NuStar Energy (NS) 8-K NuStar Energy L.P. Reports Better-Than-Expected Second Quarter 2008 Earnings and Announces Quarterly Distribution

Exhibit 99.1

NuStar Energy L.P. Reports Better-Than-Expected Second Quarter 2008 Earnings and Announces Quarterly Distribution

Best Quarter in NuStar’s History Excluding Hedging Loss and Other Items

SAN ANTONIO, July 25, 2008 – NuStar Energy L.P. (NYSE:NS) today announced net income applicable to limited partners of $8.2 million, or $0.15 per unit, for the second quarter of 2008, which is better than the break-even earnings estimate that was communicated in the interim second quarter guidance update. These results compare to $34.6 million, or $0.74 per unit, earned in the second quarter of 2007. For the six months ended June 30, 2008, net income applicable to limited partners was $57.9 million, or $1.12 per unit, compared to $61.2 million, or $1.31 per unit, for the six months ended June 30, 2007.

Excluding the impact of the cash hedging loss and other items, adjusted net income applicable to limited partners for the second quarter of 2008 would have been $68.1 million, or $1.25 per unit. For the six months ended June 30, 2008, net income applicable to limited partners would have been $108.5 million, or $2.09 per unit. As communicated on May 28 in NuStar Energy L.P.’s guidance update, the second quarter 2008 results include a $61.3 million, or $1.10 per unit, loss associated with crude oil and refined product hedges placed on approximately 30 percent of the total inventories acquired with the CITGO asphalt acquisition on March 20.

With respect to the quarterly distribution to unitholders for the second quarter of 2008, NuStar Energy L.P. also announced that its board of directors has declared a distribution of $0.985 per unit, which would equate to $3.94 per unit on an annualized basis. This quarterly distribution represents an increase of $0.035 per unit, or 3.7 percent, over the $0.95 per unit distribution for the second quarter of 2007 and will be paid on August 13, 2008, to holders of record as of August 6, 2008.

“We are pleased to announce that we delivered better-than-expected earnings primarily due to stronger asphalt margins and higher asphalt volumes sold,” said Curt Anastasio, Chief Executive Officer and President of NuStar Energy L.P. and NuStar GP Holdings, LLC. “Without the hedging loss, our earnings for the second quarter would have been the highest quarterly earnings ever reported by NuStar, which follows our record earnings in the first quarter of 2008. The operating income contribution from the asphalt business in the second quarter was $52.8 million before the hedging loss, which was even better than we expected and our base business continues to perform well.

“I am excited to announce that we have recently completed storage expansion projects at our facilities in Texas City, Texas and St. James, Louisiana. We expect that several other storage expansion projects will be complete by the end of the third quarter, including projects at St.

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James, Louisiana; Jacksonville, Florida; Amsterdam in the Netherlands and Linden, New Jersey (New York Harbor). When completed, these projects are expected to add approximately $20 million to operating income in 2008 over 2007. With our $400 million construction program drawing to an end, we are focusing on the next phase of growth primarily associated with storage expansion projects in the U.S. and internationally.

“Our employees have done a great job of integrating the asphalt assets into our system. We have identified around $35 million of high-return, quick pay-back projects at both the Paulsboro and Savannah asphalt plants and we continue to evaluate other opportunities at these facilities,” he said.

Distributable cash flow available to limited partners for the second quarter of 2008 was $31.5 million, or $0.58 per unit, compared to $53.6 million, or $1.15 per unit, for the second quarter of 2007. For the six months ended June 30, 2008, distributable cash flow available to limited partners was $103.5 million, or $2.04 per unit, compared to $101.0 million, or $2.16 per unit for the six months ended June 30, 2007. Distributable cash flow available to limited partners covers the distribution to the limited partners by 0.59 times for the second quarter of 2008.

Excluding the impact of the cash hedging loss and other items, distributable cash flow available to limited partners for the second quarter of 2008 would have also been the best in the partnership’s history at $92.7 million, or $1.70 per unit, and the coverage ratio available to limited partners would have been a strong 1.73 times. For the six months ended June 30, 2008, distributable cash flow available to limited partners would have been $155.2 million, or $2.97 per unit, and the coverage ratio available to limited partners would have been 1.51 times before the hedging loss and other items.

“We continue to believe third quarter 2008 earnings will be exceptionally strong and the contribution from the asphalt business for 2008, even with the hedging loss, to be in the EBITDA range previously communicated. The good news is that we expect to increase the distribution in the third quarter of 2008. Despite the recent drop in crude oil prices, asphalt prices have continued to increase dramatically due to tight supplies and are expected to be even higher in the third quarter of 2008 compared to the second quarter of 2008. Based on current fundamentals, we now expect asphalt prices of between $625 and $700 per short ton for the third quarter of 2008, which is significantly higher than $450 per short ton we averaged in the second quarter. As a result, third quarter 2008 margins for the asphalt business are also expected to be significantly better. While we expect refined product and crude oil pipeline volumes to decline slightly primarily due to high fuels prices, increases in transportation tariffs should offset most of

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the negative financial impact of lower volumes. In addition, we expect to see continued good results from our storage business since the majority of it is contracted from three to ten years,” said Anastasio.

