NuStar Energy (NS) 8-K Regulation FD Disclosure

Dallas Investors Forum

May 16, 2009

Steve Blank, Senior VP, CFO & Treasurer

Exhibit 99.1

This presentation contains certain estimates, predictions, projections, assumptions and

other

forward-looking

statements

that

involve

various

risks

and

uncertainties.

While

these forward-looking statements, and any assumptions upon which they are based,

are made in good faith and reflect our current judgment regarding the direction of our

business, actual results will almost always vary, sometimes materially, from any

estimates,

predictions,

projections,

assumptions

or

other

future

performance

suggested in this report. These forward-looking statements can generally be identified

by the words "anticipates," "believes," "expects," "plans," "intends," "estimates,"

"forecasts," "budgets," "projects," "will," "could," "should," "may" and similar

expressions. These statements reflect our current views with regard to future events

and

are

subject

to

various

risks,

uncertainties

and

assumptions.

For

a

discussion

of

certain

of

those

risks,

please

read

"Risk

Factors"

in

Item

1A

of

both

NuStar

Energy

L.P's

and

NuStar

GP

Holdings,

LLC's

respective

annual

reports

on

Form

10-K

for

the

year ended December 31, 2008 and each entity’s subsequent quarterly reports as filed

with the Securities and Exchange Commission.

Forward Looking Statements

2

Basics of MLPs

Basics of MLPs –

What is a MLP? 

What is a MLP?

Master

Limited

Partnerships

(MLPs)

-

Partnerships

whose

interests

(units)

are

traded

on

public

exchanges (i.e. NYSE, American, Nasdaq) like corporate stocks

Who are the Owners of a MLP?

MLPs consist of a general partner and limited partner

As

provided

in

the

applicable

partnership

agreement,

the

general

partner

(1)

manages

the

partnership,

(2) generally has a 2% ownership and (3) may be eligible to receive incentive distributions

The limited partners are similar to shareholders.  They (1) provide capital, (2) have no role in the

operations of the partnership, (3) and receive cash distributions

What Qualifies As a MLP?

Tax incentives for certain limited partnerships were enacted by Congress to encourage investment in

U.S. energy infrastructure

Rules

added

to

the

tax

code

in

1987

require

any

partnership

that

is

publicly

traded

to

receive

at

least

90%

of

its

income

from

qualifying

sources

in

order

to

qualify

as

an

MLP

If an entity doesn’t meet the criteria, then for tax purposes, it is treated as a corporation

Qualified sources include:

Natural resource activities, interest, dividends, real estate rents, income from sale of real property, gain on sale of

assets, and income and gain from commodities or commodity futures

“Natural

resource

activities”

include

exploration,

development,

mining

or

production,

processing,

refining,

transportation, storage and marketing of any mineral or natural resource

Currently, most MLPs are involved in energy related businesses

What are the key differences between partnerships and corporations?

Primary advantage that partnerships have over corporations is the elimination of

“Double Taxation”

MLPs do not pay corporate tax; Instead all tax items are passed through to the partners

Allows more of earnings free to pass down to unitholders

Unitholders

enjoy

tax

deferral

status

on

distributions,

which

are

considered

a

return

of

capital

Unitholders

receive K-1 tax statements vs. 1099 tax statements for corporate

shareholders

When units are sold, investors are taxed on deferred portion of the distribution at

ordinary tax rates and capital gain rates on the sale of units

Basics of MLPs –

What are the Differences between                               

MLPs and Corporations?

Basics of MLPs –

Why Invest in MLPs?

Why invest in MLPs?

Offers

a

tax-efficient

way

to

invest

in

energy

while

receiving

current

income

through

distributions

and the opportunity for growth through internal growth or acquisitions

Strong performance track record versus the equity market

MLPs have outperformed the S&P 500 over the past 10 years by over 115%

Generous

distribution

yields

(Alerian

MLP

Index

yield

is

currently

around

9.7%)

Most MLPs generate stable cash flows

An investment in MLPs is an investment in the build-out of the U.S. energy infrastructure

Total

Return

-

Alerian

MLP

Index

vs.

