================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                                   FORM 8-K

                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

       Date of Report (Date of earliest event reported)--August 1, 2002

                      Plains All American Pipeline, L.P.
            (Exact name of Registrant as specified in its charter)

                                                
        DELAWARE                    0-9808                   76-0582150
     (State or other       (Commission File Number)       (I.R.S. Employer
      jurisdiction                                       Identification No.)
   of incorporation or
      organization)

                          333 Clay Street, Suite 1600
                             Houston, Texas 77002
                                (713) 646-4100
              (Address, including zip code, and telephone number,
       including area code, of Registrant's principal executive offices)

================================================================================

Item 2.  Acquisition of Assets

    Plains All American Pipeline, L.P. (the "Partnership") acquired certain
businesses from Shell Pipeline Company, L.P. and Equilon Enterprises LLC
including their interests in the Basin Pipeline System, the Rancho Pipeline
System and the Permian Basin Gathering System. The purchase price of
approximately $322.7 million is net of interest earned on the deposit and the
settlement of pre-existing accounts receivable and inventory balances and
purchase price adjustments as provided for in the amended purchase and sale
agreement, and includes other transaction and closing costs. The Partnership
funded the acquisition with borrowings under its revolving credit facility, for
which Fleet National Bank serves as agent. The acquisition closed on August 1,
2002, which is also the effective date. Certain financial statements, including
carve out financial statements of the businesses acquired and pro forma
financial statements, are attached to this Form 8-K as Exhibits 99.1, 99.2 and
99.3.

Item 7.  Financial Statements and Exhibits

    (c)  Exhibits

  
23.1 Consent of PricewaterhouseCoopers LLP.

99.1 Basin Pipeline System, Rancho Pipeline System and the Permian Basin Gathering
     System, Unaudited Combined Interim Financial Statements as of and for the six months
     ended June 30, 2002.

99.2 Basin Pipeline System, Rancho Pipeline System and the Permian Basin Gathering
     System, Audited Combined Financial Statements as of and for the year ended December
     31, 2001.

99.3 Unaudited Pro Forma Consolidated Financial Statements of Plains All American
     Pipeline, L.P.

99.4 Purchase and Sale Agreement, effective May 2, 2002 by and between Shell Pipeline
     Company LP, a Delaware limited partnership (formerly known as Equilon Pipeline
     Company LLC) and Equilon Enterprises LLC dba Shell Oil Products US, a Delaware
     limited liability company (individually "Shell Pipeline" or "SOP US" and collectively
     "Seller") and Plains All American Pipeline, L.P. ("Buyer"), a Delaware limited
     partnership.

                                      2

                                  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 hereunto duly authorized.

                                          PLAINS ALL AMERICAN PIPELINE, L.P.

Date: August 9, 2002
                                          By: Plains AAP, L.P., its general
                                             partner

                                          By: Plains All American GP LLC, its
                                             general partner

                                               /s/ Phillip D. Kramer
                                          By:________________________________
                                             Phillip D. Kramer
                                             Executive Vice President and
                                              Chief Financial Officer
                                               (Principal Financial and
                                                Accounting Officer)

                                                /s/ Greg L. Armstrong
                                          By:________________________________
Date: August 9, 2002
                                             Greg L. Armstrong
                                             Chairman of the Board, Chief
                                              Executive Officer and Director of
                                              Plains All American GP LLC
                                               (Principal Executive Officer)

                                      3

                               Index to Exhibits

  

23.1 Consent of PricewaterhouseCoopers LLP.

99.1 Basin Pipeline System, Rancho Pipeline System and the Permian Basin Gathering System,
     Unaudited Combined Interim Financial Statements as of and for the six months ended
     June 30, 2002.

99.2 Basin Pipeline System, Rancho Pipeline System and the Permian Basin Gathering System,
     Audited Combined Financial Statements as of and for the year ended December 31, 2001.

99.3 Unaudited Pro Forma Consolidated Financial Statements of Plains All American Pipeline,
     L.P.

99.4 Purchase and Sale Agreement, effective May 2, 2002 by and between Shell Pipeline Company
     LP, a Delaware limited partnership (formerly known as Equilon Pipeline Company LLC) and
     Equilon Enterprises LLC dba Shell Oil Products US, a Delaware limited liability company
     (individually "Shell Pipeline" or "SOP US" and collectively "Seller") and Plains All
     American Pipeline, L.P. ("Buyer"), a Delaware limited partnership.

                                      4

                                                                   EXHIBIT 23.1

                      CONSENT OF INDEPENDENT ACCOUNTANTS

    We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File Nos. 333-91141, 333-54118, 333-74920) and Form S-3
(File Nos. 333-59224, 333-68446) of Plains All American Pipeline, L.P. of our
report dated August 2, 2002 relating to the financial statements of Basin
Pipeline, Rancho Pipeline and the Permian Basin Gathering System, which appears
in this Current Report on Form 8-K of Plains All American Pipeline, L.P. dated
August 9, 2002.

PricewaterhouseCoopers LLP

Houston, Texas
August 9, 2002

                                      1

                                                                   EXHIBIT 99.1

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System
                            Transportation Business
                Unaudited Combined Interim Financial Statements
                                 June 30, 2002

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System

                            Transportation Business

                            Combined Balance Sheet

                                                June 30,   December 31,
                                                  2002         2001
                                               ----------- ------------
                                               (unaudited)
                                                (dollars in thousands)
                        Assets
                                                     
        Current assets:
           Accounts receivable:
               Trade..........................   $ 4,595     $ 5,017
               Reimbursement of expenses......       439         858
           Allowance oil inventory............    16,833      16,105
           Materials and supplies.............       613         545
                                                 -------     -------
                                                  22,480      22,525
        Property and equipment, net...........    31,392      31,951
                                                 -------     -------
                                                 $53,872     $54,476
                                                 =======     =======
        Liabilities and Owner's Net Investment
        Current liabilities:
           Accounts payable--trade............   $     3     $    48
           Payable to Parent..................       132          86
           Environmental remediation..........     1,014         998
           Property tax payable...............     1,135       1,208
                                                 -------     -------
                                                   2,284       2,340
        Commitments and contingencies (Note 6)
        Noncurrent liabilities:
           Environmental remediation..........     1,788         127
               Total liabilities..............     4,072       2,467
        Owner's net investment................    49,800      52,009
                                                 -------     -------
                                                 $53,872     $54,476
                                                 =======     =======

  The accompanying notes are an integral part of these financial statements.

                                      2

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System
                            Transportation Business

            Combined Statement of Income and Owner's Net Investment

              Six Months Ended June 30, 2002 and 2001 (unaudited)

                                                       2002        2001
                                                      -------     -------
                                                     (dollars in thousands)
                                                           
         Revenues:
            Pipeline tariffs........................ $24,124     $26,781
            Allowance oil...........................   1,714       3,366
            Other...................................                 693
                                                      -------     -------
                                                      25,838      30,840
                                                      -------     -------
         Costs and expenses:
            Operating costs.........................  12,284      11,867
            General and administrative..............   9,907       9,369
            Depreciation............................   1,311       1,139
                                                      -------     -------
                                                      23,502      22,375
                                                      -------     -------
         Net income.................................   2,336       8,465
         Deemed distribution to parent..............  (4,545)     (4,895)
         Owner's net investments beginning of period  52,009      43,375
                                                      -------     -------
         Owner's net investment, end of period...... $49,800     $46,945
                                                      =======     =======

  The accompanying notes are an integral part of these financial statements.

                                      3

 Basin Pipeline System, Rancho Pipeline System and the Permian Basin Gathering
                                    System
                            Transportation Business

                       Combined Statement of Cash Flows

              Six Months Ended June 30, 2002 and 2001 (unaudited)

                                                                                     2002        2001
                                                                                    -------     -------
                                                                                   (dollars in thousands)
                                                                                         
Cash flows provided by operating activities:
 Net income....................................................................... $ 2,336     $ 8,465
 Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation...................................................................   1,311       1,139
   Change in allowance oil inventory..............................................    (728)     (2,867)
   (Increase) decrease in working capital:
     Receivables..................................................................     841      (1,195)
     Inventories..................................................................     (68)        337
     Payables and accruals........................................................     (56)       (394)
     Environmental remediation liability--noncurrent..............................   1,661         (17)
                                                                                    -------     -------
       Net cash provided by operating activities..................................   5,297       5,468
Cash flows (used for) investing activities:
 Capital expenditures.............................................................    (752)       (573)
       Net cash used for investing activities.....................................    (752)       (573)
Cash flows (used for) financing activities:
 Deemed distributions to parent company...........................................  (4,545)     (4,895)
       Net cash used for financing activities.....................................  (4,545)     (4,895)
Net increase in cash and cash equivalents.........................................      --          --
Cash and cash equivalents at beginning of period..................................      --          --
                                                                                    -------     -------
Cash and cash equivalents at end of period........................................ $    --     $    --
                                                                                    =======     =======

  The accompanying notes are an integral part of these financial statements.

                                      4

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

                    NOTES TO COMBINED FINANCIAL STATEMENTS

                           June 30, 2002 (unaudited)

1.  Organization and Basis of Presentation

    The accompanying unaudited combined financial statements present the
combined assets, liabilities, revenues and expenses of the historical
operations of the transportation businesses comprised of the Basin Pipeline
System, the Rancho Pipeline System and the Permian Basin Gathering System
(collectively the Businesses) owned by Equilon Enterprises LLC dba Shell Oil
Products US and related entities (collectively referred to as Equilon). The
Businesses are involved in the transportation of crude oil.

    The unaudited combined financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to SEC
rules and regulations. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the
United States of America for complete financial statements. In the opinion of
management, all adjustments, consisting only of normal, recurring adjustments
considered necessary for a fair presentation, have been included. The results
of operations for the six months ended June 30, 2002, should not be taken as
indicative of the results to be expected for the full year. For further
information, refer to the combined financial statements and notes thereto for
the year ended December 31, 2001.

    Throughout the period covered by the unaudited combined financial
statements, Equilon owned and managed the Businesses' operations. Prior to
2002, Equilon was owned by Shell Oil Company and its consolidated subsidiaries
(Shell Oil) with a 56 percent equity interest and Texaco Inc. and its
consolidated subsidiaries (Texaco) with a 44 percent equity interest. In 2002,
Shell acquired Texaco's equity interest. The accompanying unaudited combined
financial statements do not include any adjustments related to push down
accounting as a result of Shell Oil's acquisition and are prepared in
accordance with SEC rules and regulations based on Equilon's historical
accounting records.

    The accompanying unaudited combined financial statements are presented on a
carve-out basis to include the historical operations of the Businesses owned by
Equilon. In this context, no direct owner relationship existed among the
various operations comprising the Businesses as described above. Accordingly,
Equilon's net investment in the Businesses (owner's net investment) is shown in
lieu of stockholder's equity in the combined financial statements.

    The unaudited combined statement of income and owner's net investment
includes all revenues and costs directly attributable to the Businesses,
including costs for facilities, functions and services used by the Businesses.
The results of operations also include allocations, generally based on total
payroll costs, of Equilon's general corporate expenses primarily related to
corporate and regional payroll costs.

    Throughout the period covered by the unaudited combined financial
statements, Equilon has provided cash management services to the Businesses
through centralized treasury systems. As a result, all charges and cost
allocations for the Businesses discussed above covered by such centralized
treasury systems were deemed to have been paid by the Businesses to Equilon, in
cash, during the period in which the cost was recorded in the unaudited
combined financial statements.

                                      5

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                           June 30, 2002 (unaudited)

    All of the allocations and estimates in the unaudited combined financial
statements as of June 30, 2002 and for the six months ended June 30, 2002 and
2001 were based on assumptions that Equilon management believes were reasonable
under the circumstances. However, these allocations and estimates are not
necessarily indicative of the costs and expenses that would have resulted if
the Businesses had been operated as a separate entity. It is not practicable to
estimate the costs and expenses that would have resulted on a stand-alone basis.

2.  New Accounting Standards

    In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 142 (Goodwill and Other
Intangible Assets). This statement requires that goodwill no longer be
amortized but should be tested for impairment at least on an annual basis.
Other intangible assets are to be amortized over their useful life and reviewed
for impairment in accordance with the provisions of SFAS No. 121 (Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
of). Intangible assets with an indefinite useful life can no longer be
amortized until its useful life becomes determinable. SFAS 142 is effective for
fiscal years beginning after December 15, 2001, however, it does apply to any
goodwill acquired in a business combination completed after June 30, 2001. The
adoption of SFAS 142 did not have any impact to the Businesses.

    In August 2001, the FASB issued SFAS 143 (Accounting for Obligations
Associated with the Retirement of Long-Lived Assets). This statement requires
the following: (a) an existing legal obligation associated with the retirement
of a tangible long-lived asset be recognized as a liability when incurred and
the amount of the liability be initially measured at fair value, (b) an entity
recognize subsequent changes in the liability that result from the passage of
time and revisions in either the timing or amount of estimated cash flows, and
(c) upon initially recognizing a liability for an asset retirement obligation,
an entity capitalize the cost by recognizing an increase in the carrying amount
of the related long-lived asset. SFAS 143 will be effective for financial
statements issued for fiscal years beginning after June 15, 2002. The
Businesses are currently evaluating the effects of this pronouncement.

    In October 2001, the FASB issued SFAS 144 (Accounting for the Impairment or
Disposal of Long-Lived Assets). This statement supersedes SFAS 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of. The requirements of this statement provide that long-lived assets
that are to be disposed of by sale be measured at the lower of book value or
fair value less cost to sell. The scope of discontinued operations will be
expanded to include all components of an entity with operations that can be
distinguished from the rest of the entity and will be eliminated from the
ongoing operations of the entity in a disposal transaction. The provisions of
this statement are effective for fiscal years beginning after December 15,
2001. The adoption of SFAS 144 did not have a significant impact on the
Businesses.

3.  Allowance Oil Inventory

    During the six months ended June 30, 2002 the Businesses sold allowance oil
inventory for a loss of $0.6 million. During the six months ended June 30, 2001
the sale of allowance oil inventory was not material.

                                      6

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                           June 30, 2002 (unaudited)

4.  Other Revenue

    Other revenue consists of a fixed fee received from third parties in
connection with selling microwave frequencies and conversion to newer
technologies. The microwave frequencies were used to transmit data related to
the pipeline such as temperatures, pressure and volumes. The newer technologies
relate to the use of various methods such as cellular and satellite systems.
The costs incurred to convert to the newer technologies were not material.

5.  Related Party Transactions

    The Businesses have entered into transactions with Shell, Texaco and
Equilon, including the affiliates of these companies. Such transactions are in
the ordinary course of business and include the transportation of crude oil and
petroleum products.