A conference call with management is scheduled for 11:00 a.m. ET (10:00 a.m. CT) today, July 25, 2008, to discuss the financial and operational results for the second quarter of 2008. Investors interested in listening to the presentation may call 800/622-7620, passcode 54135570. International callers may access the presentation by dialing 706/645-0327, passcode 54135570. The company intends to have a playback available following the presentation, which may be accessed by calling 800/642-1687, passcode 54135570. A live broadcast of the conference call will also be available on the company’s Web site atwww.nustarenergy.com.

NuStar Energy L.P. is a publicly traded, limited partnership based in San Antonio, with 9,063 miles of pipeline, 85 terminal facilities, four crude oil storage tank facilities and two asphalt refineries with a combined throughput capacity of 104,000 barrels per day. One of the largest asphalt refiners and marketers in the U.S. and the second largest independent liquids terminal operator in the nation, NuStar has operations in the United States, the Netherlands Antilles, Canada, Mexico, the Netherlands and the United Kingdom. The partnership’s combined system has over 88 million barrels of storage capacity, and includes two asphalt refineries, crude oil and refined product pipelines, refined product terminals, a petroleum and specialty liquids storage and terminaling business, as well as crude oil storage facilities. For more information, visit NuStar Energy L.P.’s Web site atwww.nustarenergy.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding future events. All forward-looking statements are based on the partnership’s beliefs as well as assumptions made by and information currently available to the partnership. These statements reflect the partnership’s current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in NuStar Energy L.P.’s 2007 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information

(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Statement of Income Data:
Revenues:
Services revenues	$	180,555		$	162,940		$	360,671		$	323,293
Product sales		1,197,025			158,092			1,609,683			294,563
Total revenues		1,377,580			321,032			1,970,354			617,856
Costs and expenses:
Cost of product sales		1,175,916			148,061			1,568,925			275,988
Operating expenses		106,928			85,444			195,378			166,656
General and administrative expenses		19,544			17,581			35,627			32,489
Depreciation and amortization expense		34,830			27,860			64,876			55,202
Total costs and expenses		1,337,218			278,946			1,864,806			530,335
Operating income		40,362			42,086			105,548			87,521
Equity earnings from joint ventures		1,749			1,746			3,950			3,357
Interest expense, net		(24,934	)		(19,452	)		(41,799	)		(38,306	)
Other income, net		631			17,100			10,540			23,723
Income before income tax expense		17,808			41,480			78,239			76,295
Income tax expense		3,718			1,783			8,280			5,475
Net income		14,090			39,697			69,959			70,820
Less net income applicable to general partner (Note 1)		(5,885	)		(5,118	)		(12,087	)		(9,572	)
Net income applicable to limited partners	$	8,205		$	34,579		$	57,872		$	61,248
Income per unit applicable to limited partners (Note 1):	$	0.15		$	0.74		$	1.12		$	1.31
Weighted average number of basic units outstanding		54,372,035			46,809,749			51,890,892			46,809,749
EBITDA (Note 2)	$	77,572		$	88,792		$	184,914		$	169,803
Distributable cash flow (Note 2)	$	38,425		$	59,020		$	117,358		$	111,248

	June 30, 2008			June 30, 2007			December 31, 2007
Balance Sheet Data:
Debt, including current portion (a)	$	2,182,813		$	1,446,044		$	1,446,289
Partners' equity (b)		2,189,301			1,862,473			1,994,832
Debt-to-capitalization ratio (a) / ((a)+(b))		49.9	%		43.7	%		42.0	%