S&P

500

(Last

10

Years)

5/12/1999

11/9/2001

5/12/2004

11/10/2006

5/13/2009

0%

50%

100%

150%

200%

250%

300%

350%

Indexed Price

S&P 500

Alerian MLP

S&P 500 (33%)

Alerian MLP Index 83%

Note:  The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships

NuStar Overview

NuStar Energy L.P. is a leading publicly traded

growth-oriented partnership (NYSE: NS) with a

market capitalization of approximately $2.8 billion

and an enterprise value of approximately $4.7

billion

One of the largest independent petroleum pipeline

and terminal operators in the U.S. and one of the

largest asphalt refiners and marketers in the U.S.

Has delivered record performances since its IPO in

2001

Ranked #485 on the Fortune 500 Listing for the first

time ever based on 2008 results

NuStar GP Holdings, LLC (NYSE: NSH) holds the

2% general partner interest, 18.4% of the common

units and incentive distribution rights in NuStar

Energy L.P.

NSH receives quarterly distributions from its

ownership interests and in turn pays out quarterly

distribution to its unitholders

Unitholders should benefit from potentially higher

growth in distributions from ownership of incentive

distribution rights

NuStar Overview –

Two Publicly Traded Companies

8

NS

NSH

IPO Date:

4/16/2001

7/19/2006

Unit Price (5/13/09):

$50.85

$22.89

Annual Distribution/Unit:

$4.23

$1.72

Yield (5/13/09):

8.32%

7.51%

Market Equity Capitalization:

$2,769 million

$974 million

Enterprise Value:

$4,681 million

$976 million

Total Assets (3/31/09):

$4,505 million

$570 million

Debt/Capitalization (3/31/09):

46.9%

n/a

Fortune 500 Ranking:

485

n/a

High quality, large and diverse asset footprint with

operations in eight different countries including the

U.S., Mexico, Netherlands, Netherland Antilles (i.e.

Caribbean), England, Ireland, Scotland and Canada

Third largest independent liquids terminal operator in

the world and second largest in the U.S. that

provides significant growth opportunities

No. 1 asphalt producer on the East Coast and No. 3

asphalt producer in the U.S.

Expect asphalt operations to provide further upside to

financial results as asphalt markets continue to tighten

What Sets NuStar Apart from its Peers

9

Investment grade credit rating with demonstrated access to capital markets in difficult conditions

Do not anticipate need to access capital markets in 2009 except for accretive acquisitions

Lower cost of capital versus majority of peers

Top Incentive Distribution Rights (IDRs) capped at 25% vs. 50% for most MLPs

Strong corporate culture of taking care of employees, making safety a top priority, achieving

operational excellence and contributing time and money to our communities

Recognized in 2008 as one of the best places to work for in America and for our strong safety record

Experienced and proven management team with substantial equity ownership and industry

experience

Assets Stats:

8,491 miles of crude oil and refined

product pipelines

82 terminal facilities and four crude

oil storage tank facilities

Over 91 million barrels of storage

capacity

2 asphalt refineries capable of

processing 104,000 bpd of crude oil

Asset Overview

10

37%

35%

28%

Percent of 2008 Segment Operating

Income

Diversification of operations provides various earnings streams and reduces risk

Approximately 72% of NuStar Energy’s segment operating income in 2008 related to stable,

fee-based operations

Remainder of segment operating income related to margin-based asphalt and fuels

marketing segment

Storage (~37%)

Transportation (~35%)

Refined Product Terminals

Crude Oil Storage

Refined Product Pipelines*

Crude Oil Pipelines

Asphalt & Fuels Marketing (~28%)

Asphalt

Fuels Marketing

Product Supply, Wholesale and Fuel Oil Marketing

Bunkering/Other

Diversified Operations

11

*  Includes fuel oil, gasoline, propane, jet fuel, ammonia and other light ends.  Does not include natural gas. 

Independent Liquids Storage Capacity

(Millions of Barrels)

8

8

10

12

16

20

24

25

31

34

39

60

85

91

91

104

171

Global Leader in Independent                      

Liquids Storage

NuStar is the third largest independent liquids terminal operator in the world and second largest in the U.S.