    The aggregate amounts of such transactions for the six months ended June
30, 2002 and 2001 were as follows:

                                            Six months ended
                                               June 30,
                    -                       ----------------------
                                             2002        2001
                                              -------    -------
                                            (dollars in thousands)
                                                  
                    Pipeline tariff revenue $16,636     $11,450

6.  Environmental Liabilities

    Similar to other companies in the crude oil transportation industry, the
Businesses incur costs for preventive and corrective actions at facilities and
those environmental costs of operations and remediation activities are accrued
on a basis consistent with the accounting policy set forth in prior periods.
The Businesses may be obligated to take remedial action as a result of the
enactment of laws or the issuance of new regulations or to correct for the
effects of the Businesses' actions on the environment. Most of the expenditures
to fulfill these obligations relate to facilities where past operations
followed practices and procedures that were considered appropriate under
regulations, if any, existing at the time, but may now require investigatory or
remedial work to adequately protect the environment or address new regulatory
requirements. The Businesses have accrued $2.8 million at June 30, 2002 for
planned environmental remediation activities, and this accrual, in management's
opinion, is appropriate based on existing facts and circumstances. Additions to
the accrual during the six months ended June 30, 2002 and 2001 were
approximately $2 million and zero, respectively. The increase in the accrual
during the six months ended June 30, 2002 was primarily related to the
acceleration of timing of the remediation efforts which caused a change in the
remediation methods to be used.

                                      7

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                           June 30, 2002 (unaudited)

7.  Subsequent Event

    In May 2002, Equilon entered into a purchase and sale agreement (the
agreement) with Plains All American Pipeline, L.P. (PAA) to sell the Businesses
for approximately $305 million in cash, excluding direct acquisition and other
costs. The sale excluded crude oil held in inventory for shippers and allowance
oil inventory held for Equilon and other working capital items and branding
rights, trademarks and other similar property. The sale closed on August 1,
2002.

                                      8

                                                                   EXHIBIT 99.2

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System
                            Transportation Business
                     Audited Combined Financial Statements
                               December 31, 2001

                       Report of Independent Accountants

To the Board of Directors of
Plains All American GP LLC

    We have audited the accompanying combined balance sheet of the Basin Pipe
Line System, Rancho Pipe Line System and the Permian Basin Gathering System
Transportation Businesses (the Businesses) as of December 31, 2001, and the
related combined statements of income and owner's net investment and of cash
flows for the year then ended. These combined financial statements are the
responsibility of the Businesses' management. Our responsibility is to express
an opinion on these combined financial statements based on our audit.

    We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the combined
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe
that our audit provides a reasonable basis for our opinion.

    As described in Note 1, the accompanying combined financial statements were
prepared for the purpose of complying with certain rules and regulations of the
Securities and Exchange Commission for inclusion in a Form 8-K to be filed in
connection with the acquisition of the Businesses by Plains All American
Pipeline, L.P.

    In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Businesses at
December 31, 2001, and the results of their operations and their cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.

PricewaterhouseCoopers LLP

Houston, Texas
August 2, 2002

                                      2

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System

                            Transportation Business

                            Combined Balance Sheet

                               December 31, 2001

                                                      (dollars in
                                                      thousands)
                                                   
                               Assets
               Current assets:
                Accounts receivable:
                  Trade..............................   $ 5,017
                  Reimbursement of expenses..........       858
                Allowance oil inventory..............    16,105
                Materials and supplies...............       545
                                                        -------
                                                         22,525
               Property and equipment, net...........    31,951
                                                        -------
                                                         54,476
                                                        =======
               Liabilities and Owner's Net Investment
               Current liabilities:
                Accounts payable--trade..............        48
                Payable to parent....................        86
                Environmental remediation............       998
                Property tax payable.................     1,208
                                                        -------
                                                          2,340
               Commitments and contingencies (Note 8)
               Noncurrent liabilities:
                Environmental remediation............       127
                                                        -------
                    Total liabilities................     2,467
               Owner's net investment................    52,009
                                                        -------
                                                        $54,476
                                                        =======

  The accompanying notes are an integral part of these financial statements.

                                      3

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System

                            Transportation Business

            Combined Statement of Income and Owner's Net Investment

                         Year Ended December 31, 2001

                                                       (dollars in
                                                       thousands)
                                                    
             Revenues:
              Pipeline tariffs........................   $52,853
              Allowance oil...........................     6,144
              Other...................................       693
                                                         -------
                                                          59,690
                                                         -------
             Costs and expenses:
              Operating costs.........................    26,226
              General and administrative..............    16,571
              Depreciation............................     2,375
                                                         -------
                                                          45,172
                                                         -------
             Net income...............................    14,518
             Deemed distribution to parent............    (5,884)
             Owner's net investment, beginning of year    43,375
                                                         -------
             Owner's net investment, end of year......   $52,009
                                                         =======

  The accompanying notes are an integral part of these financial statements.

                                      4

               Basin Pipeline System, Rancho Pipeline System and
                      the Permian Basin Gathering System

                            Transportation Business

                       Combined Statement of Cash Flows

                               December 31, 2001

                                                                                   (dollars in
                                                                                   thousands)
                                                                                
Cash flows provided by operating activities:
 Net income.......................................................................   $14,518
 Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation...................................................................     2,375
   Change in allowance oil inventory..............................................    (9,230)
   (Increase) decrease in working capital:
     Receivables..................................................................      (842)
     Inventories..................................................................       245
     Payables and accruals........................................................       658
   Environmental remediation liability--noncurrent................................        53
                                                                                     -------
       Net cash provided by operating activities..................................     7,777
Cash flows used for investing activities:
 Capital expenditures.............................................................    (1,893)
       Net cash used for investing activities.....................................    (1,893)
                                                                                     -------
Cash flows used for financing activities:.........................................
 Deemed distributions to parent company...........................................    (5,884)
       Net cash used for financing activities.....................................    (5,884)
Net increase in cash and cash equivalents.........................................        --
Cash and cash equivalents at beginning of period..................................        --
                                                                                     -------
Cash and cash equivalents at end of period........................................   $    --
                                                                                     =======

  The accompanying notes are an integral part of these financial statements.

                                      5

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

                    NOTES TO COMBINED FINANCIAL STATEMENTS

                               December 31, 2001

1.  Organization and Basis of Presentation

    The accompanying combined financial statements present, in conformity with
accounting principles generally accepted in the United States of America, the
combined assets, liabilities, revenues and expenses of the historical
operations of the transportation businesses comprised of the Basin Pipeline
System, the Rancho Pipeline System and the Permian Basin Gathering System
(collectively the Businesses) owned by Equilon Enterprises LLC dba Shell Oil
Products US and related entities (collectively referred to as Equilon).
Throughout the period covered by the combined financial statements, Equilon
owned and managed the Businesses' operations. Prior to 2002, Equilon was owned
by Shell Oil Company and its consolidated subsidiaries (Shell Oil) with a 56
percent equity interest and Texaco Inc. and its consolidated subsidiaries
(Texaco) with a 44 percent equity interest. In 2002, Shell acquired Texaco's
equity interest. The accompanying combined financial statements do not include
any adjustments related to push down accounting as a result of Shell Oil's
acquisition and are prepared in accordance with SEC rules and regulations based
on Equilon's historical accounting records.

    The Basin Pipeline System consists of all the partnership interests in
Basin Pipeline Holdings LP which owns an undivided interest of approximately 85
percent in an approximately 514 mile crude oil pipeline from Jal, New Mexico to
Cushing, Oklahoma. The Rancho Pipeline System consists of all the partnership
interests in Rancho Pipeline Holdings LP which owns an undivided interest of
approximately 55 percent in an approximately 445 mile crude oil pipeline from
Mesa Station in McCamey, Texas to Houston, Texas. The Businesses are also the
operator of the Basin Pipeline and Rancho Pipeline Systems. The Permian Basin
Gathering System consists of various gathering pipelines and stations and real
property located in western Texas. The combined financial statements include
the Businesses' pro rata share of the assets, liabilities, revenues and
expenses primarily since the undivided interests are not subject to joint
control and the Businesses are only responsible for their pro rata share of
direct costs.

    The accompanying combined financial statements are presented on a carve-out
basis to include the historical operations of the Businesses owned by Equilon.
In this context, no direct owner relationship existed among the various
operations comprising the Businesses as described above. Accordingly, Equilon's
net investment in the Businesses (owner's net investment) is shown in lieu of
stockholder's equity in the combined financial statements.

    The combined statement of income and owner's net investment includes all
revenues and costs directly attributable to the Businesses, including costs for
facilities, functions and services used by the Businesses. The results of
operations also include allocations, generally based on total payroll costs, of
Equilon's general corporate expenses primarily related to corporate and
regional payroll costs.

    Throughout the period covered by the combined financial statements, Equilon
has provided cash management services to the Businesses through centralized
treasury systems. As a result, all charges and cost allocations for the
Businesses discussed above covered by such centralized treasury systems were
deemed to have been paid by the Businesses to Equilon, in cash, during the
period in which the cost was recorded in the combined financial statements.

                                      6

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                               December 31, 2001

    All of the allocations and estimates in the combined financial statements
were based on assumptions that Equilon management believes were reasonable
under the circumstances. However, these allocations and estimates are not
necessarily indicative of the costs and expenses that would have resulted if
the Businesses had been operated as a separate entity. It is not practicable to
estimate the costs and expenses that would have resulted on a stand-alone basis.

2.  Significant Accounting Policies

  Use of Estimates

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues and expenses and the disclosures of contingent
assets and liabilities. Although management believes these estimates are
reasonable, actual results could differ from those estimates.

  Revenue Recognition

    Revenues for the transportation of crude are recognized (1) based upon
regulated tariff rates and the related transportation volumes and (2) when the
delivery of crude is made to the shipper or another common carrier pipeline.
Allowance oil revenue is recognized when the Businesses receive the allowance
oil volumes which is valued at current market value. Any allowance oil sold is
presented as a by-product and recorded in revenue net of the selling price and
the cost of the inventory when initially recorded. The sale of allowance oil
inventory was not material.

  Receivable for Reimbursement of Expenses

    The receivable for reimbursement of expenses relates to reimbursement from
the other owners of the undivided interests discussed in Note 1 when the
Businesses have paid expenses on their behalf.

  Property and Equipment

    Crude oil pipeline and gathering assets are carried at cost. Costs subject
to depreciation are net of expected salvage values and depreciation is
calculated on a straight-line basis over the estimated useful lives of the
respective assets as follows:

                                           
                       Line pipe............. 20-25 years
                       Pump station equipment 20-25 years
                       Oil tanks............. 20-25 years
                       Buildings and other...  5-25 years

    Acquisitions and improvements are capitalized; maintenance and repairs are
expensed as incurred.

                                      7

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                               December 31, 2001

  Impairment of Long-Lived Assets

    The carrying values of long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of any asset may not be recoverable. Recoverability of the carrying value of an
asset is assessed by reference to an estimate of the asset's undiscounted
future net cash flows. Measurement of any impairment would include a comparison
of discounted estimated future net cash flows to the net carrying value of the
related assets.

  Inventories

    Inventories consist of allowance oil held in pipelines and materials and
supplies. Allowance oil is recorded when received at the current fair value
based on a percentage, as specified in the published tariff document, of volume
transported. Any transportation product gains or losses for measurement
differences, evaporation or other reasons adjust the allowance oil and is
recorded in operating costs. This inventory is valued at lower of cost or
market with its cost determined using the average cost method based on the
amount initially recorded.

    Materials and supplies are recorded at purchased costs using the average
cost method and valued at lower of cost or market.

  Environmental Liabilities

    The Businesses accrue for environmental remediation liabilities when it is
probable that such liabilities exist, based on past events or known conditions,
and the amount of such liability can be reasonably estimated. If the Businesses
can only estimate a range of probable liabilities, the minimum future
undiscounted expenditure necessary to satisfy the Businesses' future obligation
is accrued.

    The Businesses determine the appropriate amount of each obligation by
considering all of the available data, including technical evaluations of the
currently available facts, interpretation of existing laws and regulations,
prior experience with similar sites and the estimated reliability of financial
projections.

    The Businesses adjust the environmental liabilities, as required, based on
the latest experience with similar sites, changes in environmental laws and
regulations or their interpretation, development of new technology, or new
information related to the extent of the Businesses' obligation. Other
environmental expenditures, principally maintenance or preventive in nature,
are expensed or capitalized as appropriate.

  Income Taxes

    The Businesses have not historically incurred income tax expense as the
Businesses were included as part of Equilon, which, in accordance with the
provisions of the Internal Revenue Code, is not subject to U.S. Federal income
taxes. Rather, each partner includes its allocated share of the partnership's
income or loss in its own federal and state income tax returns.

                                      8

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                               December 31, 2001

3.  Other Revenue

    Other revenue consists of a fixed fee received from third parties in
connection with selling microwave frequencies and conversion to newer
technologies. The microwave frequencies were used to transmit data related to
the pipeline such as temperatures, pressure and volumes. The newer technologies
relate to the use of various methods such as cellular and satellite systems.
The costs incurred to convert to the newer technologies were not material.

4.  Property and Equipment

                                              Accumulated
                                       Cost   depreciation   Net
              -                      -------- ------------ -------
                                                  
              Line pipe............. $ 81,254   $(64,698)  $16,556
              Oil tanks.............   11,414     (9,393)    2,021
              Pump station equipment   26,032    (14,492)   11,540
              Buildings.............    5,842     (4,369)    1,473
              Land..................      361                  361
                                     --------   --------   -------
                                     $124,903   $(92,952)  $31,951
                                     ========   ========   =======

5.  Related Party Transactions

    The Businesses have entered into transactions with Shell, Texaco and
Equilon, including the affiliates of these companies. Such transactions are in
the ordinary course of business and include the transportation of crude oil and
petroleum products.

    The aggregate amounts of such transactions for the year ended December 31,
2001 were as follows:

                                              (dollars in
                                              thousands)
                                           
                      Pipeline tariff revenue   $24,935

    The accounts payable to parent primarily represents maintenance costs and
general and administrative costs charged to the Businesses by the parent and
its affiliates.

6.  Pension Plans and Other Postretirement Benefits

    Certain of the Businesses' employees participate in the Alliance Pension
Plan (a defined benefit plan) and the Alliance Savings Plan (a defined
contribution plan). Also, certain of the Businesses' employees participate in
Equilon sponsored benefit plans that provide healthcare benefits. Such plans
are unfunded, and the costs are shared by Equilon and its employees. The
Businesses' allocated expense related to these plans was approximately $1.2
million during the year ended December 31, 2001.

                                      9

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                               December 31, 2001

7.  New Accounting Pronouncements

    In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 142 (Goodwill and Other
Intangible Assets). This statement requires that goodwill no longer be
amortized but should be tested for impairment at least on an annual basis.
Other intangible assets are to be amortized over their useful life and reviewed
for impairment in accordance with the provisions of SFAS No. 121 (Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
of). Intangible assets with an indefinite useful life can no longer be
amortized until its useful life becomes determinable. SFAS 142 is effective for
fiscal years beginning after December 15, 2001, however, it does apply to any
goodwill acquired in a business combination completed after June 30, 2001. The
adoption of SFAS 142 did not have any impact to the Businesses.

    In August 2001, the FASB issued SFAS 143 (Accounting for Obligations
Associated with the Retirement of Long-Lived Assets). This statement requires
the following: (a) an existing legal obligation associated with the retirement
of a tangible long-lived asset be recognized as a liability when incurred and
the amount of the liability be initially measured at fair value, (b) an entity
recognize subsequent changes in the liability that result from the passage of
time and revisions in either the timing or amount of estimated cash flows, and
(c) upon initially recognizing a liability for an asset retirement obligation,
an entity capitalize the cost by recognizing an increase in the carrying amount
of the related long-lived asset. SFAS 143 will be effective for financial
statements issued for fiscal years beginning after June 15, 2002. The
Businesses are currently evaluating the effects of this pronouncement.

