Texas derivative litigation. However, there can be no assurance that we will be
successful in our defense or that this lawsuit will not have a material adverse
effect on our financial position or results of operation.

     We, in the ordinary course of business, are a claimant and/or a defendant
in various other legal proceedings. Management does not believe that the outcome
of these other legal proceedings, individually and in the aggregate, will have a
materially adverse effect on our financial condition, results of operations or
cash flows.

                                       24

Items 2, 3, 4 & 5 are not applicable and have been omitted.

Item 6 - Exhibits and Reports on Form 8-K

                   A. Exhibits

  * 3.1       -    Amendment 3 to the Second Amended and Restated Agreement of Limited Partnership of Plains All
                   American Pipeline, L.P. dated as of April 27, 2001.

    3.2       -    Amendment 4 to the Second Amended and Restated Agreement of Limited Partnership of Plains All
                   American Pipeline, L.P. dated as of June 27, 2001.

  * 3.3       -    Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of Plains Marketing, L.P. dated as
                   of April 27, 2001.

  * 3.4       -    Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of All American Pipeline, L.P. dated
                   as of April 27, 2001.

    3.5       -    Amendment No. 2 to the Amended and Restated Agreement of Limited Partnership of Plains Marketing, L.P. dated as
                   of June 27, 2001 (incorporated by reference to Exhibit 3.2 to Form 8-K filed July 10, 2001).

    3.6       -    Amendment No. 2 to the Amended and Restated Agreement of Limited Partnership of All American Pipeline, L.P. dated
                   as of June 27, 2001 (incorporated by reference to Exhibit 3.3 to Form 8-K filed July 10, 2001).

    3.7       -   Amended and Restated Limited Partnership Agreement of Plains AAP, L.P., dated as of June 8, 2001. (incorporated by
                  reference to Exhibit 3.1 to Form 8-K filed June 11, 2001).

    3.8       -   Amended and Restated Limited Liability Company Agreement of Plains All American GP, LLC dated as of June 8, 2001
                  (incorporated by reference to Exhibit 3.2 to Form 8-K filed June 11, 2001).

    4.1       -   Registration Rights Agreement, dated as of June 8, 2001, among Plains All American Pipeline, L.P., Sable Holdings,
                  L.P., E-Holdings III, L.P., KAFU Holdings, LP, PAA Management, L.P., Mark E. Strome, Strome Hedgecap Fund, L.P.,
                  John T. Raymond and Plains All American Inc. (incorporated by reference to Exhibit 4.1 to Form 8-K filed June 11,
                  2001).

   10.1       -   Contribution, Assignment and Amendment Agreement, dated as of June 27, 2001, among Plains All American Pipeline,
                  L.P., Plains Marketing, L.P., All American Pipeline, L.P., Plains AAP, L.P. Plains All American GP LLC and Plains
                  Marketing GP Inc.

   10.2       -   Contribution, Assignment and Amendment Agreement, dated as of June 8, 2001 among Plains All American Inc., Plains
                  AAP, L.P. and Plains All American GP LLC (incorporated by reference to Exhibit 10.1 to Form 8-K filed June 11,
                  2001).

   10.3       -   Separation Agreement, dated as of June 8, 2001 among Plains Resources Inc., Plains All American Inc., Plains All
                  American GP LLC, Plains AAP, L.P. and Plains All American Pipeline, L.P. (incorporated by reference to Exhibit
                  10.2 to Form 8-K filed June 11, 2001).

   10.4       -   Pension and Employee Benefits Assumption and Transition Agreement, dated as of June 8, 2001 among Plains Resources
                  Inc., Plains All American Inc. and Plains All American GP LLC (incorporated by reference to Exhibit 10.3 to
                  Form 8-K filed June 11, 2001).

 * 10.6       -   First Amendment to Amended and Restated Credit Agreement (Letter of Credit and Hedged Inventory Facility) dated as
                  of May 25, 2001 among Plains Marketing, L.P., All American Pipeline, L.P. and Plains All American Pipeline, L.P.
                  and Fleet National Bank and certain other lenders.

 * 10.7       -   Second Amendment to Amended and Restated Credit Agreement (Letter of Credit and Hedged Inventory Facility) dated
                  as of June 26, 2001 among Plains Marketing, L.P., All American Pipeline, L.P. and Plains All American Pipeline,
                  L.P. and Fleet National Bank and certain other lenders.

 * 10.8       -   First Amendment to Amended and Restated Credit Agreement (Revolving Credit Facility) dated as of May 25, 2001
                  among Plains Marketing, L.P., All American Pipeline, L.P. and Plains All American Pipeline, L.P., and

                                       25

            
                  Fleet National Bank, The Toronto-Dominion Bank, PMC (Nova Scotia) Company, Plains Marketing Canada, L.P. and
                  certain other lenders.

 * 10.9       -   Second Amendment to Amended and Restated Credit Agreement (Revolving Credit Facility) dated as of June 26, 2001
                  among Plains Marketing, L.P., All American Pipeline, L.P. and Plains All American Pipeline, L.P., and Fleet
                  National Bank, The Toronto-Dominion Bank, PMC (Nova Scotia) Company, Plains Marketing Canada, L.P. and certain
                  other lenders.

- --------------
*  Filed herewith

      B.  Reports on Form 8-K

     A Current Report on Form 8-K was filed on July 10, 2001, in connection with
     amendments to the Partnership's and the operating limited partnerships'
     partnership agreements related to the restructuring of the general partner
     ownership of the Partnership's principal operating subsidiary partnerships.

     A Current Report on Form 8-K was filed on July 2, 2001, in connection with
     the deferral of the private placement of Senior Notes.

     A Current Report on Form 8-K was filed on June 27, 2001, in connection with
     the restructuring of the general partner ownership of the Partnership's
     principal operating subsidiary partnerships.

     A Current Report on Form 8-K was filed on June 25, 2001, in connection with
     the acquisition of properties for Murphy Oil Company, Ltd.

     A Current Report on Form 8-K was filed on June 11, 2001, in connection with
     the restructuring of the ownership of our general partner.

     A Current Report on Form 8-K was filed on May 25, 2001, in connection with
     a proposed private placement of Senior Notes.

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned and thereunto duly authorized.

                                        PLAINS ALL AMERICAN PIPELINE, L.P.

                                        By:  PLAINS ALL AMERICAN GP LLC
                                             Its General Partner

Date:   August 14, 2001                 By: /s/PHILLIP D. KRAMER
                                           -------------------------------
                                           Phillip D. Kramer, Executive Vice
                                           President and Chief Financial Officer

                                       26

                                                                     EXHIBIT 3.1

              AMENDMENT NO. 3 TO THE SECOND AMENDED AND RESTATED
                      AGREEMENT OF LIMITED PARTNERSHIP OF
                       PLAINS ALL AMERICAN PIPELINE, L.P.

     THIS AMENDMENT NO. 3 TO THE SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF PLAINS ALL AMERICAN PIPELINE, L.P. (this "Amendment"),
dated as of April 27, 2001, is entered into and effectuated by Plains All
American Inc., a Delaware corporation, as the General Partner, pursuant to the
authority granted to it in Section 13.1(d) of the Second Amended and Restated
Agreement of Limited Partnership of Plains All American Pipeline, L.P., dated as
of November 17, 1998, as amended (the "Partnership Agreement").  Capitalized
terms used but not defined herein are used as defined in the Partnership
Agreement.