Completed majority of expansion projects under our $400 million construction program, which contributed

around 8.5 million barrels of incremental storage capacity

Source:  Company Websites & Management Presentations

12

$68

$86

$102

$154

$214

$221

$319

2002

2003

2004

2005

2006

2007

2008

Distributable Cash Flow ($ in Millions)

EBITDA ($ in Millions)

Record Growth Every Year,                                  

Has Translated Into…

13

$77

$112

$133

$219

$322

$353

$492

2002

2003

2004

2005

2006

2007

2008

2008

was

a

record

year

financially

primarily

due

to

contribution

from

asphalt

operations

and

growth

projects

Despite challenging conditions in the first quarter of 2009, earnings were better than expected and beat

analyst estimates

Reported clean first quarter 2009 earnings of $0.47 per unit versus $0.35 per unit consensus estimate

NuStar is well-positioned for another record year in 2009

Higher results from all three of our business segments (i.e. Transportation, Storage and Asphalt and Fuels Marketing)

should drive record results

Note:

2005

and

2006

distributable

cash

flow

and

EBITDA

are

from

continuing

operations

…Consistent Distribution Growth While Maintaining a             

Solid Distribution Coverage Ratio

$4.085

$3.835

$3.60

$3.365

$3.20

$2.95

$2.75

$2.40

2001

2002

2003

2004

2005

2006

2007

2008

NS Annual Distribution Since IPO

*

*     Based on NS annualized distribution of $0.60 per unit in 2001

**  Based on NSH annualized distribution of $0.32 per unit in 2006

NSH Annual Distribution Since IPO

$1.28

$1.38

$1.58

2006

2007

2008

**

14

~8.0% CAGR

~11% CAGR

NS Distribution Coverage Applicable to LPs

NS declared a 1Q09 distribution of $1.0575, which was

7.4% higher compared to the 1Q08 distribution and

unchanged from 4Q08

NSH declared a 1Q09 distribution of $0.43, which was

19.4% higher compared to the 1Q08 distribution and

unchanged from 4Q08

Targeting distribution increases at NS and NSH in 2009 –

increases dependent on NuStar Energy L.P.’s performance,

growth opportunities and global economic, financial and

capital market conditions

1.20x

1.25x

1.28x

1.30x

1.19x

1.16x

1.10x

1.33

2001

2002

2003

2004

2005

2006

2007

2008

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

5/13/08

7/12/08

9/11/08

11/11/08

1/11/09

3/13/09

5/13/09

NuStar Companies Beating Peers                                 

and Market Indices

NS 8%

S&P 500 (34)%

Alerian MLP Index (21)%     

NSH Peers (16)%

NSH (6)%

Total Return -

Last Twelve Months (LTM)

Despite

the

market

turmoil,

both

NuStar

companies

have

weathered

the

storm

well,

significantly

beating

their respective peer groups and market indices

Outperformance suggests bullish view on asphalt business, solid 2009 outlook and defensive nature of

business

Source:  Barclay’s Capital

15

Note:  NSH GP Peers Total Return Index is weighted on market capitalization of each company and includes the following companies: AHD, AHGP, BGH, EPE,  

ETE, HPGP,  MGG, and NRGP. 

The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships

2009 Outlook

17

2009 Outlook –

Transportation Segment

A tariff increase of around 7.6% effective July 1, 2009

should contribute higher operating income in 2009

over 2008

Tariff increase represents the highest increase since

indexation began in 1993

Over 90% of NuStar’s pipeline should receive the tariff

increase

New pipeline business, an anticipated reduced refinery

maintenance schedule and a new pipeline project

expected to start-up in July should help mitigate the

impact of weaker throughput volumes from lower

demand

NuStar is more insulated from weaker demand compared

to other refined product pipelines

Benefit from market areas that are more

agricultural versus population center based

NuStar’s 2008 Pipeline Receipts by Commodity

Other*

68%

Gasoline

32%

* Other includes crude oil, fuel oil, ammonia, jet fuel,

propane, naphtha and light refined product ends

18

2009 Outlook –

Storage Segment

Storage segment should also see better results in

2009 as we benefit from a full year’s contribution

primarily from completed projects under our $400

million construction program

Expect to benefit from contango markets to the

extent that certain of our storage contract revenues

are up for renewal:

Contract renewals:

29%

-

1

Year

or

Less

28%

-

1

to

3

Years

23%

-

3

to

5

Years

19%

-

Greater

than

5

Years

Lower throughputs in our storage segment don’t

necessarily translate into weaker earnings since the

majority of our business is contracted

Approximately 90% of our revenues in the storage

segment come from leased assets or assets

connected to pipelines in our transportation segment

St.

Eustatius

Terminal

–

14.0

mm

bbls

storage

capacity

Texas

City,

TX

Terminal

–

2.7

mm

bbls

storage

capacity

19

2009 Outlook –

Asphalt Operations

Expect even more favorable supply and demand

fundamentals in 2009 to drive better results in

the asphalt operations

Expect a higher margin per barrel and slightly

higher sales volumes assuming the impact from

the stimulus package kicks in by late 2009

Continue to target a 50 percent holdback of cash

flows from the asphalt business

Currently receiving full contract volumes of

Venezuelan crude oil and have received no

indication of further cuts

Asphalt Fundamentals

-5.0

5.0

15.0

25.0

35.0

45.0

55.0

 2004

  2005

  2006

  2007

  2008

Imports

Exports

Net Imports

Despite

lower

asphalt

demand,

a

combination

of

higher

crude

oil

prices

and

tight

asphalt

supply

resulted

in

historic

asphalt

prices

and

margins

in

2008

New

Jersey

asphalt

prices

climbed

from

around

$350

per

short

ton

at

the

start

of

the

season

to

around

$800

per

short

ton during the peak asphalt season

Lack

of

asphalt

imports

was

one

of

the

main

contributing

factors

as

to

why

asphalt

supply

was

tight

in

2008

Venezuela

has

not

exported

any

asphalt

to

the

U.S.

since

January

2008

U.S.

asphalt

inventories

at

the

end

of

February

2009

were

over

14%

lower

than

the

five-year

average

setting

up

for

tight

supply

during

the

2009

asphalt

season

U.S. Asphalt Inventories (000 barrels)

Source

of

data

for

graphs:

New

Jersey

Department

of

Transportation

and

U.S.

Energy

Information

Administration

Tight Asphalt Fundamentals in 2008 Bode

Well

for

2009

21

U.S. Asphalt Imports/Exports (mbpd)

10,000

20,000

30,000

40,000

50,000

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

2006

2007

2008

2009

5-Year Avg.

One

of

the

driving

factors

for

tighter

asphalt

supply

in

2009

should

be

continuing

low

U.S.

refinery

utilization

rates

as

a

result

of

a

weak

economy

and

resulting

lower

refining

margins

Continue

to

expect

lack

of

asphalt

imports

to

also

be

a

contributing

factor

to

tighter

supply

in

2009

While

a

lower

GDP

forecast

is

expected

to

soften

asphalt

demand,

stimulus

spending

and

lower

crude

oil

and

product

prices

should

help

mitigate

the

impact

An

improving

economy

should

result

in

increased

asphalt

demand

Foreign

stimulus

efforts

also

expected

to

support

global

asphalt demand

Expect

to

see

the

asphalt

rack

price

respond

to

the

tight

supply/demand

balance

as

weather

improves

and

we

get

further

into

the

asphalt

season

Source

of

data

for

graphs:

U.S.

Energy

Information

Administration

and

New

Jersey

Department

of

Transportation

Expect Low U.S. Refinery Utilization Rates to Tighten 

Asphalt Markets Even More in 2009 and Beyond

22

NJ Asphalt Cement Price Index                

($ per short ton)

U.S. Refinery Utilization Rate vs. U.S. Asphalt Production

$100

$200

$300

$400

$500

$600

$700

$800

$900

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2006

2007

2008

2009

5-Year Avg.