    In October 2001, the FASB issued SFAS 144 (Accounting for the Impairment or
Disposal of Long-Lived Assets). This statement supersedes SFAS 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of. The requirements of this statement provide that long-lived assets
that are to be disposed of by sale be measured at the lower of book value or
fair value less cost to sell. The scope of discontinued operations will be
expanded to include all components of an entity with operations that can be
distinguished from the rest of the entity and will be eliminated from the
ongoing operations of the entity in a disposal transaction. The provisions of
this statement are effective for fiscal years beginning after December 15,
2001. The adoption of SFAS 144 did not have a significant impact on the
Businesses.

8.  Commitments and Contingencies

    The Businesses lease certain real property, equipment and operating
facilities under various operating leases. The Businesses also incur costs
associated with leased land, rights-of-way, permits and regulatory fees, the
contracts for which generally extend beyond one year but can be cancelled at
any time should they not be required for operations. Future noncancellable
commitments related to these items at December 31, 2001 were not significant.

    Total lease expense incurred for 2001 was approximately $0.5 million.

                                      10

               BASIN PIPELINE SYSTEM, RANCHO PIPELINE SYSTEM AND
                      THE PERMIAN BASIN GATHERING SYSTEM
                            TRANSPORTATION BUSINESS

              NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

                               December 31, 2001

    The Businesses are subject to possible loss contingencies including actions
or claims based on environmental laws, federal regulations, and other matters.
While it is impossible to ascertain the ultimate legal and financial liability
with respect to many such contingent liabilities and commitments, the
Businesses have accrued amounts (undiscounted) related to certain such
liabilities where the outcome is deemed both probable and reasonably measurable.

    Similar to other companies in the crude oil transportation industry, the
Businesses incur costs for preventive and corrective actions at facilities and
those environmental costs of operations and remediation activities are accrued
on a basis consistent with the accounting policy set forth in Note 2. The
Businesses may be obligated to take remedial action as a result of the
enactment of laws or the issuance of new regulations or to correct for the
effects of the Businesses' actions on the environment. Most of the expenditures
to fulfill these obligations relate to facilities where past operations
followed practices and procedures that were considered appropriate under
regulations, if any, existing at the time, but may now require investigatory or
remedial work to adequately protect the environment or address new regulatory
requirements. The Businesses have accrued $1.1 million at December 31, 2001 for
planned environmental remediation activities, and this accrual, in management's
opinion, is appropriate based on existing facts and circumstances. Expensed
environmental costs were approximately $1 million for the year ended December
31, 2001.

9.  Subsequent Event

    Subsequent to December 31, 2001, Equilon entered into a purchase and sale
agreement (the agreement) with Plains All American Pipeline, L.P. (PAA) to sell
the Businesses for approximately $305 million in cash, excluding direct
acquisition and other costs. The sale excluded crude oil held in inventory for
shippers and allowance oil inventory held for Equilon and other working capital
items and branding rights, trademarks and other similar property. The sale
closed on August 1, 2002.

                                      11

                                                                   Exhibit 99.3

                      PLAINS ALL AMERICAN PIPELINE, L.P.
             UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

    Plains All American Pipeline, L.P. ("PAA") is a Delaware limited
partnership 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. The following unaudited pro forma consolidated financial
statements are presented to give effect to the transaction described below:

        The acquisition of certain businesses from Shell Pipeline Company
    ("Shell"), including its interests in the Basin Pipeline System, the Rancho
    Pipeline System and the Permian Basin Gathering System (the "Shell
    Acquisition"). The purchase price of approximately $322.7 million is net of
    interest earned on the deposit and the settlement of pre-existing accounts
    receivable and inventory balances and purchase price adjustments as
    provided for in the amended purchase and sale agreement, and includes other
    transaction and closing costs. The acquisition closed on August 1, 2002
    which was also the effective date. The acquisition will be accounted for
    using the purchase method of accounting.

    The unaudited pro forma consolidated balance sheet as of June 30, 2002 and
the unaudited pro forma statements of operations for the six months ended June
30, 2002 and the year ended December 31, 2001 are based upon the following,
respectively:

    (1) The historical balance sheet of Plains All American Pipeline, L.P. at
        June 30, 2002.

    (2) The historical consolidated statement of operations of Plains All
        American Pipeline, L.P. for the six months ended June 30, 2002 and the
        historical combined statement of operations for the businesses acquired
        in the Shell Acquisition for the same period.

    (3) The historical consolidated statement of operations of Plains All
        American Pipeline, L.P. for the year ended December 31, 2001 and the
        historical combined statement of operations for the businesses acquired
        in the Shell Acquisition for the same period.

    The unaudited pro forma consolidated financial statements are not
necessarily indicative of the results of the actual or future operations or
financial condition that would have been achieved had the transactions occurred
at the dates assumed (as noted below). The unaudited pro forma consolidated
financial statements should be read in conjunction with the notes thereto and
the historical audited financial statements of Plains All American Pipeline,
L.P. for the year ended December 31, 2001 and the unaudited interim financial
statements for Plains All American Pipeline, L.P. for the six months ended June
30, 2002 as well as those for the businesses acquired in the Shell Acquisition,
for the same periods.

    The following unaudited pro forma consolidated statements of operations for
the six months ended June 30, 2002 and the year ended December 31, 2001 have
been prepared as if the transaction described above had taken place on January
1, 2001. The unaudited pro forma consolidated balance sheet at June 30, 2002
assumes the transaction was consummated on that date.

                                      1

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

                UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

                                 June 30, 2002

                                (in thousands)

                                                         Plains All    Pro Forma    Plains All
                                                          American    Acquisition    American
                                                         Historical   Adjustments   As Adjusted
                                                         ----------  -----------    -----------
                                                                           
CURRENT ASSETS
Cash and cash equivalents............................... $    5,792   $ 288,243 (a) $    5,792
                                                                       (288,243)(b)
Accounts receivable and other current assets............    514,034          --        514,034
Inventory...............................................     67,289      (9,100)(b)     58,189
                                                         ----------   ---------     ----------
Total current assets....................................    587,115      (9,100)       578,015
PROPERTY AND EQUIPMENT..................................    685,636     322,700 (b)  1,008,336
Less allowance for depreciation and amortization........    (60,320)         --        (60,320)
                                                         ----------   ---------     ----------
                                                            625,316     322,700        948,016
                                                         ----------   ---------     ----------
OTHER ASSETS
Pipeline linefill.......................................     58,242          --         58,242
Other...................................................     67,331     (15,750)(b)     51,581
                                                         ----------   ---------     ----------
                                                         $1,338,004   $ 297,850     $1,635,854
                                                         ==========   =========     ==========
CURRENT LIABILITIES
Accounts payable and other current liabilities.......... $  476,675   $   9,607 (b) $  486,282
Due to affiliates.......................................     19,170          --         19,170
Short-term debt.........................................     57,847          --         57,847
                                                         ----------   ---------     ----------
Total current liabilities...............................    553,692       9,607        563,299
LONG-TERM LIABILITIES
Bank debt...............................................    381,591     288,243 (a)    669,834
Other long-term liabilities.............................      4,785          --          4,785
                                                         ----------   ---------     ----------
Total liabilities.......................................    940,068     297,850      1,237,918
                                                         ----------   ---------     ----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL
Common unitholders (31,915,939 units outstanding).......    405,031          --        405,031
Class B common unitholders (1,307,109 units outstanding)     19,389          --         19,389
Subordinated unitholders (10,029,619 units outstanding).    (40,005)         --        (40,005)
General partner.........................................     13,521          --         13,521
                                                         ----------   ---------     ----------
Total partners' capital.................................    397,936          --        397,936
                                                         ----------   ---------     ----------
                                                         $1,338,004   $ 297,850     $1,635,854
                                                         ==========   =========     ==========

      See notes to unaudited pro forma consolidated financial statements

                                      2

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

           UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

                    For the Six Months Ended June 30, 2002

                     (in thousands, except per unit data)

                                         Plains All     Shell     Pro Forma    Plains All
                                          American   Acquisition Acquisition    American
                                         Historical  Historical  Adjustments   As Adjusted
                                         ----------  ----------- -----------   -----------
                                                                   
REVENUES................................ $3,530,670    $25,838     $(2,005)(d) $3,554,503
COST OF SALES AND OPERATIONS............                            (2,005)(d)
                                          3,450,575     12,284      (1,383)(f)  3,459,471
                                         ----------    -------     -------     ----------
Gross Margin............................     80,095     13,554       1,383         95,032
                                         ----------    -------     -------     ----------
EXPENSES
General and administrative..............     21,877      9,907      (7,061)(e)     24,723
Depreciation and amortization...........                            (1,311)(g)
                                             14,144      1,311       4,880 (h)     19,024
                                         ----------    -------     -------     ----------
Total Expenses..........................     36,021     11,218      (3,492)        43,747
                                         ----------    -------     -------     ----------
OPERATING INCOME........................     44,074      2,336       4,875         51,285
Interest expense........................    (12,807)        --      (5,600)(c)    (18,407)
Interest and other income...............        (35)        --          --            (35)
                                         ----------    -------     -------     ----------
INCOME (LOSS) FROM CONTINUING
  OPERATIONS............................ $   31,232    $ 2,336     $  (725)    $   32,843
                                         ==========    =======     =======     ==========
INCOME FROM CONTINUING OPERATIONS--
   LIMITED PARTNERS..................... $   29,356                            $   30,935
                                         ==========                            ==========
INCOME FROM CONTINUING OPERATIONS--
   GENERAL PARTNER...................... $    1,876                            $    1,908
                                         ==========                            ==========
BASIC AND DILUTED INCOME FROM CONTINUING
  OPERATIONS PER LIMITED PARTNER UNIT... $     0.68                            $     0.72
                                         ==========                            ==========
WEIGHTED AVERAGE UNITS OUTSTANDING......     43,253                                43,253
                                         ==========                            ==========

      See notes to unaudited pro forma consolidated financial statements

                                      3

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

           UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

                 For the Twelve Months Ended December 31, 2001

                     (in thousands, except per unit data)

                                    Plains All     Shell     Pro Forma    Plains All
                                     American   Acquisition Acquisition    American
                                    Historical  Historical  Adjustments   As Adjusted
                                    ----------  ----------- -----------   -----------
                                                              
REVENUES........................... $6,868,215    $59,690    $ (2,266)(d) $6,925,639
COST OF SALES AND OPERATIONS.......                            (2,266)(d)
                                     6,720,970     26,226      (2,765)(f)  6,742,165
INVENTORY VALUATION ADJUSTMENT.....      4,984         --          --          4,984
                                    ----------    -------    --------     ----------
Gross Margin.......................    142,261     33,464       2,765        178,490
EXPENSES
General and administrative.........     46,586     16,571      (9,916)(e)     53,241
Depreciation and amortization......                            (2,375)(g)
                                        24,307      2,375       9,759 (h)     34,066
                                    ----------    -------    --------     ----------
   Total Expenses..................     70,893     18,946      (2,532)        87,307
                                    ----------    -------    --------     ----------
OPERATING INCOME...................     71,368     14,518       5,297         91,183
Interest expense...................    (29,082)        --     (17,865)(c)    (46,947)
Gain on sale of assets.............        984         --          --            984
Interest and other income..........        401         --          --            401
                                    ----------    -------    --------     ----------
INCOME (LOSS) FROM CONTINUING
  OPERATIONS....................... $   43,671    $14,518    $(12,568)    $   45,621
                                    ==========    =======    ========     ==========
INCOME FROM CONTINUING OPERATIONS--
   LIMITED PARTNERS................ $   41,742                            $   43,653
                                    ==========                            ==========
INCOME FROM CONTINUING OPERATIONS--
   GENERAL PARTNER................. $    1,929                            $    1,968
                                    ==========                            ==========
BASIC AND DILUTED INCOME FROM
  CONTINUING OPERATIONS PER LIMITED
  PARTNER UNIT..................... $     1.12                            $     1.16
                                    ==========                            ==========
WEIGHTED AVERAGE UNITS OUTSTANDING.     37,528                                37,528
                                    ==========                            ==========

      See notes to unaudited pro forma consolidated financial statements

                                      4

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

        NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Note 1--Pro Forma Adjustments

    The pro forma adjustments are as follows:

    a.  Reflects the net proceeds of borrowings under the bank credit facility
        to fund the Shell Acquisition at closing.

    b.  Records the assets purchased in the Shell Acquisition based on the
        purchase method of accounting. The purchase price was $322.7 million
        and consisted of (i) approximately $304 million in cash of which $15.7
        million was paid as a deposit in May 2002, (ii) an estimated $9.1
        million related to the settlement of pre-existing inventory balances
        and (iii) the accrual of approximately $9.6 million of other
        transaction and closing costs (See Note 2).

    c.  Reflects the adjustment to interest expense for the increase in long
        term debt of $304 million from a draw down on the credit facility using
        historical interest rates of 5.88% and 3.68% for the periods ended
        December 31, 2001 and June 30, 2002, respectively. The impact to
        interest expense of a  1/8% change in interest rates would be
        approximately $0.4 million per year.

    d.  Reflects the elimination of crude oil transportation revenues included
        in Shell's historical financial statements and the offsetting expense
        included in PAA's historical financial statements related to an
        existing contract whereby PAA transported crude oil on the assets
        acquired from Shell. On a pro forma basis, these transactions
        constitute intercompany activities and thus are eliminated in
        consolidation.

    e.  Reflects the adjustment to general and administrative expenses relating
        to Shell's historical allocation of corporate overhead costs primarily
        related to payroll costs associated with corporate office management
        personnel including executives and other corporate office expenses.
        These costs for PAA's operation of the assets are already included in
        our historical results.

    f.  Reflects the reduction of operating expenses related to certain field
        personnel which were not hired as part of the acquisition as well as
        the decreases in salaries and benefits associated with the remaining
        employees.

    g.  To reverse historical depreciation as recorded by Shell.

    h.  Reflects depreciation on the acquired assets based on the straight-line
        method of depreciation over an average useful life of 30 years. The
        increase over historical depreciation is due to the difference in
        Shell's historical book value versus the purchase price at fair value.

Note 2--Purchase Price Allocation

    The Shell Acquisition presented in these pro forma statements has been
accounted for using the purchase method of accounting and the purchase price
has been allocated in accordance with Statement of Financial Accounting
Standards No. 141, "Business Combinations". The purchase consists of the
acquisition of certain businesses from Shell Pipeline Company, including its
interests in the Basin

                                      5

              PLAINS ALL AMERICAN PIPELINE, L.P. AND SUBSIDIARIES

                   NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
                       FINANCIAL STATEMENTS--(Continued)

Pipeline System, the Rancho Pipeline System and the Permian Basin Gathering
System. The purchase price of approximately $322.7 million is net of interest
earned on the deposit and the settlement of pre-existing accounts receivable
and inventory balances and purchase price adjustments as provided for in the
amended purchase and sale agreement, and includes other transaction and closing
costs. The acquisition closed on August 1, 2002 which was also the effective
date. The total purchase price and its allocation are preliminary as the
resolution of certain claims and the ultimate amount of transaction costs are
based on estimates at this time. We do not expect the resolution of these items
to have a material impact on the allocation presented below. The purchase price
allocation, based on discounted cash flows which approximate fair value, is as
follows (in thousands):

                                                
                     Crude oil pipeline assets.... $248,900
                     Crude oil pipeline facilities   72,450
                     Land.........................    1,000
                     Other property and equipment.      350
                                                   --------
                        Total..................... $322,700
                                                   ========

                                      6

                                                                   EXHIBIT 99.4

                          PURCHASE AND SALE AGREEMENT

    THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), is entered into
effective the 2nd day of May 2002, by and between Shell Pipeline Company LP, a
Delaware limited partnership (formerly known as Equilon Pipeline Company LLC)
and Equilon Enterprises LLC dba Shell Oil Products US, a Delaware limited
liability company (individually "Shell Pipeline" or "SOP US" and collectively
"Seller") and Plains All American Pipeline, L. P. ("Buyer"), a Delaware limited
partnership. Seller and Buyer are hereinafter sometimes referred to
individually as a "Party" or collectively as the "Parties." Other definitions
used in this Agreement are found in Annex A attached hereto and made a part
hereof.