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information—Continued

(Unaudited, Thousands of Dollars, Except Barrel Data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Segment Data:(Note 3)
Storage:
Throughput (barrels/day)		760,856			781,669			778,054			781,331
Throughput revenues	$	23,029		$	23,152		$	46,150		$	45,702
Storage lease revenues		88,631			76,188			174,623			150,052
Total revenues		111,660			99,340			220,773			195,754
Operating expenses		61,121			55,225			115,119			108,805
Depreciation and amortization expense		16,697			15,335			32,648			30,436
Segment operating income	$	33,842		$	28,780		$	73,006		$	56,513
Transportation:
Refined products pipelines throughput (barrels/day)		700,024			647,887			697,397			632,393
Crude oil pipelines throughput (barrels/day)		411,600			348,482			408,782			348,052
Total throughput (barrels/day)		1,111,624			996,369			1,106,179			980,445
Revenues	$	77,028		$	65,255		$	152,807		$	131,028
Operating expenses		30,473			29,194			60,330			56,932
Depreciation and amortization expense		12,797			12,525			25,402			24,766
Segment operating income	$	33,758		$	23,536		$	67,075		$	49,330
Asphalt and fuels marketing:(Note 4)
Product sales	$	1,197,054		$	158,092		$	1,609,712		$	294,563
Cost of product sales		1,179,489			149,049			1,575,671			278,092
Operating expenses		19,860			1,692			26,078			2,304
Depreciation and amortization expense		4,520			—			5,208			—
Segment operating income	$	(6,815	)	$	7,351		$	2,755		$	14,167
Consolidation and intersegment eliminations:
Revenues	$	(8,162	)	$	(1,655	)	$	(12,938	)	$	(3,489	)
Cost of product sales		(3,573	)		(988	)		(6,746	)		(2,104	)
Operating expenses		(4,526	)		(667	)		(6,149	)		(1,385	)
Depreciation and amortization expense		816			—			1,618			—
Total	$	(879	)	$	—		$	(1,661	)	$	—
Consolidated Information:
Revenues	$	1,377,580		$	321,032		$	1,970,354		$	617,856
Cost of product sales		1,175,916			148,061			1,568,925			275,988
Operating expenses		106,928			85,444			195,378			166,656
Depreciation and amortization		34,830			27,860			64,876			55,202
Segment operating income		59,906			59,667			141,175			120,010
General and administrative expenses		19,544			17,581			35,627			32,489
Consolidated operating income	$	40,362		$	42,086		$	105,548		$	87,521

NuStar Energy L.P. and Subsidiaries

Consolidated Financial Information—Continued

(Unaudited, Thousands of Dollars, Except Unit Data and Per Unit Data)

Notes:

1. Net income is allocated between limited partners and the general partner's interests based on provisions in the partnership agreement. The net income applicable to limited partners is divided by the weighted average number of limited partnership units outstanding in computing the net income per unit applicable to limited partners. The following table details the calculation of net income applicable to the general partner:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net income applicable to general partner and limited partners' interest	$	14,090		$	39,697		$	69,959		$	70,820
Less general partner incentive distribution		5,718			4,413			10,906			8,323
Net income after general partner incentive distribution		8,372			35,284			59,053			62,497
General partner interest		2	%		2	%		2	%		2	%
General partner allocation of net income after general partner incentive distribution		167			705			1,181			1,249
General partner incentive distribution		5,718			4,413			10,906			8,323
Net income applicable to general partner	$	5,885		$	5,118		$	12,087		$	9,572

2. NuStar Energy L.P. utilizes two financial measures, EBITDA and distributable cash flow, which are not defined in United States generally accepted accounting principles. Management uses these financial measures because they are widely accepted financial indicators used by investors to compare partnership performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the partnership's assets and the cash that the business is generating. Neither EBITDA nor distributable cash flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles. The following is a reconciliation of net income to EBITDA and distributable cash flow:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net income	$	14,090		$	39,697		$	69,959		$	70,820
Plus interest expense, net		24,934			19,452			41,799			38,306
Plus income tax expense		3,718			1,783			8,280			5,475
Plus depreciation and amortization expense		34,830			27,860			64,876			55,202
EBITDA		77,572			88,792			184,914			169,803
Less equity earnings from joint ventures		(1,749	)		(1,746	)		(3,950	)		(3,357	)
Less interest expense, net		(24,934	)		(19,452	)		(41,799	)		(38,306	)
Less reliability capital expenditures		(9,214	)		(7,335	)		(16,918	)		(11,961	)
Less income tax expense		(3,718	)		(1,783	)		(8,280	)		(5,475	)
Plus distributions from joint ventures		—			544			500			544
Mark-to-market impact on hedge transactions (a)		468			—			2,891			—
Distributable cash flow		38,425			59,020			117,358			111,248
General partner's interest in distributable cash flow		(6,929	)		(5,410	)		(13,858	)		(10,274	)
Limited partners' interest in distributable cash flow	$	31,496		$	53,610		$	103,500		$	100,974
Distributable cash flow per limited partner unit	$	0.579		$	1.145		$	2.036		$	2.157

(a) Distributable cash flow excludes the impact of mark-to-market gains and losses which arise from valuing certain derivative contracts.

3. Beginning in the second quarter of 2008, we revised the manner in which we internally evaluate our segment performance and made certain organizational changes. As a result, we combined the refined product terminals and crude oil storage tanks segments to create the storage segment, and we combined the refined product pipelines and crude oil pipelines segments to create the transportation segment. Previous periods have been restated to conform to this presentation.

4. The asphalt and fuels marketing segment includes our two asphalt refineries, which we acquired on March 20, 2008, as well as our marketing and trading operations. Additional operational information related to the asphalt and fuels marketing segment is available on our website at www.nustarenergy.com under the investors portion of the website.