75.0%

80.0%

85.0%

90.0%

95.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

250

300

350

400

450

500

550

Refinery Utilization (%)

Asphalt Production (MBPD)

Lower Availability of Heavier, Sour Crudes Expected

to Drive Less Asphalt Production Near-Term

23

Comparative Crude Oil Prices ($ per barrel)

Spread b/w WTI and

Venezuelan crudes 

currently around $5 to

$10 per barrel. 

Differentials between light, sweet and heavy, sour crudes have recently narrowed primarily due to

cuts of heavier, sour barrels and WTI price weakness

NuStar is still seeing good discounts for the Venezuela crudes that are being purchased

Near-term, lower availability of heavier, sour crudes expected to result in less bottoms being

produced, including asphalt

While we expect differentials to remain narrow in the near-term, should see the differentials widen as

the economy and demand for refined products improve

WTI *

Mexican Maya *

BCF-13 **

Boscan **

* Source: Platts

** Source:  Company

$10.00

$30.00

$50.00

$70.00

$90.00

$110.00

$130.00

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Announced U.S. Coker Projects:

Longer Term Asphalt Story                

Continues to be Bullish

Source:  PIRA Refinery Database; Company Information

24

Continue to expect coker projects will tighten asphalt supply despite some projects delays/cancellations

85% of the announced coker projects listed are either complete or have a high likelihood of completion (i.e. firm projects -

expansions that are expected to have a very high likelihood of occurring)

Combination of low refinery utilization rates, improving economy, lack of imports and coker projects coming on-

line should result in tighter asphalt markets and better-than-historic asphalt prices and margins over the next

several years

No.

Refinery

PADD

Announced Coker

Capacity (Mbpd)

Announced

Crude Capacity

(Mbpd)

Start Up

Date

Status

1

Coffeyville Resources - Coffeyville, Kansas

II

2.0

8.0

1Q 2007

Complete

2

BP - Toledo, Ohio

II

2.0

10.0

1Q 2007

Complete

3

Valero - Port Arthur, Texas

III

25.0

75.0

1Q 2007

Complete

4

Frontier - Cheyenne, Wyoming

IV

4.3

-

3Q 2007

Complete

5

Chevron - El Segundo, California

V

15.0

-

4Q 2007

Complete

6

Sinclair – Sinclair, Wyoming

IV

20.0

11.0

4Q 2007

Complete

7

ConocoPhillips - Borger, Texas

III

25.0

-

4Q 2007

Complete

8

Cenex - Laurel, Montana

IV

15.0

-

1Q 2008

Complete

9

Frontier - El Dorado, Kansas

II

3.0

11.0

2Q 2008

Complete

10

Tesoro - Martinez, California

V

4.4

-

2Q 2008

Complete

11

ConocoPhillips - Los Angeles, California

V

5.0

-

4Q 2008

Firm

12

Marathon - Garyville, Louisiana

III

44.0

180.0

4Q 2009

Firm

13

Valero - St. Charles, Lousiana

III

10.0

45.0

1Q 2010

Firm

14

Hunt - Tuscaloosa, Alabama

III

18.5

15.0

3Q 2010

Firm

15

ConocoPhillips - Wood River, Illinois

II

65.0

55.0

1Q 2011

Firm

16

Atofina Petrochemicals Inc.- Port Arthur, Texas

III

50.0

-

1Q 2011

Firm

17

BP/Husky - Toledo, Ohio

II

25.0

-

1Q 2011

Firm

18

Pasadena Refining System - Pasadena, Texas

III

29.0

100.0

2Q 2011

Probable

19

BP - Whiting, Indiana

II

95.0

30.0

1Q 2012

Firm

20

Motiva - Port Arthur, Texas

III

40.0

325.0

1Q 2012

Firm

21

ConocoPhillips - Borger, Texas

III

20.0

34.0

2Q 2012

Probable

22

Marathon - Detroit, Michigan

II

28.0

13.0

2Q 2012

Probable

Total US Expansion

545.2

912.0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Status of U.S. Highway Funding

Stimulus Package Expected to Benefit Asphalt Demand

25

*

Source:

Proposed

funding

based

on

media

reports

and

internal

estimates

Actual and Proposed Federal Highway Funding ($ in billions)*

$37.1

$38.1

$40.4

$41.8

$49.3

Stimulus Funds

SAFETEA-LU

$66.6

$70.8

$75.0

$77.0

$78.0

New

SAFETEA-LU

funding

for

FY2010-2014

estimated

at

$300-500

Billion,

a

75%

increase

over

the

current

bill*

Congress

already

considering

reauthorization

of

funding

in

early

2009

Funding

options

include

federal

gas

tax

increase,

indexing

user

fees

for

inflation

adjustment,

bonds

and

tolls

The

American

Recovery

and

Revitalization

Act

provides

$29

billion

for

transportation

infrastructure

investments

Expect

approximately

85

percent

of

the

$29

billion

of

funding

to

go

towards

asphalt

with

the

remainder

to

concrete

50%

of

the

allocated

for

highway

spending

must

be

obligated

to

projects

within

120

days

of

enactment

otherwise

those

funds

will

be

sent

back

to

the

government

for

redistribution

More

than

25%

of

the

$29

billion

is

expected

to

be

allocated

to

markets

that

NuStar

serves

Should

start

seeing

impact

from

stimulus

funds

in

the

third

quarter

of

2009,

which

will

result

in

slightly

higher

asphalt

demand

2009

versus

2008

Over

the

life

of

the

stimulus

package,

asphalt

demand

is

expected

to

increase

by

more

than

10

percent

between

2009

and

2011

over

2008

levels

Financial Overview

Current Revolver Availability

Rate on revolver based on LIBOR plus 50 bps,

currently just under 1%

Financial Covenant Tests:

Debt-to-EBITDA cannot exceed 5.0 to 1.0 times

Following an acquisition of $100 million or

more, NuStar may increase Debt-to-EBITDA to

5.5 times for two consecutive quarters

Capital Access / Key Debt Terms &

Covenants

27

Do not anticipate need to access capital markets to

fund current operations, distributions and capital

requirements in 2009

Expect to use cash flows from operations and $1.2

billion revolver for financing purposes

Plan to access equity only for accretive acquisitions

Will continue to de-lever throughout the year and

are targeting a lower Debt-to-EBITDA by the end of

2009

3.99 times at the end of December 31, 2008

NuStar’s Investment Grade Rating important during

these uncertain times

NuStar is one of only ten or so MLPs that have an

investment grade rating –

important for efficient

access to capital markets

Fitch revised its outlook to stable from negative on

February 20, 2009

Will continue to work with other rating agencies to

have negative outlook removed

Total Bank Credit

$1,221

Less:

Borrowings

(755)

Letters of Credit

(58)

Revolver Liquidity

$408

Standard & Poor’s: BBB-

(Negative Outlook)

Moody’s: Baa3 (Negative Outlook)

Fitch: BBB-

(Stable Outlook)

Credit Summary

(Dollars in Millions)

$1.2 billion Credit Facility

$590.3

NuStar Logistics Notes (7.65%)

349.4

NuStar Logistics Notes (6.875%)

104.5

NuStar Logistics Notes (6.05%)

239.0

Kaneb Ops. Notes (5.875%)

258.5

Kaneb Ops. Notes (7.75%)

271.0

Other Debt

111.5

Total Debt

$1,924.2

Total Partners’

Equity

2,174.5

Total Capitalization

$4,098.7

(Dollars in Millions)

No

Significant

Debt

Maturities

Until

2012

2009

$0.7

2010

$0.8

2011

$0.8

2012

$971*

2013

$481

2014

$0.6

*  Primarily includes maturity of $590 million revolver

balance and $350 million of senior notes

Capital Structure (3/31/09)

Long-Term Debt Maturities (3/31/09)

28

No significant debt maturities until 2012 at which time the revolver and some of the senior

notes become due

2007

2008

2009

Reliability

Strategic/Other

29

Flexible Capital Growth Program

NuStar has no major project commitments in 2009 and has a flexible capital growth program

Continue

to

conservatively

target

around

$80

million

of

strategic

growth

capital

spending

for

2009

in

light

of

challenging

economic

and

capital

market

conditions

There

are

no

shortage

of

growth

opportunities

and

can

quickly

ratchet

back

up

capital

program

when

conditions

improve

Major

2009

strategic

projects

include:

Approximately

$20

million

of

pipeline

projects

on

NuStar’s

East

pipeline,

ammonia

pipeline

and

at

our

St.