    For and in consideration of the mutual covenants, obligations and benefits
made and contained herein, the Parties agree as follows:

                                   Article 1

                               Purchase and Sale

    A.  Subject to the terms and conditions set forth below, Seller agrees to
sell, grant, transfer, assign and convey, and Buyer agrees to purchase,
acquire, pay for and accept all of Seller's right, title and interest in and to
the following real and personal property interests, other than the Excluded
Assets (the "Property");

        (1)  The crude oil pipeline systems shown on Exhibits "A" and "A-1
    through "A-4", attached hereto and made a part hereof (the "Pipelines");

        (2)  All of the partnership interests in Rancho Pipeline Holdings LP
    and Basin Pipeline Holdings LP (the "Companies"), including the general
    partners of each;

        (3)  All real property interests described and shown on Exhibits "B-1"
    through "B-4" attached hereto and made a part hereof ("Real Property");

        (4)  Rights-of-Way and Permits appurtenant to or associated with the
    Pipelines as further described on Exhibits "C-1" through "C-4", attached
    hereto and made a part hereof;

        (5)  The Assigned Contracts as further described on Exhibits "D-1"
    through "D-4" attached hereto and made a part hereof;

        (6)  Any and all pipe, pumps, motors, valves, fittings, miscellaneous
    equipment and facilities, and buildings associated with the Pipelines as
    further described on Exhibit "E-1" through "E-4" attached hereto and made a
    part hereof ("Equipment"); and

        (7)  Books and Records.

    B.  The Property shall not include any real or personal property interests
described on the attached Exhibits "F-1" through "F-4" (the "Excluded Assets").
In particular, Seller is not selling to Buyer any of its allowance oil or other
oil held in inventory for Seller in any of the Pipelines or in the assets of
the Companies. For all of the Excluded Assets, Buyer grants Seller a sixty (60)
day right of access, commencing on the Effective Date, to remove such assets,
in a reasonable, safe and prudent manner, from the Property.

    C.  Buyer acknowledges that it shall have no rights with respect to the use
of the names "Equilon Pipeline Company LLC", "Shell Pipeline Company LP" or
"Equilon Enterprises LLC dba Shell Oil Products US" or any and all variations
and derivatives thereof, all trademarks, service marks and logos associated
therewith, nor any "Goodwill" associated with any of the foregoing. Within
sixty (60) days after the Effective Date, Buyer shall remove or cause to be
removed, all such names, marks or logos from wherever they may appear on the
Property, including the removal of all Equilon Pipeline, Shell Pipeline or
Equilon Enterprises line markers.

                                   Article 2

                                Purchase Price

    A.  Price.  The price to be paid by Buyer to Seller for the Property shall
be three hundred fifteen million dollars ($315,000,000.00) (the "Purchase
Price") payable at Closing (as defined below) less the Earnest Money held by
Seller, by wire transfer in immediately available funds to an account to be
designated by Seller.

    B.  Earnest Money.  As evidence of Buyer's ability to perform this
Agreement and good faith intent to comply with the terms hereof, Buyer has
deposited with Seller an amount equal to five percent (5%) of the Purchase
Price as Earnest Money (hereinafter "Earnest Money"). The Earnest Money shall
accrue interest at a per annum rate calculated on a daily basis using the three
month treasury bill rate published in The Wall Street Journal for any
applicable day (with the rate for any day for which a rate is not published
being the rate most recently published). All references to Earnest Money shall
include interest on the Earnest Money as calculated by using the preceding
sentence.

    If the transaction fails to close because any of the conditions to Closing
in Section 3A. is not satisfied, Seller will refund the Earnest Money to Buyer
and Buyer and Seller shall each be relieved of all further liability hereunder.
Provided, however, if Buyer violates the terms of this Agreement and such
violation is not cured by Buyer within 30 days following written notice of such
violation from Seller to Buyer, Seller shall be entitled to retain the Earnest
Money, as liquidated damages and not as a penalty.

    Provided further, however, if Seller violates the terms of this Agreement
and such violation is not cured by Seller within 30 days following written
notice of such violation from Buyer to Seller, Seller shall return the Earnest
Money to Buyer and shall also pay Buyer an additional fifteen million dollars
($15,000,000.00), as liquidated damages and not as a penalty and Buyer and
Seller shall each be relieved of all further liability hereunder. The Parties
agree that if another owner in either of the Basin or Rancho pipeline systems
attempts to delay Closing by claiming that it was owed a right of first
refusal, Buyer will grant Seller a reasonable time to cure the delay.

                                   Article 3

                                    Closing

    Closing shall take place on the first day of the month immediately
following the month in which the waiting period(s) of the HSR Act expire at
Seller's offices in Houston, Texas ("Closing"), or at such other time and place
as agreed to in writing by the Parties. Control of operations, risk of loss,
and transfer of title to the Property from Seller to Buyer shall be effective
as of 7:00 a.m. local time on the Closing Date.

                                      2

    A.  Conditions to Closing.  Except as expressly waived by the Parties, the
obligations of the Parties to close this transaction are subject to the
complete satisfaction, prior to Closing, of each of the following conditions,
which conditions the Parties intend to be conditions precedent to Seller's
obligation to convey the Property and to Buyer's obligation to pay the Purchase
Price:

        (1)  All representations and warranties of the Parties set forth in
    this Agreement shall be true in all material respects as of the Closing
    Date as if made on the Closing Date, and the Parties shall have performed
    all covenants and conditions required by this Agreement to be performed at
    or prior to Closing and shall have taken all other actions reasonably
    necessary to close this transaction.

        (2)  No Law shall exist or shall have been enacted restricting or
    substantially delaying this transaction.

        (3)  Neither Party shall have exercised any right it may have to
    terminate or refuse to close under this Agreement.

        (4)  If in the judgment of either Seller or Buyer, the pre-merger
    notification requirements of the HSR Act are applicable to this
    transaction, then both Seller and Buyer shall file with the Federal Trade
    Commission and the Department of Justice their respective Notification and
    Report Forms and any supplemental information, if any, and will comply with
    the requirements of the HSR Act. The respective obligations of the Parties
    to consummate this transaction are expressly made subject to satisfactory
    compliance with the HSR Act, including the expiration of any waiting
    period(s) required thereunder.

        (5)  If applicable, each Party shall have complied with the
    requirements of federal and state securities Laws.

        (6)  No Casualty Loss shall have occurred prior to Closing, unless
    Buyer notifies Seller that it is willing to close despite the Casualty
    Loss. The term "Casualty Loss" shall mean any single event of loss or
    damage to the Property or any portion thereof which causes a Material
    Adverse Environmental Condition or a Material Defect.

        (7)  Each Party shall have received a certificate, dated as of the
    Closing Date, signed by the other Party's Secretary or Assistant Secretary
    certifying the incumbency of the officers executing this Agreement on
    behalf of such Party and any documents to be executed and delivered by it
    at the Closing.

        (8)  Seller shall have executed and delivered to Buyer the Conveyance
    Documents.

        (9)  Seller shall have paid to Buyer the Seller's portion of the
    property Tax in accordance with Section 6.B.

    B.  If any condition or obligation of a Party has not been satisfied or
waived, and Closing has not occurred by the close of business on the Closing
Date, the Party to whom said obligation is owed may terminate this Agreement
immediately upon the giving of written notice thereof to the Party owing such
obligation. Buyer shall return all records, maps, files, papers, and other
property of Seller then in its possession, and except as provided in Section
2(B), neither Party shall hereafter have any liability under this Agreement.
This provision shall not, however, apply to limit the liability of a Party who
has willfully caused termination hereof by any act or failure to act in
violation of the terms and provisions of this Agreement.

                                      3

                                   Article 4

                   Allocation of Proceeds and Purchase Price

    A.  All proceeds attributable to the operation, ownership, use or
maintenance of or otherwise relating to the Property prior to the Effective
Date shall be the property of Seller and to the extent received by Buyer or its
Affiliates, Buyer shall promptly and fully disclose, account for and transmit
same to Seller. All proceeds attributable to the operation, ownership, use, or
maintenance of or otherwise relating to the Property on and after the Effective
Date shall be the property of Buyer and to the extent received by Seller or its
Affiliates, Seller shall promptly and fully disclose, account for and transmit
same to Buyer.

    B.  The Purchase Price for the Property shall be allocated by the Parties'
mutual agreement prior to the Closing Date in substantially the same form
attached hereto as Exhibit "G" which will represent a reasonable determination
in good faith of the fair market value of the Property. Buyer and Seller agree
that they shall use these allocations to prepare, on a consistent basis, and
file as required, Form 8594 (Asset Acquisition Statement) under Section 1060 of
the Code.

                                   Article 5

            Responsibility For Contractual Payments and Obligations

    A.  Seller shall be responsible for all rentals, contractual payments,
compensation owed to employees, operating costs, expenses, fees, vendor and
contractor invoices, billings, charges, assessments and other indebtedness and
obligations arising from the ownership, operation, use or maintenance of the
Property prior to the Effective Date. Buyer shall be responsible for all such
payments and obligations arising from the ownership, operation, use or
maintenance of the Property on and after the Effective Date. Seller shall be
responsible for all Taxes arising from the ownership, operation, use or
maintenance of the Property on or before the Closing Date, and Buyer shall be
responsible for all Taxes arising from the ownership, operation or maintenance
of the Property after the Closing Date. As of the Effective Date (or in the
case of Taxes, after the Closing Date) Buyer shall assume and perform all
obligations and implied covenants of Seller relating to the Property (whether
such obligations are to a grantor, a governmental body or any other Person) to
the extent the same are attributable to periods of time on and after the
Effective Date (or in the case of Taxes, after the Closing Date), including,
but not limited to, any obligations arising with respect to the abandonment, or
removal (as the case may be) of any existing facilities, Pipeline, appurtenant
or associated equipment or other personal property located on or included in
the Property; provided, however, such assumed obligations shall exclude, and
Seller agrees to retain and perform all obligations relating to the Property to
the extent the same arise out of any Contracts which are not described on
Exhibits "D-1" through "D-4" hereto, all obligations that relate to the
Excluded Assets, and all obligations of Seller under Article 12 hereof. For
clarification, the obligations of Seller under this Article 5 shall not be
subject to or governed by Article 12 or Article 13.

    B.  To the extent utilities have not been placed in Buyer's name as of the
Effective Date, charges and credits for water, electricity, sewage, gas, and
all other utilities shall be adjusted and apportioned between Seller and Buyer
through the Effective Date.

                                      4

                                   Article 6

                           Taxes and Related Matters

    A.  Cooperation.  Buyer and Seller agree to furnish, or cause to be
furnished, to each other, upon request, as promptly as practicable, such
information and assistance relating to the Property as is reasonably necessary
for the filing of all Tax returns, the preparation for any audit by any taxing
authority, and the prosecution or defense of any Proceeding relating to any Tax
return. Seller and Buyer shall cooperate with each other in the conduct of any
audit or other Proceeding related to Taxes involving the Property and each
shall execute and deliver such documents as are necessary to carry out the
intent of this article. Seller and Buyer agree to file such reports,
certificates or returns, and provide such evidence of the applicability of
exemptions, as are reasonably requested by the other Party or are required
under federal, state, local, foreign or other applicable law in order to reduce
or eliminate any Taxes attributable to the transaction contemplated by this
Agreement.

    B.  Property Taxes.  For purposes of this Agreement, general property Taxes
in respect to the ownership or use of the Property for the calendar year in
which the Closing Date occurs shall be prorated between Buyer and Seller as of
the Closing Date regardless of when such general property Taxes are actually
billed and payable. At Closing, Seller shall pay to Buyer Seller's share of
such general property Taxes attributable to the period on or prior to the
Closing Date, using estimates to the extent such general property Taxes have
not been billed or are not determinable as of the Closing Date (such estimates
are to be based upon (i) such Taxes for the prior year and (ii) to the extent
there were no such Taxes for the prior year for any portion of the Property, a
fair market valuation of the portion of the Property for which there were no
such Taxes for the prior year multiplied by the applicable property Tax rates
for the prior year, except in either case that appraised values for the current
year, regardless of whether final, and property Tax rates adopted for the
current year shall be utilized to the extent available as of the Closing Date).
Buyer shall actually pay to the taxing authority all general property Taxes for
the year of Closing. Notwithstanding anything in this Agreement to the
contrary, no further adjustment shall be made for such general property Taxes,
and Buyer hereby agrees to assume the payment of all such general property
Taxes effective upon Closing.

    C.  Documentary Transfer Taxes.  Buyer shall pay and bear all documentary
transfer Taxes that may be required in connection with the purchase and sale of
the Property. Seller shall pay or indemnify Buyer for any such Taxes incurred
in connection with the transfer of any Property by Seller to the Companies
(which indemnity shall survive Closing and not be subject to any deductible or
cap under this Agreement).

    D.  Other Transfer Taxes.  Buyer shall pay and be responsible for any other
applicable transfer Taxes incurred in connection with the purchase and sale of
the Property, including, without limitation, any federal, state or local sales,
use, or excise Taxes, whether levied on Seller or Buyer. Buyer shall be
responsible for, and will file all necessary Tax returns and other
documentation with respect to all such Taxes and remit, upon the request of
Seller, copies of the portions of such returns relevant to this Agreement and
any necessary documentation to Seller. Seller shall pay or indemnify Buyer for
any such Taxes incurred in connection with the transfer of any Property by
Seller to the Companies (which indemnity shall survive Closing and not be
subject to any deductible or cap under this Agreement).

    E.  Confidential Tax Information.  After giving full effect to Article 6A,
notwithstanding anything to the contrary in this Agreement, neither Party shall
be required at any time to disclose to the other Party, or to any other Person,
absent legal constraint, any Tax return or other confidential Tax information.

                                      5

    F.  Deferred Like-Kind Exchange Cooperation.  If so requested by Seller,
Buyer shall, at no cost or obligation to Buyer, reasonably cooperate in
structuring and completing all or a portion of this transaction for Seller so
as to effect a disposition of "relinquished property" in connection with a
multiple party deferred like-kind exchange pursuant to Section 1031 of the
Code. In particular, Buyer hereby consents to the assignment of an interest in
the Property to a "qualified intermediary" prior to the Closing hereunder and
the assignment by Seller to such "qualified intermediary" of Seller's right to
receive the Purchase Price hereunder. Buyer, however, shall not be required to
act as a "qualified intermediary." The terms "replacement property," "qualified
intermediary," and "relinquished property" as used herein shall have the
meanings ascribed to them in Treasury Regulations Section 1.1031(k)-1. Seller
shall indemnify Buyer against any Claim arising out of any transaction or
action incidental or related to the matters contemplated by this Section 6.F.,
which indemnity shall survive Closing. No transaction or action contemplated by
this Section 6.F shall result in delaying the Closing to a date later than the
date on which it otherwise would have occurred. Seller's indemnity under this
Section 6.F shall not be subject to any deductible or cap notwithstanding any
other provision of this Agreement.