     WHEREAS, Section 13.1(d) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partners, may amend any
provision of the Partnership Agreement and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect a change that, in the discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect; and

     WHEREAS, the General Partner deems it in the best interest of the
Partnership to effect this amendment in order to provide (i) that Section 6.3(c)
of the Partnership Agreement apply to taxes paid by any member of the
Partnership Group, amounts withheld by any member of the Partnership Group for
taxes, and amounts seized by any taxing authority from any member of the
Partnership Group and (ii) that Section 9.4 of the Partnership Agreement apply
to distributions of income between members of the Partnership Group; and

     WHEREAS, the General Partner has determined that this Amendment will be
beneficial to the Limited Partners, including the holders of the Common Units;

     NOW, THEREFORE, Sections 6.3(c) and 9.4 of the Partnership Agreement are
hereby amended and restated in their entirety as follows:

     Section 6.3  Requirement and Characterization of Distributions;
                  Distributions to Record Holders.

           (c) The General Partner shall have the discretion to treat as a
     distribution of Available Cash to all or less than all of the Partners or
     Assignees (i) taxes paid by any member of the Partnership Group on behalf
     of such Partners or Assignees, (ii) amounts withheld by any member of the
     Partnership Group for taxes with respect to such Partners or Assignees and
     (iii) amounts seized by any taxing authority from any member of the
     Partnership Group with respect to taxes owed by such Partners or Assignees.

     Section 9.4  Withholding.

          Notwithstanding any other provision of this Agreement, the General
     Partner is authorized to take any action that it determines in its
     discretion to be necessary or appropriate to cause the Partnership and each
     Operating Partnership to comply with any withholding requirements
     established under the Code or any other federal, state, local or foreign
     law including, without limitation, pursuant to Sections 1441, 1442, 1445
     and 1446 of the Code.  To the extent that the Partnership or any member of
     the Partnership Group is required or elects to withhold or pay over to any
     taxing authority, or any taxing authority seizes, any amount resulting from
     the allocation or distribution of income to any member of the Partnership
     Group, Partner or Assignee, the amount withheld, paid over or seized may at
     the discretion of the General Partner be treated by the Partnership as a
     distribution of cash pursuant to Section 6.3 to the Partner or Assignee to
     whom such withholding, payment or seizure is attributed.

     This Amendment will be governed by and construed in accordance with the
laws of the State of Delaware.

     IN WITNESS WHEREOF, this Amendment has been executed as the date first
written above.

                              PLAINS ALL AMERICAN INC.,
                              General Partner

                              By:
                                 -------------------------------
                              Name:  Tim Moore
                              Title: Vice President

                                                                     EXHIBIT 3.3

                  AMENDMENT NO. 1 TO THE AMENDED AND RESTATED
                      AGREEMENT OF LIMITED PARTNERSHIP OF
                             PLAINS MARKETING, L.P.

     THIS AMENDMENT NO. 1 TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF PLAINS MARKETING, L.P. (this "Amendment"), dated as of April 27,
2001, is entered into and effectuated by Plains All American Inc., a Delaware
corporation, as the General Partner, pursuant to the authority granted to it in
Section 13.1(d) of the Amended and Restated Agreement of Limited Partnership of
Plains Marketing, L.P., dated as of November 17, 1998, as amended (the
"Partnership Agreement").  Capitalized terms used but not defined herein are
used as defined in the Partnership Agreement.

     WHEREAS, Section 13.1(d) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partners, may amend any
provision of the Partnership Agreement and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect a change that, in the discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect; and

     WHEREAS, the General Partner deems it in the best interest of the
Partnership to effect this amendment in order to provide (i) that Section 6.3(c)
of the Partnership Agreement apply to taxes paid by any member of the
Partnership Group, amounts withheld by any member of the Partnership Group for
taxes, and amounts seized by any taxing authority from any member of the
Partnership Group and (ii) that Section 9.4 of the Partnership Agreement apply
to distributions of income between members of the Partnership Group; and

     WHEREAS, the General Partner has determined that this Amendment will be
beneficial to the Limited Partners, including the holders of the Common Units;

     NOW, THEREFORE, Sections 6.3(c) and 9.4 of the Partnership Agreement are
hereby amended and restated in their entirety as follows:

     Section 6.3  Distributions.

            (c)   The General Partner shall have the discretion to treat as a
     distribution of Available Cash to all or less than all of the Partners or
     Assignees (i) taxes paid by any member of the Partnership Group on behalf
     of such Partners or Assignees, (ii) amounts withheld by any member of the
     Partnership Group for taxes with respect to such Partners or Assignees and
     (iii) amounts seized by any taxing authority from any member of the
     Partnership Group with respect to taxes owed by such Partners or Assignees.

     Section 9.4  Withholding.

          Notwithstanding any other provision of this Agreement, the General
     Partner is authorized to take any action that it determines in its
     discretion to be necessary or appropriate to cause the Partnership to
     comply with any withholding requirements established under the Code or any
     other federal, state, local or foreign law including, without limitation,
     pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.  To the extent
     that the Partnership is required or elects to withhold or pay over to any
     taxing authority, or any taxing authority seizes, any amount resulting from
     the allocation or distribution of income to any member of the Partnership
     Group, Partner or Assignee, the amount withheld, paid over or seized may at
     the discretion of the General Partner be treated by the Partnership as a
     distribution of cash pursuant to Section 6.3 to the Partner or Assignee to
     whom such withholding, payment or seizure is attributed.

     This Amendment will be governed by and construed in accordance with the
laws of the State of Delaware.

     IN WITNESS WHEREOF, this Amendment has been executed as the date first
written above.

                                   PLAINS ALL AMERICAN INC.,
                                   General Partner

                                   By:
                                      -----------------------------
                                   Name:  Tim Moore
                                   Title: Vice President

                                                                     EXHIBIT 3.4

                  AMENDMENT NO. 1 TO THE AMENDED AND RESTATED
                      AGREEMENT OF LIMITED PARTNERSHIP OF
                          ALL AMERICAN PIPELINE, L.P.

     THIS AMENDMENT NO. 1 TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF ALL AMERICAN PIPELINE, L.P. (this "Amendment"), dated as of
April 27, 2001, is entered into and effectuated by Plains All American Inc., a
Delaware corporation, as the General Partner, pursuant to the authority granted
to it in Section 13.1(d) of the Amended and Restated Agreement of Limited
Partnership of All American Pipeline, L.P., dated as of November 17, 1998, as
amended (the "Partnership Agreement"). Capitalized terms used but not defined
herein are used as defined in the Partnership Agreement.

     WHEREAS, Section 13.1(d) of the Partnership Agreement provides that the
General Partner, without the approval of any Limited Partners, may amend any
provision of the Partnership Agreement and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect a change that, in the discretion of the General Partner,
does not adversely affect the Limited Partners in any material respect; and

     WHEREAS, the General Partner deems it in the best interest of the
Partnership to effect this amendment in order to provide (i) that Section 6.3(c)
of the Partnership Agreement apply to taxes paid by any member of the
Partnership Group, amounts withheld by any member of the Partnership Group for
taxes, and amounts seized by any taxing authority from any member of the
Partnership Group and (ii) that Section 9.4 of the Partnership Agreement apply
to distributions of income between members of the Partnership Group; and

     WHEREAS, the General Partner has determined that this Amendment will be
beneficial to the Limited Partners, including the holders of the Common Units;

     NOW, THEREFORE, Sections 6.3(c) and 9.4 of the Partnership Agreement are
hereby amended and restated in their entirety as follows:

     Section 6.3  Distributions.

           (c) The General Partner shall have the discretion to treat as a
     distribution of Available Cash to all or less than all of the Partners or
     Assignees (i) taxes paid by any member of the Partnership Group on behalf
     of such Partners or Assignees, (ii) amounts withheld by any member of the
     Partnership Group for taxes with respect to such Partners or Assignees and
     (iii) amounts seized by any taxing authority from any member of the
     Partnership Group with respect to taxes owed by such Partners or Assignees.

     Section 9.4  Withholding.

          Notwithstanding any other provision of this Agreement, the General
     Partner is authorized to take any action that it determines in its
     discretion to be necessary or appropriate to cause the Partnership to
     comply with any withholding requirements established under the Code or any
     other federal, state, local or foreign law including, without limitation,
     pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.  To the extent
     that the Partnership is required or elects to withhold or pay over to any
     taxing authority, or any taxing authority seizes, any amount resulting from
     the allocation or distribution of income to any member of the Partnership
     Group, Partner or Assignee, the amount withheld, paid over or seized may at
     the discretion of the General Partner be treated by the Partnership as a
     distribution of cash pursuant to Section 6.3 to the Partner or Assignee to
     whom such withholding, payment or seizure is attributed.

     This Amendment will be governed by and construed in accordance with the
laws of the State of Delaware.

     IN WITNESS WHEREOF, this Amendment has been executed as the date first
written above.

                                   PLAINS ALL AMERICAN INC.,
                                   General Partner

                                   By:
                                      -----------------------------------
                                   Name:  Tim Moore
                                   Title: Vice President

                                                                    EXHIBIT 10.6

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
                [Letter of Credit and Hedged Inventory Facility]

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT [Letter of
Credit and Hedged Inventory Facility] (this "Amendment") dated as of the 25th
day of May, 2001, by and among PLAINS MARKETING, L.P. ("Borrower"), ALL AMERICAN
PIPELINE, L.P. and PLAINS ALL AMERICAN PIPELINE, L.P., as guarantors, FLEET
NATIONAL BANK, as Administrative Agent, and the Lenders party hereto.

                              W I T N E S S E T H:

     WHEREAS, Borrower, All American, Plains MLP, Administrative Agent and
Lenders entered into that certain Amended and Restated Credit Agreement [Letter
of Credit and Hedged Inventory Facility] dated as of May 4, 2001 (the "Original
Agreement") for the purposes and consideration therein expressed, pursuant to
which Lenders became obligated to make and made loans to Borrower as therein
provided; and

     WHEREAS, Borrower, All American, Plains MLP, Administrative Agent and
Lenders desire to amend the Original Agreement for the purposes described
herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:

                    ARTICLE I. -- Definitions and References

     (S) 1.1.  Terms Defined in the Original Agreement.  Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.

     (S) 1.2.  Other Defined Terms.  Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to
them in this (S) 1.2.

               "Amendment" means this First Amendment to Amended and Restated
     Credit Agreement [Letter of Credit and Hedged Inventory Facility].

               "Amendment Documents" means this Amendment.

               "Credit Agreement" means the Original Agreement as amended
     hereby.

                                       1

                           ARTICLE II. -- Amendments

     (S) 2.1.  Definitions.  (a)  The definitions of "Change of Control",
"Consolidated Net Worth", "General Partner" and "Wholly-Owned Subsidiary" set
forth in Section 1.1 of the Agreement are hereby amended in their entirety to
read as follows:

               "Change of Control" means the occurrence of any of the following
     events:

               (i) Qualifying Directors cease for any reason to constitute
     collectively a majority of the members of the board of directors of GP LLC
     (the "Board") then in office;

               (ii) GP LLC shall cease to be, directly or indirectly, the sole
     legal and beneficial owner (within the meaning of Rule 13d-3 under the
     Securities Exchange Act of 1934, as amended) of all of the general partner
     interests (including all securities which are convertible into general
     partner interests) of the General Partner;

               (iii) General Partner shall cease to be, directly or indirectly,
     the sole legal and beneficial owner (as defined above) of all of the
     general partner interests (including all securities which are convertible
     into general partner interests) of Plains MLP;

               (iv) Plains MLP shall cease to be, directly or indirectly, the
     sole legal and beneficial owner (as defined above) of all (a) equity
     interests of Plains Newco LLC, (b) limited partner interests of Borrower
     and All American, (c) partner interests of Plains Marketing Canada, L.P.
     (other than the limited partner interests of Plains Marketing Canada, L.P.
     that may be issued to CanPet Energy Group (USA), Inc. or CanPet Energy
     Group Inc. as permitted under Section 7.4), or (d) capital stock of PMC
     (Nova Scotia) Company; or

               (v) Neither General Partner nor Plains MLP shall continue to be,
     directly or indirectly, the sole legal and beneficial owner of the general
     partner interest in Borrower and All American.

     As used herein, "Qualifying Director" means (i) any Person designated by
     any Qualifying Owner as its representative on the Board, (ii) so long as
     Qualifying Owners own a majority of the ownership interests of GP LLC
     entitling the holders thereof to vote in elections for directors of GP LLC,
     any Person elected by a majority of such owners of GP LLC entitled to vote
     thereon, and (iii) the chief executive officer of GP LLC, and "Qualifying
     Owner" means Plains Resources Inc., Kayne Anderson Investment Management,
     EnCap Investments LLC, Sable Minerals, or any Affiliate of any of the
     foregoing.

               "Consolidated Net Worth" means the remainder of all Consolidated
     assets, as determined in accordance with GAAP, of Plains MLP and its
     Subsidiaries minus the sum of Plains MLP's Consolidated liabilities, as
     determined in accordance with GAAP. The effect of any increase or decrease
     in net worth in any period as a result of items of income or loss not
     reflected in the determination

                                       2

     of net income but reflected in the determination of comprehensive income
     (to the extent provided under GAAP as in effect on the date hereof) shall
     be excluded in determining Consolidated Net Worth.

               "General Partner" means Plains AAP, L.P., a Delaware limited
     partnership, in its capacity as the sole general partner of Plains MLP.

               "Wholly Owned Subsidiary" means any Subsidiary of a Person, all
     of the issued and outstanding stock, limited liability company membership
     interests, or partnership interests of which (including all rights or
     options to acquire such stock or interests) are directly or indirectly
     (through one or more Subsidiaries) owned by such Person.

     (b)       Clause (A) of the definition of "Permitted Acquisitions" set
forth in Section 1.1 of the Original Agreement is hereby amended in its entirety
to read as follows:

     (A) the acquisition of all of the capital stock or other equity interest in
     a Person

     (c)       The following definitions of "GP LLC" and "Plains Newco LLC" are
hereby added to Section 1.1 of the Original Agreement, for placement in
alphabetical order in relation to the other definitions in Section 1.1, to read
as follows:

               "GP LLC" means Plains All American GP LLC, a Delaware limited
     liability company.

               "Plains Newco LLC" means a Delaware limited liability company or
     other entity that is wholly-owned, directly or indirectly, by Plains MLP
     that is or may become the general partner of US Borrower and All American.

     (S) 2.3.  Limitation on Issuance of Securities.  The reference to "to such
Restricted Person, to Plains MLP or to General Partner" set forth in the fourth
sentence of Section 7.4 of the Original Agreement is hereby amended to refer
instead to "to such Restricted Person or to Plains MLP".

     (S) 2.4.  Limitation on Dividends and Redemptions.  The reference to ", and
to the General Partner pursuant to and in accordance with such Subsidiary's
partnership agreement" set forth in clause (i) of Section 7.6 of the Original
Agreement is hereby deleted.

     (S) 2.5.  Events of Default.  The references to "General Partner" set forth
in clauses (i) and (j) of Section 8.1 of the Original Agreement are hereby
amended to refer instead to "GP LLC or General Partner".

     (S) 2.6.  Consents re: PAAI Sale Transaction.  As generally set forth in
Plains MLP's Form 8-K and Plains Resources Inc.'s Form 8-K, each filed with the
Securities and Exchange Commission on May 10, 2001, Plains Resources Inc.
("Resources"), PAAI LLC and PAAI, the sole general partner of Plains MLP,
Borrower and All American as of the date hereof, have entered into one or more
agreements providing in part for the sale and transfer by PAAI of a portion of
its general partner interest in Plains MLP and by PAAI LLC of certain of its

                                       3

subordinated interests in Plains MLP (together with all other transfers
contemplated in connection therewith, the "PAAI Sale Transaction").  To the
extent any transfer pursuant to the PAAI Sale Transaction shall, for the purpose
of Section 7.4 of the Credit Agreement, constitute the issue of any security,
then such issuance may violate Section 7.4 of the Credit Agreement, which would
constitute an Event of Default under Section 8.1(d) of the Credit Agreement.
Lenders hereby consent to such issuance and waive any violation of Section 7.4
of the Credit Agreement or Event of Default caused thereby.  Additionally,
pursuant to the PAAI Sale Transaction, one or more Restricted Persons may enter
into transitional agreements with Resources and/or other Affiliates of such
Restricted Persons with respect to certain management and operational matters,
and such transactions with such Affiliates may violate Section 7.9 of the Credit
Agreement, which would constitute an Event of Default under Section 8.1(d) of
the Credit Agreement .  Lenders hereby consent to Restricted Persons' entry into
such transitional agreements with such Affiliates and waive any violation of
Section 7.9 of the Credit Agreement or Event of Default caused thereby;
provided, such transitional agreements shall be on terms which are no less
favorable to such Restricted Persons than those which would have been obtainable
at the time in arm's-length transactions with Persons other than such
Affiliates.

     (S)2.7.   Waiver and Consent re: Restructuring.  PAAI and Plains MLP may,
prior to the effectivness of this Amendment,  restructure the general partner
interests in US Borrower and All American such that a direct or indirect wholly-
owned Subsidiary of Plains MLP will hold such general partner interests, which
would constitute a Change of Control under the Original Agreement and an Event
of Default under Section 8.1(k) of the Original Agreement.  Lenders hereby
consent to any such restructuring prior to the effectiveness of this Amendment
and waive any Change of Control and Event of Default under Section 8.1(k) of the
Original Agreement caused thereby.

                  ARTICLE III. -- Conditions of Effectiveness

     (S) 3.1.  Effective Date.  This Amendment, other than the waiver set forth
in Section 2.7 hereof, shall become effective on the closing date provided for
in the agreements governing the PAAI Sale Transaction contemporaneous with such
closing (and the waiver set forth in Section 2.7 hereof shall become effective
as of the date hereof), when and only when (i) Administrative Agent shall have
received, at Administrative Agent's office, a counterpart of this Amendment
executed and delivered by Borrower, Plains MLP, All American and Majority
Lenders, (ii) Administrative Agent shall have additionally received all of the
following documents, each document (unless otherwise indicated) being dated the
date of receipt thereof by Administrative Agent, duly authorized, executed and
delivered, and in form and substance satisfactory to Administrative Agent:

          (A)  Officer's Certificate.  A certificate of a duly authorized
     officer of General Partner, to the effect that all of the representations
     and warranties set forth in Article IV hereof are true and correct at and
     as of the date thereof, and

          (B)  Supporting Documents.  Such supporting documents as
     Administrative Agent may reasonably request.

                                       4

                 ARTICLE IV. -- Representations and Warranties

     (S) 4.1.  Representations and Warranties of Plains MLP and Borrowers.  In
order to induce Administrative Agent and Lenders to enter into this Amendment,
Plains MLP and Borrowers represent and warrant to Administrative Agent and each
Lender that:

               (a)   The representations and warranties contained in Article V
     of the Original Agreement are true and correct at and as of the time of the
     effectiveness hereof, except to the extent that such representation and
     warranty was made as of a specific date.

               (b)   Each Restricted Person is duly authorized to execute and
     deliver this Amendment and each other Amendment Document, to the extent a
     party thereto, and each Borrower is and will continue to be duly authorized
     to borrow and perform its obligations under the Credit Agreement. Each
     Restricted Person has duly taken all action necessary to authorize the
     execution and delivery of this Amendment and each other Amendment Document,
     to the extent a party thereto, and to authorize the performance of their
     respective obligations hereunder.

               (c)   The execution and delivery by each Restricted Person of
     this Amendment and each other Amendment Document, to the extent a party
     thereto, the performance by each Restricted Person of its respective
     obligations hereunder and thereunder, and the consummation of the
     transactions contemplated hereby and thereby, do not and will not conflict
     with any provision of any Law or of the organizational documents of any
     Restricted Person, or of any material agreement, judgment, license, order
     or permit applicable to or binding upon any Restricted Person, or result in
     the creation of any Lien upon any assets or properties of any Restricted
     Person, except in favor of Administrative Agent for the benefit of Lenders
     and other Permitted Liens. Except for those which have been duly obtained,
     no consent, approval, authorization or order of any Tribunal or third party
     is required in connection with the execution and delivery by any Restricted
     Person of this Amendment or any other Amendment Document, or to consummate
     the transactions contemplated hereby and thereby.

               (d)   When duly executed and delivered, each of this Amendment
     and each other Amendment Document, and each of the Loan Documents, as
     amended hereby and thereby, will be a legal and binding instrument and
     agreement of each Restricted Person to the extent a party thereto,
     enforceable in accordance with its terms, (subject, as to enforcement of
     remedies, to applicable bankruptcy, insolvency and similar laws applicable
     to creditors' rights generally).

                          ARTICLE V. -- Miscellaneous

     (S) 5.1.  Ratification of Agreements.  The Original Agreement, as hereby
amended, is hereby ratified and confirmed in all respects.  The Loan Documents
(including but not limited to each Guaranty), as they may be amended or affected
by this Amendment or any other Amendment Document, are hereby ratified and
confirmed in all respects by each Restricted Person to the extent a party
thereto.  Any reference to the Credit Agreement in any Loan

                                       5

Document shall be deemed to refer to this Amendment also. The execution,
delivery and effectiveness of this Amendment and the other Amendment Documents
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of Administrative Agent or any Lender under the Credit
Agreement or any other Loan Document nor constitute a waiver of any provision of
the Credit Agreement or any other Loan Document.

     (S) 5.2.  Ratification of Security Documents.  Restricted Persons,
Administrative Agent, and Lenders each acknowledge and agree that any and all
indebtedness, liabilities or obligations arising under or in connection with the
LC Obligations or the Notes are Obligations and are secured indebtedness under,
are guarantied by, and are secured by, each and every Security Document to which
any Restricted Person is a party.  Each Restricted Person hereby re-pledges, re-
grants and re-assigns a security interest in and lien on every asset of the such
Restricted Person described as Collateral in any Security Document and re-
guarantees all Obligations, as amended hereby.

     (S) 5.3.  Ratification of Intercreditor Agreement.  Each Lender hereby
acknowledges and confirms that all Obligations under the Credit Agreement, as
amended hereby, and the "Obligations" under the Marketing Credit Agreement, as
amended on the date hereof, shall be and shall remain subject to the terms and
entitled to the benefits of the Intercreditor Agreement.

     (S) 5.4.  Survival of Agreements.  All representations, warranties,
covenants and agreements of the Restricted Persons herein shall survive the
execution and delivery of this Amendment and the performance hereof, including
without limitation the making or granting of each Loan, and shall further
survive until all of the Obligations are paid in full.  All statements and
agreements contained in any certificate or instrument delivered by any
Restricted Person hereunder or under the Credit Agreement to Administrative
Agent or any Lender shall be deemed to constitute representations and warranties
by, or agreements and covenants of, such Restricted Person under this Amendment
and under the Credit Agreement.

     (S) 5.5.  Loan Documents.  This Amendment and each other Amendment Document
is a Loan Document, and all provisions in the Credit Agreement pertaining to
Loan Documents apply hereto.

     (S) 5.6.  GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA IN ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY
AND PERFORMANCE.

     (S) 5.7.  Counterparts.  This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.

                                       6

     IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.

BORROWER:                     PLAINS MARKETING, L.P.

                              By:   Plains All American Inc., General Partner

                              By:
                              -----------------------------------------------
                                     Phil Kramer, Exec. Vice President

GUARANTORS:                   ALL AMERICAN, L.P.
                              PLAINS ALL AMERICAN PIPELINE, L.P.

                              By:   Plains All American Inc., General Partner

                              By:
                              -----------------------------------------------
                                     Phil Kramer, Exec. Vice President

                                       7

LENDER PARTIES:               FLEET NATIONAL BANK,
                              Administrative Agent, LC Issuer and Lender

                              By:
                                  --------------------------------------------
                                  Terrence Ronan, Managing Director

                              FIRST UNION NATIONAL BANK, Lender

                              By:
                                  --------------------------------------------
                                  Robert R. Wetteroff, Sr. Vice Pres.

                              BANK OF AMERICA, N.A., Lender

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

                              BANK ONE, NA (MAIN OFFICE CHICAGO),
                              Lender

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

                              FORTIS CAPITAL CORP., Lender

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

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

                              U.S. BANK NATIONAL ASSOCIATION, Lender

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

                              BANK OF SCOTLAND, Lender

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

                                       8

                              WELLS FARGO BANK (TEXAS),
                              NATIONAL ASSOCIATION, Lender

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

                              THE BANK OF NOVA SCOTIA, Lender

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

                              CREDIT AGRICOLE INDOSUEZ, Lender

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

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

                              TORONTO DOMINION (TEXAS), INC., Lender

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

                              SOUTHWEST BANK OF TEXAS, N.A., Lender

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

                              UNION BANK OF CALIFORNIA, N.A., Lender

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

                                       9

                              COMERICA BANK-TEXAS, Lender

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

                              BNP PARIBAS, Lender

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

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

                              GUARANTY BANK, Lender

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

                              SIEMENS FINANCIAL SERVICES INC., Lender

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

                                       10

                             CONSENT AND AGREEMENT

     Each of the undersigned hereby consents to the provisions of this Amendment
and the transactions contemplated herein and hereby (i) acknowledges and agrees
that any and all indebtedness, liabilities or obligations arising under or in
connection with the Notes are Obligations and are secured indebtedness under,
and are secured by, each and every Security Document to which it is a party,
(ii) re-pledges, re-grants and re-assigns a security interest in and lien on all
of its assets described as collateral in any Security Document, (iii) ratifies
and confirms its Guaranty dated May 4, 2001 made by it for the benefit of
Administrative Agent and Lenders, and (iv) expressly acknowledges and agrees
that the undersigned guarantees all indebtedness, liabilities and obligations
arising under or in connection with any and all Notes pursuant to the terms of
such Guaranty, and agrees that its obligations and covenants thereunder are
unimpaired hereby and shall remain in full force and effect.

                              PLAINS MARKETING CANADA LLC

                              By:   Plains Marketing, L.P., its sole member

                                    By:   Plains All American Inc.,
                                          its general partner

                                    By:
                                       ----------------------------------------
                                          Phil Kramer, Exec. Vice President

                              PMC (NOVA SCOTIA) COMPANY

                              By:
                                 ----------------------------------------------
                                       Phil Kramer, Exec. Vice President

                              PLAINS MARKETING CANADA, L.P.

                              By:   PMC (Nova Scotia) Company,
                                    General Partner

                              By:
                                 ----------------------------------------------
                                    Phil Kramer, Exec. Vice President

                                       11

                                                                    EXHIBIT 10.7

TO:  The Lenders under the Amended and Restated Credit Agreement (LETTER OF
     CREDIT AND HEDGED INVENTORY FACILITY) dated as of May 4, 2001 (the
     "Agreement") among Plains Marketing, L.P. ("Borrower"), All American
     Pipeline, L.P. and Plains All American Pipeline, L.P., as guarantors,
     Fleet National Bank, as Administrative Agent, and the Lenders named
     therein.

           SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Ladies and Gentlemen:

     Plains MLP proposes to issue Indebtedness pursuant to Section 7.1(g) of the
Agreement and has requested that Section 7.1(g) of the Agreement be amended to
permit such Indebtedness to be incurred with rights of optional redemption,
provided that each Restricted Person agree not to exercise such right without
the written consent of Majority Lenders, and otherwise as provided in Section
7.1(g).  Accordingly, to effect this agreement on each Restricted Person, clause
(1) of Section 7.1(g) of the Agreement is hereby amended to read as follows:

     (1) such Indebtedness shall not permit mandatory redemption by any holder
     thereof solely at the option of any such holder, nor any stated maturity,
     in each case prior to the Maturity Date,

and a new proviso is hereby added at the end of Section 7.1(g) immediately
following ";", to read as follows:

     provided, further, each Restricted Person hereby covenants and agrees that
     it will not optionally redeem, or make any payment on or with respect to
     the optional redemption of such Indebtedness (or any portion thereof) prior
     to the Maturity Date without the written consent of Majority Lenders;

     The effectiveness of this Amendment shall be conditioned upon the
contemporaneous effectiveness of an amendment to the Revolver Agreement on
substantially identical terms.  Please execute a copy of this letter in the
space provided below to evidence your consent to the foregoing and fax a copy to
the Administrative Agent (c/o Terry Ronan) at 617-434-3652 by 12:00 noon,
Tuesday, June 26th.  The foregoing amendment shall become effective upon consent
of Majority Lenders.

     Thank you for your assistance on such short notice.

                                       FLEET NATIONAL BANK, Administrative Agent

                                       By:   /s/ Terrence Ronan
                                          --------------------------------------
                                           Terrence Ronan, Managing Director

We hereby consent to the foregoing

- -------------------------------------
[Name of Lender]

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

PLAINS MARKETING, L.P., Borrower
ALL AMERICAN, L.P., Guarantor
PLAINS ALL AMERICAN PIPELINE, L.P., Guarantor

By:  Plains AAP, L.P., General Partner

By:  Plains All American GP LLC, its General Partner

     By:
        ------------------------------------------
              Tim Moore, Vice President

                                                                    EXHIBIT 10.8

            FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
                          [Revolving Credit Facility]

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT [Revolving
Credit Facility] (this "Amendment") dated as of the 25th day of May, 2001, by
and among PLAINS MARKETING, L.P. ("US Borrower"), ALL AMERICAN PIPELINE, L.P.
and PLAINS ALL AMERICAN PIPELINE, L.P., as guarantors, FLEET NATIONAL BANK, as
Administrative Agent, THE TORONTO-DOMINION BANK, as Canadian Agent, PMC (NOVA
SCOTIA) COMPANY ("Term Borrower"), PLAINS MARKETING CANADA, L.P. ("Canadian
Revolver Borrower"), and the Lenders party hereto.

                              W I T N E S S E T H:

     WHEREAS, US Borrower, All American, Plains MLP, Administrative Agent,
Canadian Agent, Term Borrower, Canadian Revolver Borrower and Lenders entered
into that certain Amended and Restated Credit Agreement [Revolving Credit
Facility] dated as of May 4, 2001 (the "Original Agreement") for the purposes
and consideration therein expressed, pursuant to which Lenders became obligated
to make and made loans to US Borrower, Term Borrower and Canadian Revolver
Borrower as therein provided; and

     WHEREAS, US Borrower, All American, Plains MLP, Administrative Agent,
Canadian Agent, Term Borrower, Canadian Revolver Borrower and Lenders desire to
amend the Original Agreement for the purposes described herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to US Borrower, Term
Borrower and Canadian Revolver Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:

                    ARTICLE I. -- Definitions and References

     (S) 1.1.  Terms Defined in the Original Agreement.  Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.

     (S) 1.2.  Other Defined Terms.  Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to
them in this (S) 1.2.

               "Amendment" means this First Amendment to Amended and Restated
     Credit Agreement [Revolving Credit Facility].

               "Amendment Documents" means this Amendment.

               "Credit Agreement" means the Original Agreement as
     amended hereby.

                                       1

                           ARTICLE II. -- Amendments

     (S) 2.1.  Definitions.  (a)  The definitions of "Change of Control",
"Consolidated Net Worth", "General Partner" and "Wholly-Owned Subsidiary" set
forth in Section 1.1 of the Agreement are hereby amended in their entirety to
read as follows:

               "Change of Control" means the occurrence of any of the
     following events:

               (i)  Qualifying Directors cease for any reason to constitute
     collectively a majority of the members of the board of directors of GP LLC
     (the "Board") then in office;

               (ii) GP LLC shall cease to be, directly or indirectly, the sole
     legal and beneficial owner (within the meaning of Rule 13d-3 under the
     Securities Exchange Act of 1934, as amended) of all of the general partner
     interests (including all securities which are convertible into general
     partner interests) of General Partner.

               (iii) General Partner shall cease to be, directly or indirectly,
     the sole legal and beneficial owner (as defined above) of all of the
     general partner interests (including all securities which are convertible
     into general partner interests) of Plains MLP;

                (iv) Plains MLP shall cease to be, directly or indirectly, the
     sole legal and beneficial owner (as defined above) of all (a) equity
     interests of Plains Newco LLC, (b) limited partner interests of US Borrower
     and All American, (c) partner interests of Plains Marketing Canada, L.P.
     (other than the limited partner interests of Plains Marketing Canada, L.P.
     that may be issued to CanPet Energy Group (USA), Inc. or CanPet Energy
     Group Inc. as permitted under Section 7.4), or (d) capital stock of PMC
     (Nova Scotia) Company; or

               (v) Neither General Partner nor Plains MLP shall continue to be,
     directly or indirectly, the sole legal and beneficial owner of the general
     partner interest in US Borrower and All American.

     As used herein, "Qualifying Director" means (i) any Person designated by
     any Qualifying Owner as its representative on the Board, (ii) so long as
     Qualifying Owners own a majority of the ownership interests of GP LLC
     entitling the holders thereof to vote in elections for directors of GP LLC,
     any Person elected by a majority of such owners of GP LLC entitled to vote
     thereon, and (iii) the chief executive officer of GP LLC, and "Qualifying
     Owner" means Plains Resources Inc., Kayne Anderson Investment Management,
     EnCap Investments LLC, Sable Minerals, or any Affiliate of any of the
     foregoing.

               "Consolidated Net Worth" means the remainder of all Consolidated
     assets, as determined in accordance with GAAP, of Plains MLP and its
     Subsidiaries minus the sum of Plains MLP's Consolidated liabilities, as
     determined in accordance with GAAP. The effect of any increase or decrease
     in net worth in any period as a result of items of income or loss not
     reflected in the determination of net income but reflected in the
     determination

                                       2

     of comprehensive income (to the extent provided under GAAP as in effect on
     the date hereof) shall be excluded in determining Consolidated Net Worth.

               "General Partner" means Plains AAP, L.P., a Delaware limited
     partnership, in its capacity as the sole general partner of Plains MLP.

               "Wholly Owned Subsidiary" means any Subsidiary of a Person, all
     of the issued and outstanding stock, limited liability company membership
     interests, or partnership interests of which (including all rights or
     options to acquire such stock or interests) are directly or indirectly
     (through one or more Subsidiaries) owned by such Person.

     (b) Clause (A) of the definition of "Permitted Acquisitions" set forth in
Section 1.1 of the Original Agreement is hereby amended in its entirety to read
as follows:

     (A) the acquisition of all of the capital stock or other equity interest in
     a Person

     (c) The following definitions of "GP LLC" and "Plains Newco LLC" are hereby
added to Section 1.1 of the Original Agreement, for placement in alphabetical
order in relation to the other definitions in Section 1.1, to read as follows:

               "GP LLC" means Plains All American GP LLC, a Delaware limited
     liability company.

               "Plains Newco LLC" means a Delaware limited liability company
     or other entity that is wholly-owned, directly or indirectly, by Plains MLP
     that is or may become the general partner of US Borrower and All American.

     (S) 2.3.  Limitation on Issuance of Securities.  The reference to "to such
Restricted Person, to Plains MLP or to General Partner" set forth in the fourth
sentence of Section 7.4 of the Original Agreement is hereby amended to refer
instead to "to such Restricted Person or to Plains MLP".

     (S) 2.4.  Limitation on Dividends and Redemptions.  The reference to ", and
to the General Partner pursuant to and in accordance with such Subsidiary's
partnership agreement" set forth in clause (i) of Section 7.6 of the Original
Agreement is hereby deleted.

     (S) 2.5.  Events of Default.  The references to "General Partner" set forth
in clauses (i) and (j) of Section 8.1 of the Original Agreement are hereby
amended to refer instead to "GP LLC or General Partner".

     (S) 2.6.  Consents re: PAAI Sale Transaction.  As generally set forth in
Plains MLP's Form 8-K and Plains Resources Inc.'s Form 8-K, each filed with the
Securities and Exchange Commission on May 10, 2001, Plains Resources Inc.
("Resources"), PAAI LLC and PAAI, the sole general partner of Plains MLP, US
Borrower and All American as of the date hereof, have entered into one or more
agreements providing in part for the sale and transfer by PAAI of a portion of
its general partner interest in Plains MLP and by PAAI LLC of certain of its

                                       3

subordinated interests in Plains MLP (together with all other transfers
contemplated in connection therewith, the "PAAI Sale Transaction").  To the
extent any transfer pursuant to the PAAI Sale Transaction shall, for the purpose
of Section 7.4 of the Credit Agreement, constitute the issue of any security,
then such issuance may violate Section 7.4 of the Credit Agreement, which would
constitute an Event of Default under Section 8.1(d) of the Credit Agreement.
Lenders hereby consent to such issuance and waive any violation of Section 7.4
of the Credit Agreement or Event of Default caused thereby.  Additionally,
pursuant to the PAAI Sale Transaction, one or more Restricted Persons may enter
into transitional agreements with Resources and/or other Affiliates of such
Restricted Persons with respect to certain management and operational matters,
and such transactions with such Affiliates may violate Section 7.9 of the Credit
Agreement, which would constitute an Event of Default under Section 8.1(d) of
the Credit Agreement.  Lenders hereby consent to Restricted Persons' entry into
such transitional agreements with such Affiliates and waive any violation of
Section 7.9 of the Credit Agreement or Event of Default caused thereby;
provided, such transitional agreements shall be on terms which are no less
favorable to such Restricted Persons than those which would have been obtainable
at the time in arm's-length transactions with Persons other than such
Affiliates.

     (S)2.7.  Waiver and Consent re: Restructuring.  PAAI and Plains MLP may,
prior to the effectivness of this Amendment,  restructure the general partner
interests in US Borrower and All American such that a direct or indirect wholly-
owned Subsidiary of Plains MLP will hold such general partner interests, which
would constitute a Change of Control under the Original Agreement and an Event
of Default under Section 8.1(k) of the Original Agreement.  Lenders hereby
consent to any such restructuring prior to the effectiveness of this Amendment
and waive any Change of Control and Event of Default under Section 8.1(k) of the
Original Agreement caused thereby.

                  ARTICLE III. -- Conditions of Effectiveness

     (S) 3.1.  Effective Date.  This Amendment, other than the waiver set forth
in Section 2.7 hereof, shall become effective on the closing date provided for
in the agreements governing the PAAI Sale Transaction contemporaneous with such
closing (and the waiver set forth in Section 2.7 hereof shall become effective
as of the date hereof), when and only when (i) Administrative Agent shall have
received, at Administrative Agent's office, a counterpart of this Amendment
executed and delivered by US Borrower, Term Borrower, Canadian Revolver
Borrower, Plains MLP, All American and Majority Lenders, (ii) Administrative
Agent shall have additionally received all of the following documents, each
document (unless otherwise indicated) being dated the date of receipt thereof by
Administrative Agent, duly authorized, executed and delivered, and in form and
substance satisfactory to Administrative Agent:

               (A) Officer's Certificate.  A certificate of a duly authorized
     officer of General Partner, to the effect that all of the representations
     and warranties set forth in Article IV hereof are true and correct at and
     as of the date thereof, and

               (B) Supporting Documents.  Such supporting documents as
     Administrative Agent may reasonably request.

                                       4

                 ARTICLE IV. -- Representations and Warranties

     (S) 4.1.  Representations and Warranties of Plains MLP and Borrowers.  In
order to induce Administrative Agent and Lenders to enter into this Amendment,
Plains MLP and Borrowers represent and warrant to Administrative Agent and each
Lender that:

               (a)   The representations and warranties contained in Article V
     of the Original Agreement are true and correct at and as of the time of the
     effectiveness hereof, except to the extent that such representation and
     warranty was made as of a specific date.

               (b)   Each Restricted Person is duly authorized to execute and
     deliver this Amendment and each other Amendment Document, to the extent a
     party thereto, and each Borrower is and will continue to be duly authorized
     to borrow and perform its obligations under the Credit Agreement. Each
     Restricted Person has duly taken all action necessary to authorize the
     execution and delivery of this Amendment and each other Amendment Document,
     to the extent a party thereto, and to authorize the performance of their
     respective obligations hereunder.

               (c)   The execution and delivery by each Restricted Person of
     this Amendment and each other Amendment Document, to the extent a party
     thereto, the performance by each Restricted Person of its respective
     obligations hereunder and thereunder, and the consummation of the
     transactions contemplated hereby and thereby, do not and will not conflict
     with any provision of any Law or of the organizational documents of any
     Restricted Person, or of any material agreement, judgment, license, order
     or permit applicable to or binding upon any Restricted Person, or result in
     the creation of any Lien upon any assets or properties of any Restricted
     Person, except in favor of Administrative Agent or Canadian Agent for the
     benefit of Lenders and other Permitted Liens. Except for those which have
     been duly obtained, no consent, approval, authorization or order of any
     Tribunal or third party is required in connection with the execution and
     delivery by any Restricted Person of this Amendment or any other Amendment
     Document, or to consummate the transactions contemplated hereby and
     thereby.

               (d)   When duly executed and delivered, each of this Amendment
     and each other Amendment Document, and each of the Loan Documents, as
     amended hereby and thereby, will be a legal and binding instrument and
     agreement of each Restricted Person to the extent a party thereto,
     enforceable in accordance with its terms, (subject, as to enforcement of
     remedies, to applicable bankruptcy, insolvency and similar laws applicable
     to creditors' rights generally).

                          ARTICLE V. -- Miscellaneous

     (S) 5.1.  Ratification of Agreements.  The Original Agreement, as hereby
amended, is hereby ratified and confirmed in all respects.  The Loan Documents
(including but not limited to each Guaranty), as they may be amended or affected
by this Amendment or any other Amendment Document, are hereby ratified and
confirmed in all respects by each Restricted Person to the extent a party
thereto.  Any reference to the Credit Agreement in any Loan

                                       5

Document shall be deemed to refer to this Amendment also. The execution,
delivery and effectiveness of this Amendment and the other Amendment Documents
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of Administrative Agent, Canadian Agent or any Lender
under the Credit Agreement or any other Loan Document nor constitute a waiver of
any provision of the Credit Agreement or any other Loan Document.

     (S) 5.2.  Ratification of Security Documents.  Restricted Persons,
Administrative Agent, and Lenders each acknowledge and agree that any and all
indebtedness, liabilities or obligations arising under or in connection with the
LC Obligations or the Notes are Obligations and are secured indebtedness under,
are guarantied by, and are secured by, each and every Security Document to which
any Restricted Person is a party.  Each Restricted Person hereby re-pledges, re-
grants and re-assigns a security interest in and lien on every asset of the such
Restricted Person described as Collateral in any Security Document and re-
guarantees all Obligations, as amended hereby.

     (S) 5.3.  Ratification of Intercreditor Agreement.  Each Lender hereby
acknowledges and confirms that all Obligations under the Credit Agreement, as
amended hereby, and the "Obligations" under the Marketing Credit Agreement, as
amended on the date hereof, shall be and shall remain subject to the terms and
entitled to the benefits of the Intercreditor Agreement.

     (S) 5.4.  Survival of Agreements.  All representations, warranties,
covenants and agreements of the Restricted Persons herein shall survive the
execution and delivery of this Amendment and the performance hereof, including
without limitation the making or granting of each Loan, and shall further
survive until all of the Obligations are paid in full.  All statements and
agreements contained in any certificate or instrument delivered by any
Restricted Person hereunder or under the Credit Agreement to Administrative
Agent, Canadian Agent or any Lender shall be deemed to constitute
representations and warranties by, or agreements and covenants of, such
Restricted Person under this Amendment and under the Credit Agreement.

     (S) 5.5.  Loan Documents.  This Amendment and each other Amendment Document
is a Loan Document, and all provisions in the Credit Agreement pertaining to
Loan Documents apply hereto.

     (S) 5.6.  GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA IN ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY
AND PERFORMANCE.

     (S) 5.7.  Counterparts.  This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.

                                       6

     IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.

US BORROWER:                  PLAINS MARKETING, L.P.

                              By:   Plains All American Inc., General Partner

                              By:
                                 -----------------------------------------------
                                    Phil Kramer, Exec. Vice President

GUARANTORS:                   ALL AMERICAN, L.P.
                              PLAINS ALL AMERICAN PIPELINE, L.P.

                              By:   Plains All American Inc., General Partner

                              By:
                                 -----------------------------------------------
                                    Phil Kramer, Exec. Vice President

CANADIAN REVOLVER
BORROWER:                     PLAINS MARKETING CANADA, L.P.,

                              By:   PMC (Nova Scotia) Company,
                                    General Partner

                              By:
                                 -----------------------------------------------
                                    Phil Kramer, Exec. Vice Pres.

TERM BORROWER:                PMC (NOVA SCOTIA) COMPANY

                              By:
                                 -----------------------------------------------
                                    Phil Kramer, Exec. Vice Pres.

                                       7

LENDER PARTIES:               FLEET NATIONAL BANK,
                              Administrative Agent, LC Issuer and Lender

                              By:
                                 -----------------------------------------------
                                    Terrence Ronan, Managing Director

                              FIRST UNION NATIONAL BANK, Lender

                              By:
                                 -----------------------------------------------
                                    Robert R. Wetteroff, Sr. Vice Pres.

                              BANK OF AMERICA, N.A., Lender

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

                              BANK ONE, NA (MAIN OFFICE CHICAGO),
                              Lender

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

                              FORTIS CAPITAL CORP., Lender

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

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

                              U.S. BANK NATIONAL ASSOCIATION, Lender

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

                              BANK OF SCOTLAND, Lender

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

                                       8

                              WELLS FARGO BANK (TEXAS),
                              NATIONAL ASSOCIATION, Lender

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

                              THE BANK OF NOVA SCOTIA, Lender

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

                              CREDIT AGRICOLE INDOSUEZ, Lender

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

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

                              TORONTO DOMINION (TEXAS), INC., Lender

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

                              SOUTHWEST BANK OF TEXAS, N.A., Lender

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

                              UNION BANK OF CALIFORNIA, N.A., Lender

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

                                       9

                              COMERICA BANK-TEXAS, Lender

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

                              BNP PARIBAS, Lender

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

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

                              HELLER FINANCIAL, INC., Lender

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

                              THE TORONTO-DOMINION BANK,
                              Canadian Administration Agent

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

                              THE TORONTO-DOMINION BANK, Lender

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

                              BANK OF AMERICA CANADA, Lender

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

                                       10

                              BNP PARIBAS (CANADA), Lender

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

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

                              HELLER FINANCIAL CANADA, LTD., Lender

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

                              PILGRIM PRIME RATE TRUST
                              PILGRIM SENIOR INCOME FUND
                              ML CLO XX PILGRIM AMERICA (CAYMAN)
                               LTD.
                              PILGRIM CLO 1999 - 1 LTD.
                              SEQUILS - PILGRIM I, LTD.
                              PILGRIM AMERICA HIGH INCOME
                               INVESTMENTS LTD.
                              ML CLO XII PILGRIM AMERICA (CAYMAN)
                               LTD., each a Lender
                              By:   ING Pilgrim Investments, LLC,
                                    as its investment manager

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

                              MORGAN STANLEY DEAN WITTER PRIME
                               INCOME TRUST, Lender

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

                                       11

                              FLAGSHIP CLO-2001-1, Lender
                              By:   Flagship Capital Management, Inc.

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

                              FLAGSHIP CLO II, Lender

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

                              ARCHIMEDES FUNDING IV (CAYMAN), LTD.
                              NEMEAN CLO, LTD., each a Lender
                              By:   ING Capital Advisors LLC,
                                    as Investment Manager

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

                              ALLSTATE LIFE INSURANCE COMPANY
                              AIMCO CDO SERIES 2000-A, each a Lender

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

                              By:
                                 -----------------------------------------------
                                    Name:
                              Its Authorized Signatories

                              TYLER TRADING, INC., Lender

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

                              FIDELITY ADVISOR SERIES II: FIDELITY
                              ADVISOR FLOATING RATE HIGH INCOME
                              FUND
                        VARIABLE INSURANCE PRODUCTS FUND II:
                              ASSET MANAGER PORTFOLIO, each a Lender

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

                                       12

                              ELC (CAYMAN) LTD. 1999-II
                              APEX (IDM) CDO I, LTD., each a Lender

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

                              EMERALD ORCHARD LIMITED, Lender

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

                                       13

                             CONSENT AND AGREEMENT

     Each of the undersigned hereby consents to the provisions of this Amendment
and the transactions contemplated herein and hereby (i) acknowledges and agrees
that any and all indebtedness, liabilities or obligations arising under or in
connection with the Notes are Obligations and are secured indebtedness under,
and are secured by, each and every Security Document to which it is a party,
(ii) re-pledges, re-grants and re-assigns a security interest in and lien on all
of its assets described as collateral in any Security Document, (iii) ratifies
and confirms its Guaranty dated May 4, 2001 made by it for the benefit of
Administrative Agent and Lenders, and (iv) expressly acknowledges and agrees
that the undersigned guarantees all indebtedness, liabilities and obligations
arising under or in connection with any and all Notes pursuant to the terms of
such Guaranty, and agrees that its obligations and covenants thereunder are
unimpaired hereby and shall remain in full force and effect.

                              PLAINS MARKETING CANADA LLC

                              By:   Plains Marketing, L.P., its sole member

                                    By:   Plains All American Inc.,
                                          its general partner

                                    By:
                                       -----------------------------------------
                                          Phil Kramer, Exec. Vice President

                                       14

                                                                    EXHIBIT 10.9

TO:  The Lenders under the Amended and Restated Credit Agreement (REVOLVING
     CREDIT FACILITY) dated as of May 4, 2001 (the "Agreement") among Plains
     Marketing, L.P. ("US Borrower"), All American Pipeline, L.P. and Plains
     All American Pipeline, L.P., as guarantors, Fleet National Bank, as
     Administrative Agent, The Toronto-Dominion Bank, as Canadian Agent, PMC
     (Nova Scotia) Company ("Term Borrower"), Plains Marketing Canada, L.P.
     ("Canadian Revolver Borrower"), and the Lenders named therein.

           SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Ladies and Gentlemen:

     Plains MLP proposes to issue Indebtedness pursuant to Section 7.1(g) of the
Agreement and has requested that Section 7.1(g) of the Agreement be amended to
permit such Indebtedness to be incurred with rights of optional redemption,
provided that each Restricted Person agree not to exercise such right without
the written consent of Majority Lenders, and otherwise as provided in Section
7.1(g).  Accordingly, to effect this agreement on each Restricted Person, clause
(1) of Section 7.1(g) of the Agreement is hereby amended to read as follows:

     (1) such Indebtedness shall not permit mandatory redemption by any holder
     thereof solely at the option of any such holder, nor any stated maturity,
     in each case prior to the Maturity Date,

and a new proviso is hereby added at the end of Section 7.1(g) immediately
following ";", to read as follows:

     provided, further, each Restricted Person hereby covenants and agrees that
     it will not optionally redeem, or make any payment on or with respect to
     the optional redemption of such Indebtedness (or any portion thereof) prior
     to the Maturity Date without the written consent of Majority Lenders;

     The effectiveness of this Amendment shall be conditioned upon the
contemporaneous effectiveness of an amendment to the Marketing Credit Agreement
on substantially identical terms.  Please execute a copy of this letter in the
space provided below to evidence your consent to the foregoing and fax a copy to
the Administrative Agent (c/o Terry Ronan) at 617-434-3652 by 12:00 noon,
Tuesday, June 26th.  The foregoing amendment shall become effective upon consent
of Majority Lenders.

     Thank you for your assistance on such short notice.

                                   FLEET NATIONAL BANK, Administrative Agent

                                   By:
                                      ---------------------------------------
                                       Terrence Ronan, Managing Director

We hereby consent to the foregoing

[Name of Lender]

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

PLAINS MARKETING, L.P., US Borrower

By:  Plains AAP, L.P., General Partner

By:  Plains All American GP LLC, its general partner

     By:
        ---------------------------------------
              Tim Moore, Vice President

PLAINS MARKETING CANADA, L.P., Canadian Revolver Borrower

By:  PMC (Nova Scotia) Company, General Partner

By:
   ---------------------------------------
     Tim Moore, Vice President

PMC (NOVA SCOTIA) COMPANY, Term Borrower

By:
   ---------------------------------------
     Tim Moore, Vice President

PLAINS ALL AMERICAN PIPELINE, L.P., Guarantor
ALL AMERICAN, L.P., Guarantor

By:  Plains AAP, L.P., General Partner

By:  Plains All American GP LLC, its general partner

     By:
        ---------------------------------------
              Tim Moore, Vice President