James,

LA

facility

to

increase

the

capacity

and

flexibility

of

our

two

pipelines

and

to

accommodate

new

and

existing

customers

Approximately

$10

million

to

finish

up

tank

expansion

projects

at

NuStar’s

Texas

City,

TX

and

Amsterdam

facilities

as

part

of

our

$400

million

construction

program

Approximately

$30

million

at

our

Texas

City,

TX

facility

to

improve

and

upgrade

it

to

make

a

world-class

terminal

Approximately

$14.5

million

at

our

Paulsboro,

NJ

and

Savannah,

GA

asphalt

facilities

to

improve

crude

flexibility

and

rates,

improve

the

energy

efficiency

of

the

refineries

and

increase

the

production

of

polymer

modified

asphalt

(Dollars in Millions)

$251

$211

$40

$202

$56

$146

$145 -

$150

~$80

~$65 -

$70

Total Capital

In-Service Dates

Major Projects

Investment

1Q08

2Q08

3Q08

4Q08

2009

Major Projects Completed in Late 2006 & 2007

$92.0

Amsterdam Expansion –

Partial P1

37.8

St. Eustatius Expansion –

P3

20.2

Texas City, TX Expansion

21.1

St. James, LA Expansion

25.6

Linden, NJ Pipeline Expansion

7.7

Jacksonville, FL Expansion

20.5

Amsterdam Expansion –

Partial P1         

37.8

Amsterdam Expansion –

Option 1

5.3

St. James, LA Expansion

26.5

Amsterdam Expansion –

Option 2

29.2

Texas City, TX Expansion   

13.5

Asphalt/Heavy Fuel Oil Projects

35.0

Storage and Pipeline Projects

46.0

Total                                    

~$415

(Dollars in Millions)

P = Phase

Track record of completing large internal growth projects on-time and on-budget

Targeting around $80 million of internal growth projects in 2009

Plenty of opportunities to grow the business with substantial amount of new internal growth

project ideas and acquisition targets over the next few years

Growth opportunities primarily focused on storage expansions

Completed

Completed

Completed

Completed

Completed

Completed

Completed

Completed

$400 million Construction Program Nearly Complete –

Should Provide Solid Contribution to 2009 Results

Completed

Completed

Completed

30

One of the largest independent petroleum pipeline and terminal liquids operators in the world

Provides world class pipeline and terminalling services to some of the world’s largest crude oil

producers, integrated oil companies, chemical companies, oil traders and refineries

Pipeline and storage businesses somewhat recession proof

One of the largest asphalt refiners and marketers in the U.S.

Expect to benefit from better-than-historic asphalt margins as supply continues to tighten

Proposed economic stimulus package expected to provide further growth in U.S. asphalt demand

Large and diversified asset footprint in the U.S. and internationally allows for ample acquisition

and internal growth opportunities

Despite lower expected strategic capital for 2009, continue to have plenty of opportunities to grow the

business over the next few years

One of a few partnerships to have a large international presence

One of only a few partnerships with incentive distribution rights capped at 25%

Lower cost of capital provides NuStar Energy L.P. a competitive advantage

Investment grade rating and demonstrated access to capital in difficult markets

Fitch recently revised its outlook to stable from negative

Will continue to work with other rating agencies to have negative outlook removed

Experienced management team with substantial equity ownership

Higher earnings expected in 2009 despite weak global economic outlook

Investment Highlights

31

Questions & Answers

Appendix

33

Steve Blank –

Senior VP, CFO & Treasurer

Steve

Blank

is

Senior

Vice

President,

Chief

Financial

Officer

and

Treasurer

of

NuStar

Energy

L.P.

and

NuStar

GP

Holdings,

LLC.