    G.  Allocation of Taxable Income to Periods Before and After Closing
Date.  Seller (or if applicable a Person or Persons owning a direct or indirect
interest in Seller) shall include in its federal Tax return, and its state Tax
returns for those states that follow the federal rules, any item of income,
gain, loss, deduction and credit with respect to activities of the Companies or
Property on or prior to the Closing Date. Seller (or if applicable a Person or
Persons owning a direct or indirect interest in Seller) shall pay or cause to
be paid all Taxes shown as due (or required to be shown as due) on such Tax
returns. Buyer shall include the income, gain, loss, deduction and credit with
respect to activities of the Companies after the Closing Date, in either (i)
its own federal income Tax return, and in its own state income Tax returns for
those states that follow the federal rules or (ii) in federal and state income
Tax returns filed by an affiliate or affiliates of Buyer. Seller shall make no
election or otherwise take any action to cause the Companies to be treated as
associations under Treasury Regulation sections 7701-2 and 7701-3, and shall
pay, and indemnify Buyer for (which indemnity shall survive Closing and not be
subject to any deductible or cap under this Agreement), any Taxes required to
be paid by the Companies attributable to the treatment of either of the
Companies as an association. Both the Buyer and Seller recognize that the Texas
franchise privilege period pertaining to the Companies does not end at the
Closing Date. Therefore, Seller will provide Buyer with all required Tax
attributes pertaining to the period prior on or prior to the Closing Date for
inclusion into the Tax return to be filed for the Companies by Buyer that
includes such Tax attributes in the calculation of the franchise Tax. Seller
will be responsible, and will reimburse Buyer, for all increased Taxes paid by
Buyer or the Companies, relating to Tax attributes generated on or prior to the
Closing Date in any such Texas franchise Tax return.

    H.  Sale of the Companies Treated as Asset Sale for Income Tax
Purposes.  The sale of the partnership interests in the Companies shall be
treated for federal income tax purposes, and for state income tax purposes in
those states that follow the federal rules, as a sale of the underlying assets
of the Companies in exchange for the Purchase Price at the Closing Date.

    I.  Occasional Sale.  This purchase and sale constitutes an isolated or
occasional sale and is not subject to sales or use tax with any of the taxing
authorities having jurisdiction over this transaction, and no sales tax need be
collected by Seller from Buyer at Closing. Seller agrees to cooperate with
Buyer in demonstrating the requirements for an isolated or occasional sale or
that other sales tax exemptions have been met.

                                      6

    J.  Certification of Non-Foreign Status.  Seller shall provide to Buyer
prior to Closing a certification of non-foreign status as described in Treasury
Regulation section 1.1445-2(b)(2).

                                   Article 7

                           Seller's Representations

    Seller represents and warrants the following:

    A.  EXCEPT AS SET FORTH HEREIN: (1) SELLER IS SELLING THE PROPERTY ON AN
"AS IS", "WHERE IS" BASIS AND DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES
CONCERNING THE PROPERTY, (2) SELLER MAKES NO REPRESENTATION OR WARRANTY OF
TITLE OR FITNESS WITH REGARD TO THE PROPERTY AND SELLER EXPRESSLY DISCLAIMS ANY
WARRANTIES (EXPRESS, IMPLIED OR STATUTORY), WHETHER OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR OTHERWISE, COVERING THE PROPERTY, AND (3) SELLER
DOES NOT WARRANT TITLE, DESCRIPTION, VALUE, QUALITY, CONDITION,
MERCHANTABILITY, OR FITNESS FOR PURPOSE OF ANY OF THE FACILITIES, PIPELINES,
APPURTENANT OR ASSOCIATED EQUIPMENT OR OTHER REAL OR PERSONAL PROPERTY LOCATED
ON OR INCLUDED IN THE PROPERTY.

    B.  Seller makes no representation concerning the present or future value
of the possible income, costs or profits, if any, to be derived from the
Property.

    C.  Seller has not incurred any obligation or liability, contingent or
otherwise, nor made any agreement with respect to any broker or finder's fees
arising out of or in any way related to the transaction contemplated by this
Agreement.

    D.  Shell Pipeline is a limited partnership and SOP US is a limited
liability company, each duly organized, validly existing and in good standing
under the Laws of the State of Delaware and duly qualified to carry on business
in the states in which its business requires it to be qualified. The Companies
will be limited partnerships duly organized and validly existing under the Laws
of the State of Delaware. The Companies have not yet been organized, and will
not, prior to the Closing, engage in any business activities or have any
liabilities or assets other than the ownership interests in the Basin or Rancho
pipeline systems that will be transferred to them in connection with this
Agreement.

    E.  Seller has the power and authority necessary to enter into and perform
this Agreement and the transaction contemplated hereby, and the execution,
delivery and performance of this Agreement by Seller, and the transaction
contemplated hereby, will not, with the passage of time or the giving of notice
or both: (1) violate any provision of the formation documents of Seller, (2)
violate any material agreement or instrument to which Seller is a party or by
which Seller is bound, (3) violate any judgment, order, ruling or decree
applicable to Seller as a party in interest, (4) violate any Law applicable to
Seller or to this Agreement or (5) result in the creation or imposition of any
Lien on any of the Property.

    F.  The execution, delivery, and performance by Seller of this Agreement
and the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of Seller. This Agreement has
been duly executed and delivered on behalf of Seller, and, at the Closing,

                                      7

all documents and instruments required hereunder to be executed and delivered
by Seller shall have been duly executed and delivered by Seller. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Seller enforceable in accordance with their terms,
subject, however, to the effect of bankruptcy, insolvency, reorganization,
moratorium and similar Laws from time to time in effect relating to the rights
and remedies of creditors, as well as to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law).

    G.  Seller is not (1) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended or (2) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended or (3) a "foreign person" within the
meaning of Section 1445 of the Code.

    H.  Except as set forth in the Disclosure Schedule, to Seller's knowledge,
Seller is not in violation of or in default under any Law or governmental
certification requirement.

    I.  Except as set forth in the Disclosure Schedule, to Seller's knowledge,
Seller and the Companies have filed in a timely manner all required Tax returns
related to the Property and the Companies have paid (except amounts being
diligently contested in good faith by appropriate Proceedings and disclosed in
Section 7I of the Disclosure Schedule) all required Tax or similar assessments
arising from or related to the Property and the Companies, including any
interest, penalties or additions attributable thereto. Except as set forth in
the Disclosure Schedule, no Proceeding or other actions which are pending,
threatened or open seek the assessment or collection of additional Taxes of any
kind from Seller or the Companies specifically relating to any portion of the
Property or the Companies, and no other examination by the Internal Revenue
Service or any other taxing authority affecting any portion of the Property or
the Companies is now pending. Taxes which Seller or the Companies are required
by Law to withhold or collect in respect to the Property or the Companies have
been withheld or collected and have been paid over to the proper Governmental
Authorities or are properly held by Seller or the Companies for such payment
when due and payable. The Companies each are and have at all times been treated
(or, if not yet formed, will be treated) as disregarded entities under Treasury
Regulation sections 7701-2 and 7701-3 and have not elected (or, if not yet
formed, will not elect) to be treated as associations taxable as corporations
under Treasury Regulation sections 7701-2 and 7701-3. None of the Property
(including assets held or to be held by the Companies at Closing) constitutes
an interest in a partnership for federal income tax purposes.

    J.  Except as disclosed in the Disclosure Schedule, to Seller's knowledge
(1) Seller has all Permits necessary for the operation of the Property as
currently conducted, (2) each such Permit is in full force and effect, (3)
Seller is in compliance with all its obligations with respect to those
necessary Permits, and (4) no event has occurred which allows, or upon the
giving of notice or the passage of time or both would allow, the revocation or
termination of any Permit.

    K.  Except for the Excluded Assets and any title gaps for which Buyer has
assumed the risk under Section 9D, and except as disclosed in the Disclosure
Schedule, to Seller's knowledge, the Pipelines, Real Property, Rights of Way,
and Equipment constitute all of the properties and assets necessary for the
operation of the Pipelines as the Pipelines are currently used and operated.
Except for any title gaps for which Buyer has assumed the risk under Section
9D, and except as disclosed in the

                                      8

Disclosure Schedule, to Seller's knowledge, the Pipelines, Real Property,
Rights of Way, and Equipment are free and clear of all Liens (except for
Permitted Encumbrances) created by, through or under Seller, but not otherwise.

    L.  Except as disclosed in the Disclosure Schedule, to Seller's knowledge,
Seller has not received (1) any written notice from any Governmental Authority
of any actual or potential non-compliance with the terms and conditions of any
Permits with respect to any portion of the Property; or (2) any written notice
of any civil, criminal or administrative Proceeding involving any portion of
the Property relating in any way to applicable Environmental Laws.

    M.  Except as set forth in the Disclosure Schedule, to Seller's knowledge,
(1) there is no pending or threatened Proceeding involving Seller or any of the
Property, at law or in equity, by or before any Governmental Authority or any
arbitrator or mediator which on the date hereof is still pending or threatened,
and which, if adversely determined, would impair or prohibit the consummation
of the transaction contemplated hereby and (2) there are no material orders,
writs, judgments, stipulations, injunctions, decrees, determinations, awards or
other decisions of any Governmental Authority, or any arbitrator or mediator,
outstanding against Seller pertaining to any portion of the Property.

    N.  To Seller's knowledge, the disclosures by Seller in connection with the
environmental insurance provided for under Article 12 are true and complete.

    O.  Shell Pipeline owns, or will own at Closing, title to 100% of the
partnership interests in each of the Companies and such partnership interests
will be assigned and transferred to Buyer at Closing free and clear of any
encumbrance, security agreement, voting agreement, restriction, preferential
right, lien or charge of any kind or character.

                                   Article 8

                              Covenants of Seller

    Seller covenants with Buyer that in addition to the manner in which
Articles 5, 6, 7 and 12 of this Agreement would otherwise apply, the provisions
of Articles 5, 6, 7 and 12 shall be applied to the assets and liabilities of
the Companies without regard to their separate existence and shall be
interpreted and applied as if such separate existence did not exist.

                                   Article 9

                            Buyer's Representations

    Buyer represents the following:

    A.  EXCEPT AS SET FORTH HEREIN, BUYER HAS CONDUCTED OR WILL CONDUCT ITS OWN
EVALUATION OF THE PHYSICAL CONDITION OF THE PROPERTY AND IS ACQUIRING THE
PROPERTY ON AN "AS IS", "WHERE IS" BASIS, PURSUANT TO BUYER'S INDEPENDENT
INSPECTIONS, ESTIMATES, COMPUTATIONS, REPORTS, STUDIES, AND EVALUATIONS OF THE
PREMISES. FURTHER, BUYER ACKNOWLEDGES THAT THE PROPERTY HAS BEEN USED FOR THE
TRANSPORTATION OF CRUDE OIL OR PETROLEUM/REFINED PRODUCTS, OR BOTH AND MAY HAVE
BEEN THE SUBJECT OF ONE OR MORE RELEASES OF CRUDE OIL OR PETROLEUM/REFINED
PRODUCTS, OR BOTH AS A RESULT OF ITS USE.

                                      9

    B.  Buyer is acquiring the Property for its own benefit and account and not
with the intent of distributing fractional undivided interests thereof as would
be subject to regulation by federal or state securities Laws.

    C.  By reason of Buyer's knowledge and experience in the evaluation,
acquisition and operation of similar properties, Buyer has evaluated the merits
and risks of purchasing the Property and has formed an opinion based solely
upon Buyer's knowledge and experience and not upon any representations or
warranties by Seller other than as specifically set forth herein.

    D.  Buyer assumes the risk of any transfer restrictions, renegotiation
requirements or expiration of any easements, licenses, Rights-of-Way, Permits,
franchises or other agreements applicable to the Property. Seller agrees to
cooperate, including the execution of customary documents, substantially in the
form attached hereto as Exhibit "M", with Buyer's efforts to obtain the
necessary consent, renewal or reissuance of same.

    E.  Buyer shall comply with all applicable Laws and shall promptly obtain,
or have transferred to its name, and maintain all permits or consents required
by public or private parties in connection with the Property purchased.

    F.  Buyer is a limited partnership duly organized, validly existing and in
good standing under the Laws of the State of Delaware and is duly qualified to
carry on business in the states in which the ownership of the Property requires
it to be qualified.

    G.  Buyer has not incurred any obligation or liability, contingent or
otherwise, nor has it made any agreement with respect to any broker or finder's
fees arising out of or in any way related to the transaction contemplated by
this Agreement for which Seller would have any liability.

    H.  Buyer has the power and authority necessary to enter into and perform
this Agreement and the transaction contemplated hereby, and the execution,
delivery and performance of this Agreement by Buyer, and the transaction
contemplated hereby, do not violate (1) any provision of the formation
documents of Buyer, (2) any material agreement or instrument to which Buyer is
a party or by which Buyer is bound, (3) any judgment, order, ruling or decree
applicable to Buyer as a party in interest or (4) any Law applicable to Buyer
or to this Agreement.

    I.  The execution, delivery, and performance by Buyer of this Agreement and
the consummation of the transaction contemplated hereby have been duly
authorized by all requisite action on the part of Buyer. This Agreement has
been duly executed and delivered on behalf of Buyer, and, at the Closing, all
documents and instruments required hereunder to be executed and delivered by
Buyer shall have been duly executed and delivered by Buyer. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Buyer enforceable in accordance with their terms,
subject, however, to the effect of bankruptcy, insolvency, reorganization,
moratorium and similar Laws from time to time in effect relating to the rights
and remedies of creditors, as well as to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law).

    J.  Buyer is not (1) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended or (2) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding

                                      10

Company Act of 1935, as amended or (3) a "foreign person" within the meaning of
Section 1445 of the Code.

    K.  Buyer's management responsible for the consummation of this transaction
has no knowledge that there exists any wrong or inaccurate information,
omissions, misrepresentations or mistakes on the Disclosure Schedule.

                                  Article 10

                            Pre-Acquisition Review

    A.  During the period commencing on the date of this Agreement and ending
thirty (30) days prior to Closing (the "Review Period"), Buyer and its
Affiliates and the employees, agents and consultants of either shall have the
right to do the following, at Buyer's expense and with the cooperation and
assistance of Seller, subject to Buyer's executed confidentiality agreement
("Confidentiality Agreement"), and also subject to Buyer supplying to Seller,
at least thirty (30) days prior to Closing, copies of any reports and/or
assessments prepared by Buyer or its Affiliates or the consultants of either,
concerning the condition of the Property:

        1.  Enter all or part of the Property with Seller's representative,
    including all or any easements, to view the Pipelines, facilities,
    Equipment, and other operations conducted thereon prior to Closing, and to
    conduct a surface only inspection and assessment, inventory, study and
    examination of the same, independently of any documents, data or
    information furnished by Seller hereunder; and

        2.  Inspect and review the Books and Records, including all
    non-privileged files, records, documents and data related to the above
    matters, including, but not limited to, pipeline maintenance and
    construction records. Buyer acknowledges that it shall not have access to
    Seller's Pipeline Manuals used in the operation of the Pipelines, which are
    considered by Seller to be proprietary property.

    Buyer shall not have the right to perform any phase II environmental
assessments.

    B.  Except as required by Law, all information acquired by Buyer in any
inspection, inventory, study, or examination of the Property, and the results
of any analysis thereof, shall be kept confidential by Buyer from anyone other
than Seller or Buyer's representatives in accordance with Buyer's executed
Confidentiality Agreement.

    C.  Buyer shall indemnify, defend and hold harmless Seller and its
Affiliates and their respective owners, officers, directors, employees,
attorneys, and agents from any and all losses, liabilities, attorneys' fees,
court costs, liens, or encumbrances for labor or materials, claims and causes
of action arising out of any injury to or death of any Persons or damage to
property occurring to or on the Property as a result of the exercise of Buyer's
rights under this article, except to the extent the indemnified event or
occurrence arises from or is caused by the sole negligence or fault of Seller.
Seller shall have the right at all times to participate in the preparation for
and conduct of any hearing or trial related to this indemnification provision,
as well as the right to appear on its own behalf or to retain separate counsel
to represent itself at any such hearing or trial.

                                      11

    D.  Except as hereinafter provided, Buyer shall have the option of
terminating this Agreement by providing written notice to Seller on or before
the last day of the Review Period, in the event Buyer determines during the
Review Period that the Property is subject to any: (1) Material Adverse
Environmental Condition, or (2) Material Defect.  To be effective, any such
notice shall specifically identify and describe the basis for such termination,
and shall include substantiating evidence thereof. Minor deviations in the
location of a pipeline relative to a defined right-of-way in an easement or
encroachments on the right of way shall not be deemed to constitute a Material
Defect for purposes of this Agreement.

    E.  Notwithstanding the delivery of a notice of termination by Buyer to
Seller, this Agreement shall not be terminated if, within fifteen (15) days
after Seller's receipt of such notice: (1) Seller remedies or agrees to remedy,
to a degree which is mutually agreed during the referenced fifteen (15) day
period, such Material Adverse Environmental Condition or Material Defect; or
(2) Seller and Buyer mutually agree on an adjustment to the Purchase Price.

    F.  Notwithstanding the above, if Buyer can provide substantiating evidence
that the Property is subject to Material Adverse Environmental Conditions or
Material Defects that, when totaled together, would expose Buyer to costs to
remedy or cure, or the potential for exposure for claims, damages, penalties
assessments or costs in excess of ten percent (10%) of the Purchase Price,
Buyer, in its sole discretion, may terminate this Agreement.

    G.  If Seller agrees to remedy any specific Material Adverse Environmental
Condition or Material Defect in the Property, then all negotiations and
contacts with state, federal and local agencies for approval and review of such
remedial action shall be made by Seller, and Buyer shall make no independent
contacts with any of the agencies relative to such remedial action. Buyer shall
receive copies of all correspondence between Seller and any agencies regarding
such remedial action.

                                  Article 11

                                     Title

    A.  At Closing, Seller shall grant, transfer, assign, convey, and deliver
to Buyer or the Companies, and Buyer shall accept from Seller, by means of a
Special Warranty Deed, and other Conveyance Documents, good and marketable
title to the Property, free and clear at Closing of any lawful claims of any
third party claiming by, through or under Seller, but not otherwise.

    B.  This Agreement is expressly conditioned upon Buyer's approval of
Seller's title to, ownership of, interest in, and right to possess the
Property. During the period commencing on the date of this Agreement and ending
twenty (20) days before Closing ("Title Examination Period"), Buyer and its
Affiliates and their employees, agents and contractors shall have full access
to and the right (subject to the executed Confidentiality Agreement) to examine
all of Seller's records relating to the Property, including but not limited to,
those listed on Exhibits "C-1" through "C-4" attached hereto, for all purposes
related to this transaction.

    C.  On or before the last day of the Title Examination Period, Buyer shall
give Seller written notice of the land and property interests included in the
Property which have a Significant Title Defect. Minor deviations in the
location of a Pipeline, relative to a defined Right-of-Way in an easement,
shall not be deemed to constitute a Significant Title Defect for purposes of
this Agreement. If any

                                      12

Significant Title Defect cannot be or is not cured by Seller during the period
commencing upon the date of this Agreement and ending on or before the
Effective Date, Buyer may, at its election: (1) terminate this Agreement
without further obligation or liability by giving written notice to Seller any
time prior to Closing; (2) offer to acquire the Property, including the portion
affected by the Significant Title Defect, subject to the terms of this
Agreement, but at a reduced Purchase Price, which offer Seller may accept or
reject in its sole discretion; or (3) acquire the Property, including the
portion affected by the Significant Title Defect, without adjustment to the
Purchase Price.

                                  Article 12

          Seller's Responsibility for Claims Relating to the Property

    A.  Seller's Environmental Responsibilities shall be as follows:

        (1) (a)  Ongoing Remediation Sites.  Seller agrees to retain full
    responsibility for all costs, including capital, operating and maintenance
    costs, incurred in connection with (i) any investigation or monitoring of
    Environmental Conditions or (ii) any clean-up, remedial, removal or
    restoration work of those Environmental Conditions, either of which is
    ongoing on the Closing Date and that is required by any federal, state or
    local governmental agency or political subdivision with applicable
    jurisdiction because of the presence, suspected presence, release or
    suspected release of a Hazardous Substance in the air, soil, surface water,
    or groundwater on or emanating from the Property (hereinafter the "Ongoing
    Remedial Work"). The Ongoing Remedial Work is listed in Section 12A. of the
    Disclosure Statement. The performance of Ongoing Remedial Work will be by
    the Seller, in the name of the Seller. The Seller will obtain all necessary
    licenses, manifests, permits and approvals to perform such work. All
    Ongoing Remedial Work and the disposal of all waste generated by the
    Ongoing Remedial Work will be performed in accordance with all applicable
    Laws. Buyer grants to Seller, at no cost to Seller, ingress, egress, access
    to and use of lands (including land farming activities) and utilities,
    including but not limited to, electricity and water, as needed by Seller to
    complete any of the remedial activities described in Section 12A. (1)(a).
    Seller's responsibility for sites listed in Section 12A of the Disclosure
    Schedule shall terminate upon Seller's receipt from the applicable
    regulatory agency of one of the following: (i) concurrence that remediation
    efforts are complete and the site may be closed; (ii) No Further Action
    Required letter; or (iii) concurrence with the results of Seller's Risk
    Based Corrective Action Plan. For releases that were less than the
    regulatory reporting threshold at the time of the release, Seller's
    responsibility for these sites would terminate when laboratory results
    indicate contamination concentrations are below agency clean up
    requirements. Seller will conduct all communications concerning Seller's
    remediation activities with all regulatory agencies having jurisdiction.
    Seller will provide Buyer copies of all correspondence with the applicable
    regulatory agency concerning Seller's active remediation sites, but Buyer
    is prohibited from communicating with the regulatory agency concerning
    Seller's remediation activities.

        (b)  Subsequent Spill on Ongoing Remediation Site.  Should Buyer have a
    reportable release that adversely impacts or affects Seller's Ongoing
    Remedial Work, then Seller will transfer to Buyer the net present value of
    the unexpended dollars remaining in the budgeted amount as listed in
    Section 12A of the Disclosure Schedule for the specific Ongoing Remedial
    Work at the site where Buyer's release occurred. Buyer shall thereafter
    assume full responsibility for the Ongoing Remedial Work at the specific
    site along with the remediation of Buyer's own

                                      13

    release. Buyer shall  immediately indemnify Seller for anything relating to
    the particular Ongoing Remedial Work under Sections 13A.(2) or 13C.

        (2)  Environmental Insurance.  Seller will provide Buyer (at Seller's
    expense) with an environmental insurance policy which will provide the
    following coverages: (i) On-Site Clean Up of Unknown Pre-Existing
    Conditions (Coverage A), (ii) Third Party claims for On-Site Bodily Injury
    and Property Damage arising from Unknown Pre-Existing Conditions (Coverage
    C), (iii) Off-Site Clean Up of Unknown Pre- Existing Conditions (Coverage
    D) and (iv) Third Party claims for Off-Site Bodily Injury and Property
    Damage arising from Unknown Pre-Existing Conditions (Coverage F). The Buyer
    (and its general partner and Affiliates) as well as the Seller will be
    named as named insureds under such policy. The limit of liability will be
    $70,000,000 each incident/coverage section aggregate, with a deductible of
    $100,000 each incident aggregated at $1,000,000 and having a $10,000
    maintenance deductible each incident thereafter. In addition, the policy
    will include environmental cost cap insurance to include coverage for
    Clean-Up costs from identified pollutants within the Remediation Plan and
    pollutants different than those in the Remediation Plan with a limit of
    $5,000,000 each incident and in the aggregate applying to the Ongoing
    Remedial Work for the benefit of Seller. The policies will have a ten (10)
    year coverage term, with policy inception being the transaction closure
    date. Specific coverage details may be reviewed within the insurance policy
    provided at or within a reasonable period prior to Closing. A specimen of
    such policy is attached hereto as Exhibit L.

        (3)  Post Closing Assessment.  Buyer is prohibited (for purposes of
    this Agreement) from conducting post closing environmental assessments,
    except in those cases where a reasonably prudent pipeline operator, not
    afforded the indemnities and insurance provided in this Agreement, would
    conduct such assessments in the ordinary course of business or where
    required by a regulatory agency having jurisdiction as a result of a post
    Closing release on the Property. Should Buyer conduct a post Closing
    environmental assessment (i) which is not in accordance with the provisions
    of the environmental insurance policy referred to in Section 12A(2) of this
    Agreement, (ii) in a case where a reasonably prudent pipeline operator, not
    afforded the indemnities and insurance provided in this Agreement, would
    not conduct such an assessment in the ordinary course of business or (iii)
    where not required by a regulatory agency having jurisdiction as a result
    of a post Closing release on the Property, the Buyer shall indemnify,
    defend, and hold harmless the Buyer Indemnitees from any and all Claims
    arising out of such post Closing environmental assessment.

    B. SELLER'S GENERAL INDEMNITY OF BUYER.  TO THE FULLEST EXTENT PERMITTED BY
LAW, BUT NO FURTHER, SELLER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS BUYER AND
ITS AFFILIATES, AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, OWNERS, EMPLOYEES,
TENANTS, CONTRACTORS, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF ANY OF THEM
("SELLER INDEMNITEES"), FROM ANY AND ALL LOSSES, LIABILITIES, LIENS,
ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES,
FINES, PENALTIES, OR EXPENSES, INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF
LITIGATION WHICH RESULT FROM INJURIES TO OR DEATH OF ANY PERSONS, OR DAMAGES TO
PROPERTY OF ANY KIND OR CHARACTER WHICH OCCUR PRIOR TO THE EFFECTIVE DATE AND
WHICH ARISE OUT OF, IN CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP,
POSSESSION, OPERATION, USE OR MAINTENANCE OF THE PROPERTY BY SELLER BEFORE THE
EFFECTIVE DATE; OR (2) THE MATERIAL BREACH BY SELLER OF ANY OF ITS OBLIGATIONS
OR REPRESENTATIONS HEREUNDER. SUCH

                                      14

INDEMNIFICATION SHALL APPLY EVEN THOUGH THE INDEMNIFIED EVENT OR OCCURRENCE
ARISES FROM OR IS CAUSED BY THE CONCURRENT OR CONTRIBUTORY NEGLIGENCE, OR BOTH
(WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR FAULT OF BUYER, BUT
SUCH INDEMNIFICATION SHALL NOT APPLY IF CAUSED BY THE GROSS NEGLIGENCE OF
BUYER. THIS PARAGRAPH SHALL NOT APPLY TO ANY ENVIRONMENTAL LIABILITIES.

    C.  LIMITATION ON INDEMNITIES.  (1) EXCLUDING THE INDEMNITIES REFERENCED IN
CLAUSE (2) BELOW, THE INDEMNITIES CONTAINED IN SECTION 12B. SHALL APPLY TO
MATTERS ACCRUING OR ARISING PRIOR TO THE EFFECTIVE DATE FOR WHICH SELLER HAS
RECEIVED NOTICE FROM BUYER WITHIN THREE (3) YEARS AFTER THE EFFECTIVE DATE AND
ARE SUBJECT TO A FIVE HUNDRED THOUSAND DOLLAR ($500,000.00) DEDUCTIBLE PER
CLAIM TO BE PAID BY BUYER AND A TOTAL AGGREGATE CAP OF ALL AMOUNTS TO BE PAID
BY SELLER OF TWENTY-FIVE MILLION DOLLARS ($25,000.000.00). EXCEPT WITH REGARD
TO THE INDEMNITIES REFERENCED IN CLAUSE (2) BELOW AND MATTERS COVERED BY
ARTICLE 6, SELLER SHALL NOT BE LIABLE TO ANY PERSON OR COMBINATION OF PERSONS
UNDER SECTION 12B. FOR MORE THAN TWENTY-FIVE MILLION DOLLARS ($25,000,000.00)
NOR SHALL SELLER HAVE ANY LIABILITY UNDER SECTION 12B. FOR ANY CLAIM FOR WHICH
SELLER HAS NOT RECEIVED NOTICE FROM BUYER WITHIN THE THREE (3) YEAR PERIOD
FOLLOWING THE EFFECTIVE DATE.

    (2)  THE INDEMNITIES CONTAINED IN SECTION 12B. FOR LOSSES, LIABILITIES,
LIENS, ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS,
CHARGES, FINES, PENALTIES OR EXPENSES WHICH RESULT FROM INJURIES TO OR DEATH OF
ANY PERSONS SHALL APPLY TO MATTERS ACCRUING OR ARISING PRIOR TO THE EFFECTIVE
DATE FOR WHICH SELLER HAS RECEIVED NOTICE FROM BUYER AT ANY TIME FOLLOWING THE
EFFECTIVE DATE AND ARE SUBJECT TO A CUMULATIVE DEDUCTIBLE OF FIVE MILLION
DOLLARS ($5,000,000) TO BE PAID BY BUYER.

    (3)  FOR PURPOSES OF THIS AGREEMENT, SECTIONS 12B. AND 12C. SHALL NOT APPLY
TO ANY CLAIM FOR PERSONAL INJURY OR DEATH THAT IS COVERED BY THE INSURANCE
PROVIDED PURSUANT TO SECTION 12A.(2).

    D.  Buyer's Participation in Legal Process.  Buyer shall have the right at
all times to participate in the preparation for and conducting of any hearing
or trial related to the provisions of this Article 12B for which it would
receive indemnification, as well as the right to appear on its own behalf at
any such hearing or trial. Any such participation or appearance by Buyer shall
be at its sole cost and expense.

                                  Article 13

          Buyer's Responsibility for Claims Relating to the Property

    A.  Buyer's Environmental Responsibility shall be as follows:

        (1)  Future Remediation Sites.  Regardless of when the release causing
    the Environmental Condition occurred, Buyer agrees to accept full
    responsibility for (i) any investigation or monitoring of Environmental
    Conditions or (ii) any clean-up, remedial, removal or restoration

                                      15

    work of those Environmental Conditions, if any, either of which may be
    necessary on or after the Effective Date and required by any federal, state
    or local governmental agency or political subdivision with applicable
    jurisdiction because of the presence, suspected presence, release or
    suspected release of Hazardous Substances in the air, soil, surface water,
    or groundwater on or emanating from the Property (hereinafter the "Future
    Remedial Work"). With regard to any Environmental Condition attributable to
    a post-closing release, Buyer shall pay all costs, including capital,
    operating and maintenance costs. With regard to any Environmental Condition
    attributable to a pre-closing release, the environmental insurance
    described in 12A.(2) shall apply. The performance of any Future Remedial
    Work will be by the Buyer, in the name of Buyer. The Buyer will obtain all
    necessary licenses, manifests, permits and approvals to perform such work.
    All Future Remedial Work and the disposal of all waste generated by the
    Future Remedial Work will be in accordance with all applicable Laws. Except
    as otherwise provided in this Agreement, Buyer does not assume any
    responsibility for Ongoing Remedial Work as that work is set out in Section
    12 A(1) above.

        (2)  ENVIRONMENTAL INDEMNITY.  BUYER HEREBY AGREES TO INDEMNIFY, DEFEND
    AND HOLD SELLER AND ITS AFFILIATES AND THE DIRECTORS, OFFICERS,
    SHAREHOLDERS, OWNERS, EMPLOYEES, TENANTS, CONTRACTORS, ATTORNEYS, AGENTS,
    SUCCESSORS AND ASSIGNS OF ANY OF THEM ("BUYER INDEMNITEES") HARMLESS FROM
    ANY CLAIMS (INCLUDING WITHOUT LIMITATION THIRD PARTY CLAIMS FOR PERSONAL
    INJURY, INCLUDING EXPOSURE, OR REAL OR PERSONAL PROPERTY DAMAGE), ACTIONS,
    ADMINISTRATIVE PROCEEDINGS (INCLUDING INFORMAL PROCEEDINGS), JUDGMENTS,
    DAMAGES, PUNITIVE DAMAGES, PENALTIES, FINES, COSTS, LIABILITIES (INCLUDING
    SUMS PAID IN SETTLEMENT OF CLAIMS), INTEREST OR LOSSES, CONSULTANT FEES,
    ATTORNEYS' FEES AND EXPERT FEES THAT ARISE DIRECTLY OR INDIRECTLY FROM OR
    AS A RESULT OF THE EXISTENCE OF ENVIRONMENTAL CONDITIONS ACCRUING OR
    ARISING ON OR AFTER THE EFFECTIVE DATE OR A VIOLATION OF APPLICABLE
    ENVIRONMENTAL LAW IN CONNECTION WITH THE OPERATION OF THE PIPELINES BY
    BUYER ON OR AFTER THE EFFECTIVE DATE. THIS SECTION 13A.(2) SHALL SURVIVE IN
    PERPETUITY FROM AND AFTER THE EFFECTIVE DATE.

    B.  BUYER'S GENERAL INDEMNITY OF SELLER.  TO THE FULLEST EXTENT PERMITTED
BY LAW, BUT NO FURTHER, BUYER SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER
AND ITS AFFILIATES AND THE DIRECTORS, OFFICERS, SHAREHOLDERS, OWNERS,
EMPLOYEES, TENANTS, CONTRACTORS, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF
ANY OF THEM ("BUYER INDEMNITEES") FROM ANY AND ALL LOSSES, LIABILITIES, LIENS,
ENCUMBRANCES, DAMAGES, JUDGMENTS, DEMANDS, SUITS, CLAIMS, ASSESSMENTS, CHARGES,
FINES, PENALTIES, OR EXPENSES (INCLUDING ATTORNEYS' FEES AND OTHER COSTS OF
LITIGATION), WHICH RESULT FROM INJURIES TO OR DEATH OF ANY PERSONS, OR DAMAGES
TO PROPERTY OF ANY KIND OR CHARACTER WHICH OCCUR ON OR AFTER THE EFFECTIVE DATE
AND WHICH ARISE OUT OF, IN CONNECTION WITH, OR RESULT FROM: (1) THE OWNERSHIP,
POSSESSION, OPERATION, USE OR MAINTENANCE OF THE PROPERTY BY BUYER ON AND AFTER
THE EFFECTIVE DATE; OR (2) THE MATERIAL BREACH BY BUYER OF ANY OF ITS
OBLIGATIONS OR REPRESENTATIONS HEREUNDER. SUCH INDEMNIFICATION SHALL APPLY EVEN
THOUGH THE INDEMNIFIED EVENT OR OCCURRENCE ARISES FROM OR IS CAUSED BY THE
CONCURRENT OR CONTRIBUTORY NEGLIGENCE, OR

                                      16

BOTH (WHETHER ACTIVE OR PASSIVE OR OF ANY KIND OR NATURE) OR FAULT OF SELLER,
BUT SUCH INDEMNIFICATION SHALL NOT APPLY IF CAUSED BY THE GROSS NEGLIGENCE OF
SELLER. THIS PARAGRAPH SHALL NOT APPLY TO ENVIRONMENTAL LIABILITIES AS SET OUT
IN SECTION 13A.(2). THIS SECTION 13B. SHALL SURVIVE IN PERPETUITY FROM AND
AFTER THE EFFECTIVE DATE.

    C.  BUYER'S FURTHER INDEMNITY.  EXCEPT AS OTHERWISE PROVIDED HEREIN, BUYER
FURTHER AGREES TO INDEMNIFY, DEFEND AND HOLD BUYER INDEMNITEES HARMLESS FROM
ANY CLAIMS (INCLUDING WITHOUT LIMITATION THIRD PARTY CLAIMS FOR PERSONAL
INJURY, INCLUDING EXPOSURE, DEATH OR REAL OR PERSONAL PROPERTY DAMAGE) ACTIONS,
ADMINISTRATIVE PROCEEDINGS, [INCLUDING INFORMAL PROCEEDINGS] JUDGMENTS,
DAMAGES, COSTS, LIABILITIES (INCLUDING SUMS PAID IN SETTLEMENT OF CLAIMS)
INTEREST OR LOSSES, CONSULTANT FEES, ATTORNEYS' FEES AND EXPERT FEES (1) FOR
WHICH SELLER DID NOT RECEIVE NOTIFICATION AS REQUIRED BY SECTION 12C(1) WITHIN
THREE (3) YEARS AFTER THE EFFECTIVE DATE, OR (2) WHICH ARE WITHIN BUYER'S PER
CLAIM DEDUCTIBLE SET FORTH IN SECTION 12C(1), OR (3) WHICH ARE WITHIN BUYER'S
CUMULATIVE DEDUCTIBLE SET FORTH IN SECTION 12C(2), OR (4) WHICH ARE COVERED BY
SECTION 12C(1) AND ARE IN EXCESS OF SELLER'S AGGREGATE CAP SET OUT IN SECTION
12.C(1). THIS SECTION 13C. SHALL SURVIVE IN PERPETUITY FROM AND AFTER THE
EFFECTIVE DATE.

    D.  NO PUNITIVE DAMAGES.  THE FOREGOING INDEMNITIES BY BUYER UNDER THIS
ARTICLE 13 SHALL NOT COVER OR INCLUDE ANY PUNITIVE DAMAGES, PENALTIES OR FINES.

    E.  Seller's Participation in Legal Process.  Seller shall have the right
at all times to participate in the preparation for and conduction of any
hearing or trial related to the provisions of this Article 13 for which it
would receive indemnification, as well as the right to appear on its own behalf
at any such hearing or trial. Any such participation or appearance by Seller
shall be at its sole cost and expense.

                                  Article 14

                               Claims Procedure

    All claims for indemnification by a Party under Articles 12 or 13 (the
Party claiming indemnification and the Party against whom such claims are
asserted being herein called the "Indemnified Party" and the "Indemnifying
Party", respectively) shall be asserted and resolved as follows.

    A.  In the event that any Claim for which an Indemnifying Party would be
liable to an Indemnified Party hereunder is asserted against or sought to be
collected from such Indemnified Party by a Third Person, such Indemnified Party
shall, within forty-five (45) calendar days of the receipt thereof, give notice
(the "Claim Notice") to the Indemnifying Party of such Claim specifying the
nature of and specific basis for such Claim and the estimated amount thereof,
to the extent then feasible, which estimate shall not be binding upon the
Indemnified Party in its effort to collect the final amount of such Claim. The
failure to give any such notice shall not affect the rights of the Indemnified
Party to indemnification hereunder unless the Indemnified Party has proceeded
to contest, defend or settle the

                                      17

Claim with respect to which it has failed to give prior notice to the
Indemnifying Party. Additionally, to the extent the Indemnifying Party is
prejudiced thereby, the failure to so notify the Indemnifying Party of any such
Claim shall relieve the Indemnifying Party from liability that it may have to
the Indemnified Party under the indemnification provisions contained in Article
12 or Article 13, as applicable, but only to the extent of the loss directly
attributable to such failure to notify and shall not relieve the Indemnifying
Party from any liability that it may have to the Indemnified Party otherwise.

    B.  The Indemnifying Party shall be given the opportunity, at its cost and
expense, to contest and defend, by all appropriate legal Proceedings, any Claim
with respect to which it is called upon to indemnify the Indemnified Party
under the provisions of this Agreement; provided, however, that notice of the
intention to so contest and defend shall be delivered by the Indemnifying Party
to the Indemnified Party within thirty (30) calendar days following receipt of
the Claim Notice. If the Indemnifying Party does not give notice to the
Indemnified Party of its election to contest and defend any such Claim within
such period then the Indemnifying Party shall be bound by the result obtained
with respect thereto by the Indemnified Party and shall be responsible for all
costs incurred in connection therewith. The Claim which the Indemnifying Party
elects to contest and defend may be conducted in the name and on behalf of the
Indemnifying Party or the Indemnified Party as may be appropriate. Such Claim
shall be conducted by counsel employed by the Indemnifying Party who shall be
reasonably satisfactory to the Indemnified Party and the Indemnified Party
shall have the right to participate in such Claim and to be represented by
counsel of its own choosing at its own cost and expense. If the Indemnified
Party joins in any such Claim, the Indemnifying Party shall have full authority
to determine all action to be taken with respect thereto; provided that if the
Indemnifying Party reserves its rights with respect to its indemnification
obligations under this Agreement as to such Claim, then the Indemnified Party
shall have full authority to determine all action to be taken with respect
thereto. At any time after the commencement of defense of any Claim, the
Indemnifying Party may request the Indemnified Party to agree in writing to the
abandonment of such contest or to the payment or compromise by the Indemnifying
Party of the asserted Claim provided the Indemnifying Party agrees in writing
to be solely liable for all Losses relating to such Claim, whereupon such
action shall be taken unless the Indemnified Party determines that the contest
should be continued and notifies the Indemnifying Party in writing within
fifteen (15) calendar days of such request from the Indemnifying Party. In the
event that the Indemnified Party determines that the contest should be
continued, the amount for which the Indemnifying Party would otherwise be
liable hereunder shall not exceed the amount which the Indemnifying Party had
agreed to pay in payment or consideration of such Claim, provided the other
Party to the contested Claim had agreed in writing to accept such amount in
payment or compromise of the Claim as of the time the Indemnifying Party made
request therefor to the Indemnified Party, and further provided that under such
proposed compromise, the Indemnified Party would be fully and completely
released from any further liability or obligation with respect to the matters
which are the subject of such contested Claim.

    C.  If requested by the Indemnifying Party, the Indemnified Party agrees,
at the Indemnifying Party's expense, to cooperate with the Indemnifying Party
and its counsel in contesting any Claim that the Indemnifying Party elects to
contest, or, if appropriate and related to the Claim in question, in making any
counterclaim against the Person asserting the Third Person Claim, or any
cross-complaint against any Person other than an Affiliate of the Indemnified
Party.

    D.  If any Indemnified Party should have a Claim against the Indemnifying
Party hereunder that does not involve a Claim being asserted against or sought
to be collected from it by a Third Person, the Indemnified Party shall send a
Claim Notice with respect to such Claim to the Indemnifying Party. If

                                      18

the Indemnifying Party disputes such Claim, such dispute shall be resolved in
the manner set forth in Article 35 hereof.

    E.  The Indemnified Party agrees to afford the Indemnifying Party and its
counsel the opportunity, at the Indemnifying Party's expense, to be present at,
and to participate in, conferences with all Persons asserting any Claim against
the Indemnified Party and conferences with representatives of, or counsel for,
such Persons.

    F.  Upon payment of the amount of any loss, liability, lien, encumbrance,
damage, judgment, demand, suit, claim, assessment, charge, fine, penalty or
expense (including attorneys' fees and other costs of litigation) by the Buyer
pursuant to this Agreement, the Seller shall assign to the Buyer and subrogate
the Buyer to, without payment of any further consideration, all rights and
remedies of the Seller in respect of the payment and shall provide all
reasonable cooperation and assistance required by the Buyer in making and
prosecuting a claim for recovery against any Person to the extent that payment
is made by Buyer. Seller may not take any action to impair any such right or
remedy of Buyer to recover any such payment made by Buyer. By way of
clarification, the provisions of this Section 14F shall apply (without
limitation) to amounts paid by Buyer pursuant to Articles 5, 13, 14 and 15.

                                  Article 15

                       Incidental Contamination and NORM

    Buyer acknowledges that the Property may contain inter alia asbestos in
pipe coating, undisplaced petroleum hydrocarbon products in pipelines, coats of
lead-based paints, PCB's in transformers, mercury in electrical switches, and
Naturally Occurring Radioactive Material ("NORM"). Buyer also expressly
understands that special procedures may be required for the remediation,
removal, transportation and disposal of these affixed or attached substances
from the inside or outside of the piping, Equipment or the Property.
Notwithstanding any contrary provision or definition contained herein, in
connection with these substances affixed to the inside or outside of the
piping, Equipment or the Property, Buyer expressly assumes all liability for or
in connection with the future abandonment and removal of the Pipelines and
other personal property included in the Property and the assessment,
remediation, removal, transportation and disposal of any such Pipelines and
personal property and associated activities in accordance with all relevant
rules, regulations and requirements of governmental agencies.

                                  Article 16

          Tariffs and Allocation of Carrier Obligations and Proceeds

    A.  Buyer agrees that, for a Pipeline which has tariffs on file with a
regulatory agency, it will either adopt the Seller's tariff or file its own to
be effective as of the Effective Date, if required by law to do so. If there is
a protest regarding Seller's cancellation of its tariff, as between Seller and
Buyer, Buyer will manage and direct the response to the protest with Seller's
cooperation. Seller will be responsible for all regulatory agency and Third
Person contacts.

    B.  The Pipelines contain crude oil which is held for the account of
shipper(s). It is understood that title to the contents of the Pipelines will
remain with the shipper(s) and that Buyer assumes the obligation to handle such
contents in accordance with applicable published tariff provisions. Further, to

                                      19

the extent that such crude oil has been tendered for shipment in the Pipelines
under an applicable published tariff, but not yet delivered, Buyer shall
receive that crude oil for transportation in accordance with applicable
published tariffs.

                                  Article 17

                                 Segregations

    Buyer will continue the following segregation activities at Wasson and
Hendrick stations for a period of ten (10) years after the Closing at no cost
to Seller or any of its Affiliates.

    A.  Wasson Segregation: Tanks No. 340 and 818 at Wasson Station shall be
segregated and shall only receive crude commonly known as high gravity sour
crude from the Wasson Gathering System and the Northwest Seminole System. The
gravity of this crude is currently 34 deg API or greater. If nominated in a
sufficient quantity by a shipper, the crude shall be batched to Basin via the
Wasson to Jal line and batched on the Basin pipeline for delivery at Cushing.

    B.  Hendrick Segregation: Tank No. 256 shall be segregated to receive crude
from the TXL gathering system via Wheeler to the Hendrick pipeline system. The
crude which shall continue to be segregated at Hendrick is commonly referred to
as low sulfur sour crude. If nominated by a shipper, the crude shall be
delivered to Plains All American's Wink Station via the Shell Pipeline 6/8"
pipeline which is one of the Pipelines being sold in this transaction.

    C.  If neither Seller nor any Affiliate of Seller utilizes the segregated
tank capacity under clause A or B above for a period of 12 consecutive months,
then the rights granted to Seller under such clause A or B (as applicable)
shall terminate.

                                  Article 18

                                  Cooperation

    From the date of this Agreement, the Parties shall execute and deliver such
additional documents and shall use all Reasonable Efforts: (1) to take or cause
to be taken all such actions as may be necessary or advisable to close and make
effective this transaction, (2) upon the request of Buyer, after Closing,
Seller shall assist in obtaining consents from Third Persons which are
necessary or appropriate to transfer any portion of the Property, (3) upon the
request of Buyer, assist Buyer in arranging meetings with managerial and
supervisory personnel and employees of Seller engaged in the business conducted
in connection with the Property for the purposes of Buyer describing employment
opportunities with Buyer and Buyer determining to whom it may elect to submit
employment offers, such assistance to include the distribution of notices
prepared by Buyer notifying the employees and/or the collective bargaining
representatives of the time, date and location of such meetings, (4) upon
request by Buyer, to assist Buyer in making presentations to the Texas Railroad
Commission regarding the extension of the time periods for any required testing
of the pipelines included in the Property by making available for attendance at
such meetings the appropriate personnel with the requisite level of knowledge
about such pipelines, (5) upon request by Buyer, to assist Buyer in contacting,
following the expiration of the Review Period, the other owners of the Basin
and Rancho pipeline systems for the purposes of facilitating Buyer succeeding
to Seller's status as operator, and (6) upon or after the Closing, upon request
of Buyer to resign as operator of the Basin and Rancho pipeline systems. It
shall

                                      20

be Buyer's responsibility to obtain all governmental and Third Person consents
and approvals necessary for the issuance, reissuance or transfer of
environmental and land use permits, applications, Rights -of-Way, authorities
to construct, Permits to operate, authorizations and licenses used or held by
Seller or otherwise required in connection with the ownership, operation, use
and maintenance of the Property. After Closing, each Party, at the request of
the other Party, and without additional consideration, shall execute and
deliver, from time to time, such additional documents of conveyance and
transfer as may be necessary to accomplish the orderly transfer of the Property
to Buyer in the manner contemplated in this Agreement.

                                  Article 19

                            Survival of Provisions

    All representations and warranties, covenants of the Parties and the
indemnification obligations of the Parties set forth in this Agreement shall
survive the Closing.

                                  Article 20

                              Costs and Expenses

    Except as otherwise expressly provided herein, each Party shall bear and
pay its own costs and expenses, including but not limited to attorneys' fees,
incurred in connection with this transaction.

                                  Article 21

                                 Risk of Loss

    The risk of damage, destruction, or other Casualty Loss to or of the
Property shall remain with Seller from and after the execution of this
Agreement until the Effective Date, at which time Seller shall place Buyer in
possession of the Property; and from and after the Effective Date, all risks of
damage, destruction, or other Casualty Loss to or of the Property shall be
borne solely by Buyer.

                                  Article 22

                     Joint Venture, Partnership and Agency

    Nothing contained in this Agreement shall be deemed to create a joint
venture, partnership, tax partnership or agency relationship between the
Parties.

                                  Article 23

                               Files and Records

    Not later than sixty (60) calendar days after Closing, Seller shall deliver
to Buyer originals of the files, records, documents and data referred to in
Section 1.A.7. If this transaction is not closed as to any portion of the
Property, all originals or copies of files, records and documents referred to
in Section 1.A.7, obtained from Seller in connection with the exercise of
Buyer's Pre-Acquisition Review, and related solely to that portion of the
Property not transferred as contemplated herein, shall be returned to Seller
within five (5) calendar days after Closing.

                                      21

                                  Article 24

                                   Publicity

    Seller and Buyer shall, and each shall use its reasonable efforts to cause
its Affiliates to, cooperate in the development and distribution of all news
releases and other public disclosures, irrespective of the form of
communication, relating to the proposed transaction described in this
Agreement, and to ensure that no such releases or disclosures are made without
prior notice to, and the prior written consent of, the other Party; provided,
however, no news release or other disclosure whatsoever may disclose the terms
of this Agreement unless both Parties agree to the form and content of such
disclosure, including electronic communications, each being under no obligation
to agree and having the right to withhold agreement for any reason; provided,
however, that either Party may make all disclosures which, in the written
opinion of counsel, are required under applicable Law, including, but not
limited to, regulations of the Securities and Exchange Commission, with the
Party making the disclosure giving the other Party as much advance notice
thereof as is feasible.

                                  Article 25

                             Recording and Filing

    Except as may be required by Law, this Agreement shall not be recorded or
filed by either Party, or their successors or assigns, in or with any public or
government office, officer, agency or records repository without the prior
written consent of the other Party.

                                  Article 26

                                Confidentiality

    Seller and Buyer (and their respective Affiliates) each acknowledge that
the information and material, in whatever form, including, but not limited to,
this Agreement and the Exhibits, Annex and Disclosure Schedule (collectively,
the "Confidential Information") disclosed or made available to it by, and
relating to the other (and its Affiliates) prior to the Effective Date is
confidential. Seller and Buyer (and their respective Affiliates) each further
agree that it shall use reasonable efforts not to make disclosure of the
Confidential Information to any Person, irrespective of the form of
communication, other than its members or owners, officers, employees, advisers
and representatives to whom such disclosure is necessary or convenient for (i)
the completion of the transaction contemplated by this Agreement, (ii) as
required to convey title, (iii) as required by Law, including regulations of
the Securities and Exchange Commission (iv) in an arbitration proceeding as
described in Article 35 or (v) as may be required by a court of competent
jurisdiction. Seller and Buyer (and their respective Affiliates) shall each
appropriately notify each officer, employee, adviser and representative to whom
any such disclosure is made, that such disclosure is made in confidence and
shall be kept in confidence.

                                      22

                                  Article 27

                                    Notices

    All notices and consents required or authorized hereunder shall be in
writing and shall be deemed to have been duly given by one Party if delivered
personally, faxed with receipt acknowledged, mailed by registered or certified
mail, delivered by a recognized commercial courier or otherwise actually
received by the other Party at the address set forth below, or such other
address as one Party shall have designated by ten (10) calendar days prior
written notice to the other Party:

          Buyer's Address:                   Seller's Address:
          ----------------                   -----------------
                                          
          Plains All American Pipeline, L.P. Shell Pipeline Company LP
          333 Clay Street, Suite 1600        777 Walker Street
          Houston, Texas 77002               Houston, Texas 77002
          Attn: Harry N. Pefanis             Attn: Arlene Warden
          Telephone: (713) 646-4242          Telephone: (713) 241-4492
          Fax: (713) 646-4378                Fax: (713) 241-7643

          With a copy to:
          Plains All American Pipeline, L.P.
          333 Clay Street, Suite 1600
          Houston, Texas 77002
          Attn: Lawrence J. Dreyfuss
          Telephone: (713) 646-4143
          Fax: (713) 646-4216

                                  Article 28

                              Time of Performance

    Time is of the essence in the performance of all covenants and obligations
under this Agreement.

                                  Article 29

                               Entire Agreement

    This Agreement constitutes the entire agreement between the Parties with
respect to this transaction and supersedes all prior negotiations, statements,
representations, discussions, correspondence, offers, agreements, and
understandings relating to this transaction. This Agreement may be modified,
amended or supplemented only upon the prior written agreement of the Parties.

                                  Article 30

                                  Assignment

    Buyer may not sell, assign, transfer, or convey, option, mortgage, pledge
or hypothecate its rights and obligations hereunder to any Third Person without
the prior written consent of Seller, which consent shall not be unreasonably
withheld, other than the pre-existing security agreements in favor of the
lenders under Buyer's senior secured credit facility which do not have a
detrimental effect on

                                      23

Seller. Upon any authorized sale, assignment, transfer, conveyance, option,
mortgage, pledge or hypothecation hereunder, all of the terms, covenants and
conditions of this Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Buyer, but Buyer shall remain liable
for the performance of its obligations hereunder. In connection with Closing,
Buyer shall have the right to designate one or more of its Affiliates to be the
transferee under the Conveyance Documents.

                                  Article 31

                              Crude Oil Inventory

    The Pipelines will be gauged at 7:00 a.m. local time on the Effective Date,
at which time the custody of all shippers' oil will be transferred to Buyer,
and Buyer shall become responsible to each shipper for oil in Buyer's custody.
The inventory will be determined by the inventory determination procedure
contained in Exhibit "K" attached hereto and the quantity and quality of the
crude oil in Seller's possession shall be accurately set forth on the final
shipper's statements. At the time of the transfer of custody of the shippers'
oil, Seller shall become a shipper of any allowance oil or other oil held in
inventory for Seller which remains in the Pipelines on the Effective Date.

                                  Article 32

                                Applicable Law

    THIS AGREEMENT, OTHER DOCUMENTS EXECUTED AND DELIVERED PURSUANT HERETO, AND
THE LEGAL RELATIONS BETWEEN THE PARTIES WITH RESPECT TO THIS AGREEMENT, SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO RULES CONCERNING CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE
PERFORMED IN HARRIS COUNTY, TEXAS.

                                  Article 33

                                   Headings

    The headings used in this Agreement are inserted for convenience only and
shall be disregarded in construing it.

                                      24

                                  Article 34

                                   Exhibits

    The Exhibits, Annex, and Schedule listed below are attached to this
Agreement and by this reference are fully incorporated herein:

                                 
           Annex A                  Definitions
           Exhibits "A" & "A-1-A-4" Pipelines
           Exhibits "B-1-B-4"       Real Property
           Exhibits "C-1-C-4"       Rights-of Way and Permits
           Exhibits "D-1-D-4"       Assigned Contracts
           Exhibits "E-1-E-4"       Equipment
           Exhibits "F-1-F-4"       Excluded Assets
           Exhibit "G"              Purchase Price Allocation
           Exhibit "H"              Assignment [Partial Assignment]
           Exhibit "I"              Special Warranty Deed
           Exhibit "J"              Bill of Sale
           Exhibit "K"              Inventory Determination Procedure
           Exhibit "L"              Specimen Insurance Policy
           Exhibit "M"              Form of Consent to Assignment

           Disclosure Schedule

                                  Article 35

                              Dispute Resolution

    Any dispute, controversy or claim ("Dispute"), whether based on contract,
tort, statute or other legal or equitable theory (including, but not limited
to, any Dispute concerning fraud, misrepresentation, or fraudulent inducement
or any question of validity or effect of this Agreement, including this clause)
arising out of or related to this Agreement (including any amendments or
extensions) the breach or termination hereof or thereof, shall be settled by
arbitration in accordance with the then current CPR Institute for Dispute
Resolution Rules for Non-Administered Arbitration of Business Disputes and this
provision The arbitration shall be governed by the United States Arbitration
Act 9 U.S.C.(S)(S)1-16 to the exclusion of any provision of state law
inconsistent therewith or which would produce a different result and judgment
upon the award rendered by the arbitrator may be entered by any court having
jurisdiction.

                                  Article 36

                               Other Provisions

    A.  Transition Services.  Seller will assist and cooperate with Buyer in
order to effectuate an orderly transition. Upon Buyer's request, and at Buyer's
expense, Seller will provide transition services, to the extent it can perform
these services requested by Buyer, including services relating to the
operatorship of the Basin or Rancho pipeline systems if Buyer encounters
problems in succeeding to Seller's position as operator of those systems for a
period not to exceed six (6) months. The transition services shall include
monitoring and control services, joint interest accounting services, field
operations as needed, and such other services as may be reasonably requested by
Buyer which can

                                      25

be performed by Seller. At the Closing Seller and Buyer shall execute an
agreement covering such transition services, which agreement shall be in form
and content reasonably satisfactory to Seller and Buyer.

    B.  Records.  Notwithstanding the inclusion of certain records, files and
other data in the Property under Article 1, Seller shall have the right to copy
and retain any copies of records, files and other data relating to the Property
for which it has, or may have, any business, technical or legal need. To the
extent that those records, files and other data or any other information made
available to Buyer before or after the Closing contain proprietary business or
technical information of Seller or its Affiliates, Buyer agrees to hold such
records, files and other data in confidence and limit their use to the Property.

    Buyer shall not destroy or otherwise dispose of any records, files and
other data acquired hereunder for a period of three (3) years following the
Closing (except as to Tax records for which the period shall be the applicable
statute of limitations) except upon thirty (30) days prior written notice to
Seller. During such periods, Buyer shall make such records, files and other
data available to Seller or its authorized representatives for any business,
legal or technical need in a manner which does not unreasonably interfere with
Buyer's business operations.

    C.  No Third Person Beneficiaries.  Except to the extent a Third Person is
expressly given rights herein, any agreement contained, expressed or implied in
this Agreement shall be only for the benefit of the Parties hereto and their
respective legal representatives, successors and permitted assigns, and such
agreements shall not inure to the benefit of the obligees of any indebtedness
of either Party hereto, it being the intention of the Parties hereto that no
Person shall be deemed a Third Person beneficiary of this Agreement, except to
the extent a Third Person is expressly given rights herein. Notwithstanding
anything herein to the contrary, nothing herein shall be deemed to create any
rights with respect to any employee of either Party or any employee of any
Affiliate of a Party, except as expressly provided herein with respect to an
Indemnified Party under Article 12 or Article 13.

    D.  Counterparts and Facsimiles.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument. A facsimile transmission of a
signed copy of this Agreement shall be deemed an original and shall have the
same valid and binding effect thereof.

    E.  Governing Agreement.  In the event of a conflict between the terms of
this Agreement and the terms of any other documents (including the Conveyance
Documents) delivered pursuant to the terms hereto, this Agreement shall prevail
and the terms of this Agreement shall not be merged into or superseded by any
Conveyance Documents.

             [THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

                                      26

    IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

                                          SHELL PIPELINE COMPANY LP

                                                    /s/ Stacy Methvin
                                          By:________________________________
                                             Title: President

                                          EQUILON ENTERPRISES LLC DBA
                                          SHELL OIL PRODUCTS US

                                                    /s/ Rob J. Routs
                                          By:________________________________
                                             Title: President

                                          PLAINS ALL AMERICAN PIPELINE, L. P.
                                          By Plains AAP, L. P.
                                          Its General Partner
                                          By Plains All American GP LLC
                                          Its General Partner

                                                    /s/ Harry N. Pefanis
                                          By:________________________________
                                             Title: President

                                      27