In

this

position,

he

is

responsible

for

corporate

finance,

external

reporting,

accounting,

budgeting

and

forecasting,

investor

relations,

risk

management,

tax,

treasury

and

credit.

Blank

was

previously

Vice

President-Finance

for

Valero

Energy

Corporation.

In

that

position,

he

was

responsible

for

corporate

finance,

treasury

operations,

and

wholesale

credit.

Prior

to

that,

Blank

held

a

variety

of

positions

with

Ultramar

Diamond

Shamrock

Corporation

(UDS)

in

New

York,

London

and

San

Antonio,

including

Director

of

Planning

and

Development;

Assistant

Treasurer-Corporate

Finance;

Vice

President

of

Investor

Relations;

Vice

President-Information

Technology;

and

Vice

President-Finance

and

Treasurer.

Before

joining

UDS

in

1980,

Blank

worked

for

two

years

with

National

Westminster

Bank

in

New

York.

Blank

was

born

in

Spring

Valley,

NY

in

1954

and

received

a

Bachelor

of

Arts

in

History

from

the

State

University

of

New

York

in

1976.

He

went

on

to

obtain

a

Master’s

degree

in

International

Affairs,

with

a

specialization

in

Business,

from

Columbia

University

in

1978.

Blank

is

the

Treasurer

and

a

member

of

the

Board

of

Directors

of

the

San

Antonio

Botanical

Society.

He

is

also

a

member

of

the

Board

of

Directors

of

the

McNay

Art

Museum

in

San

Antonio. 

Management Bio

35

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.

(Dollars in Thousands)

Reconciliation of Net Income to EBITDA to

Distributable Cash Flow

Note:

2005

and

2006

distributable

cash

flow

and

EBITDA

are

from

continuing

operations

2008

2007

2006

2005

2004

2003

2002

Income from continuing operations

254,018

$        

150,298

$        

149,906

$        

107,675

$        

78,418

$          

69,593

$          

55,143

$          

Plus interest expense, net

90,818

76,516

66,266

41,388

20,950

15,860

4,880

Plus income tax expense

11,006

11,448

5,861

4,713

-

-

395

Plus depreciation and amortization expense

135,709

114,293

100,266

64,895

33,149

26,267

16,440

EBITDA from continuing operations

491,551

352,555

322,299

218,671

132,517

111,720

76,858

Less equity earnings from joint ventures

8,030

6,833

5,882

2,319

1,344

2,416

3,188

Less interest expense, net

90,818

76,516

66,266

41,388

20,950

15,860

4,880

Less reliability capital expenditures

55,669

40,337

35,803

23,707

9,701

10,353

3,943

Less income tax expense

11,006

11,448

5,861

4,713

-

-

-

Plus mark-to-market impact on hedge transactions

(9,784)

3,131

-

-

-

-

-

Plus charges reimbursed by general partner

-

-

575

-

-

-

-

Plus distributions from joint ventures

2,835

544

5,141

4,657

1,373

2,803

3,590

Plus other non-cash items

-

-

-

2,672

-

-

-

Distributable cash flow from continuing operations

319,079

$        

221,096

$        

214,203

$        

153,873

$        

101,895

$        

85,894

$          

68,437

$          

Year Ended December 31,

36

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.

2008 Debt-to-EBITDA Reconciliation

Year Ended

December 31, 2008

Net income

254,018

$                             

  Plus interest expense, net

90,818

  Plus income tax expense

11,006

  Plus depreciation and amortization expense

135,709

EBITDA

491,551

  Less equity earnings from joint ventures

(8,030)

  Less other income, net

(37,739)

  Less mark-to-market impact on all derivative transactions

(9,781)

  Plus distributions from joint ventures

2,835

  Other adjustments allowed under debt agreements

36,492

Adjusted EBITDA per debt agreements

475,328

$                             

Total Consolidated Debt at December 31, 2008

1,894,848

$                          

Debt Coverage Ratio (not greater than 5.0x)

3.986x

(Unaudited, Thousands of

Dollars, Except Ratio)

The following is a reconciliation of net income to EBITDA and Adjusted EBITDA, as defined in our debt

agreements: