NavSight (NSH) 8-K Regulation FD Disclosure

1

NuStar Analyst Day

June 24, 2009

Philadelphia, PA and Paulsboro, NJ

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

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

subsequent

quarterly

reports

as

filed

with

the

Securities

and

Exchange Commission.

Forward Looking Statements

2

Agenda

Topic

Presenter*

Page Number

Opening Remarks (10 minutes)

Curt Anastasio

4

Financial Overview (10 minutes)

Steve Blank

16

Operational Overview (5 minutes)

Rick Bluntzer

25

Asphalt  & Fuels Marketing (40 minutes)

Asphalt Supply & Demand Fundamentals

Steve Hays

31

Impact on Asphalt Supply from Coker 

Steve Hays                

36                         

Expansions and U.S. Refinery Outlook

Impact on Asphalt Demand from U.S.    

Mike Stone

41                         

Highway Funding and Stimulus Package

Warm-Mix Asphalt Overview

Ron Corun

48

Fuels Marketing

Paul Brattlof

53

Asphalt Refining & Plant Overviews

Mike Pesch

57

Transportation (10 minutes)

Danny Oliver

69

Storage (10 minutes)

Danny Oliver

82

Closing Remarks

Curt Anastasio

89

Q&A (30 minutes)

Break/Board Buses for Paulsboro Asphalt Tour

*  Bios

of

management

team

can

be

found

in

the

appendix

starting

on

page

92

3

NuStar Overview

Curt Anastasio

CEO & President

4

Expect 2009 to be another record year primarily due to the contribution from internal growth projects and

asphalt operations

Every year has been a record year since the IPO in terms of EBITDA, net income and distributable cash flows

Expansion

into

the

asphalt

business

in

2008

was

the

right

business

at

the

right

time

–

“The

Golden

Age

of

Asphalt”

Single largest contributor to earnings in 2008

Our current outlook for the asphalt business through 2013 is even more bullish than we expected due to tight

asphalt markets

Completion of the majority of the $400 million construction program on-time and on-budget also expected to benefit

2009 results

NuStar

continues to excel in safety and environmental performance and has received numerous awards

Tremendous strides have been made in becoming one of the best companies to work for in America

Fortune 100 Best Companies to Work For –

No. 44

Best Large Company to Work for in Texas –

No. 1

Best Large Company to Work for in San Antonio –

No. 1 (2008) and No. 2 (2009)

NuStar

has

a

solid

balance

sheet,

investment

grade

credit

rating

and

is

emphasizing

financial

discipline

in

a

period of weak economic times, however….

…We continue to evaluate a significant amount of internal growth opportunities and acquisitions for the next

several years focused on all three of our business segments (i.e. transportation, storage and asphalt &

fuels marketing)

Expect 2009 to be Another Record Year –

Asphalt Acquisition the Right Business at the Right Time

…The Best Is Yet To Come

5

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

6

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 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

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.

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.

Unitholders

should benefit from potentially higher

growth in distributions from ownership of incentive

distribution rights

NuStar

Overview –

Two Publicly Traded Companies

NS

NSH

IPO Date:

4/16/2001

7/19/2006

Unit Price (6/18/09):

$51.84

$22.87

Annual Distribution/Unit:

$4.23

$1.72

Yield (6/18/09):

8.16%

7.52%

Market Equity Capitalization:

$2,823 million

$973 million

Enterprise Value:

$4,747 million

$975 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

7

83.2%

Membership Interest

79.6%

L.P. Interest

16.8%

Membership Interest

2.0% G.P. Interest

18.4% L.P. Interest

Incentive Distribution Rights

William E. Greehey

7,138,920 NSH Units

NYSE:  NSH

NYSE: NS

Asset Stats:

Operations in eight different

countries including the U.S., Mexico,

Netherlands, Netherlands Antilles

(i.e. Caribbean), England, Ireland,

Scotland and Canada

8,407 miles of crude oil and refined

product pipelines

82 terminal facilities and four crude

oil storage tank facilities

Nearly 91 million barrels of storage

capacity

2 asphalt refineries capable of

processing 104,000 bpd of crude oil

Large and Diverse Geographic Footprint with

Assets in Key Locations

8

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

resulted

from

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

9

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

$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…

10

$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

adjusted

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

due

to

higher

results

from

all

three

of

our

business segments:  Transportation, Storage and Asphalt and Fuels Marketing

Expect record second quarter 2009 earnings

Note:

2005

and

2006

distributable

cash

flow

and

EBITDA

are

from

continuing

operations

*  Please refer to the NuStar

Energy L.P. first quarter 2009 earnings release for the reconciliation to GAAP earnings

$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

**

11

~8.0% CAGR

~11% CAGR

NS Distribution Coverage Applicable to LPs

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

…Consistent Distribution Growth While

Maintaining a Solid Distribution Coverage

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

6/18/08

8/17/08

10/17/08

12/17/08

2/16/09

4/18/09

6/18/09

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 Wall Street’s bullish view on asphalt business, solid 2009 outlook and defensive

nature of business

Source:  Barclay’s Capital

12

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

NuStar

Companies Outperforming During

Difficult Economic Times

NS 18%

S&P 500 (30)%

Alerian

MLP Index (18)%     

NSH Peers (13)%

NSH 1%

Growth Strategies –

Transportation & Storag

BUILD

:

Evaluate domestic and international

grass-roots pipeline and storage

opportunities, including joint-ventures,

in new market areas

OPTIMIZE:

Optimize NuStar’s

existing pipeline

and terminal assets

Maximize asset utilization

Evaluate low performance pipeline

systems and terminals for divestiture

Evaluate expansion of NuStar’s

logistics network with wholesale and

exchange opportunities

Evaluate asset swap opportunity with

other companies

BUY:

Evaluate purchase of domestic and

international third party storage

assets, including joint-ventures, in

growth markets

Focus on the best locations for

terminal storage within a region

Look for projects with immediate cash

flow opportunities

13

e 

Growth Strategies –

Asphalt

NuStar’s goal is to continue to expand its asphalt business

through production and logistics opportunities

Acquisition of CITGO Asphalt Refining Company in 2008 gave

NuStar a strong position on the East Coast

Market forces continue to point to strong outlook for asphalt

business for the foreseeable future

Expand production capabilities into other U.S. asphalt

markets beyond the East Coast

Effective April 1, 2009, NuStar entered a marketing agreement

with BTB Refining, LLC

to sell the refinery's asphalt production

over the rack

at Corpus Christi, Texas –

Expect incremental $4

to $5 million operating income contribution annually

Expand asphalt facilities to extend supply and reduce costs

Increase production of higher value Polymer Modified Asphalt

Increase rack asphalt sales by acquiring/leasing new terminals

or negotiating new leases on existing terminals

Successfully entered into leases for three of SemGroup’s asphalt terminals located in New Jersey, Virginia and

Texas –

Plan to see incremental rack sales volumes of 1 to 1.2 million barrels and incremental operating income

of $3 to $4 million annually

Implement energy efficiency projects

Implement projects and programs to reduce seasonality of operations

Increase market share of warm-mix asphalt

Evaluate optional markets for winter asphalt production

14

Optimize Financial

Position

Continue to Grow

Distribution at NS

and NSH

NuStar’s

Strategies for Maximizing

Unitholder

Value

Margin-Related Business

Maintain proportion of operating

income from fee-based to margin-

based businesses

~70% to 75% Fee-Based

~25% to 30% Margin-Based

Reduce seasonality of asphalt

operations

Continue to maintain a higher

coverage ratio (2:1 ratio) on

asphalt cash flows

Acquisitions

Promote Training

Provide Employee

Recognition

Internal Growth

Manage Margin-

Related Businesses

Continue To        

Strengthen         

Corporate Culture

Community

Involvement

Create World Class

Environment

Operational

Excellence

15

Capital Discipline

and Project

Execution

Maintain Investment

Grade Rating &

Eliminate Negative

Outlook

Financial Overview

Steve Blank

Senior VP -

CFO & Treasurer

16

Prudently Managed Capital Structure

$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)

NS Capital Structure (3/31/09)

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 capital markets only for acquisitions

and internal growth projects beyond the $95 million

targeted for 2009

NuStar’s Investment Grade Credit Rating important

during these uncertain times

NuStar is one of 13 MLPs out of around 80 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

Standard & Poor’s: BBB-

(Negative Outlook)

Moody’s: Baa3 (Negative Outlook)

Fitch: BBB-

(Stable Outlook)

Credit Summary

17

Maintaining Sufficient Liquidity                 

with Disciplined Financial Strategy

NS Current Revolver Availability

Rates on NS and NSH revolvers based on LIBOR plus 50 bps, currently just under 1%

Currently renegotiating NSH revolver, which expires July 19, 2009

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

Total Bank Credit

$1,223

Less:

Borrowings

(742)

Letters of Credit

(69)

Revolver Liquidity

$412

(Dollars in Millions)

NSH Current Revolver Availability

Total Bank Credit                 $20

Less:

Borrowings

(6.5)

Letters of Credit                   -

Revolver Liquidity              $13.5

(Dollars in Millions)

2009

$0.7

2010

$0.8

2011

$0.8

2012

$971*

2013

$481

2014

$0.6

*  Primarily includes maturity of revolver, which expires

December 2012, and $350 million of senior notes

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

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

2009

2010            

2011            

2012

2013

2014

**  3-year revolving credit facility expires on

July 19, 2009

18

$6.5**

$-

$-

$-

$-

$-

19

Continue to Target Holdback of Cash Flows

from Asphalt Operations

In 2008, NuStar

Energy L.P. held back 100% of

the cash flows, with and without the hedging

loss, from the asphalt operations to pay down

debt

All of the 2008 distribution payment was funded

with cash flows from non-asphalt operations

Assumed a 1.07 times distribution coverage on

the non-asphalt operations

100% holdback of cash flows from the

asphalt operations allowed NuStar

Energy

L.P. to have a higher than expected

distribution coverage ratio for 2008, or 1.33

times

Continue to target 50%, or higher, holdback

of cash flows from asphalt operations in

2009

Asphalt Operations

Non-Asphalt Operations

Total

$47,532

$271,547

$319,079

-

(253,782)

(252,822)

$47,532

$17,765

$66,257

N/A

1.07x

1.26x

100%

2008 -

With $61 million Hedging Loss

Asphalt Operations

Non-Asphalt Operations

Total

$108,236

$271,547

$379,783

-

(253,782)

(252,822)

$108,236

$17,765

$126,961

N/A

1.07x

1.50x

100%

2008 -

Without $61 million Hedging Loss

Distributable Cash Flow

Including Hedging Loss

Distribution

Excess (Shortfall)

Coverage

Holdback

Distributable Cash Flow

Excluding Hedging Loss

Distribution

Excess (Shortfall)

Coverage

Holdback

Expect Improved Credit Metrics in 2009

20

Marked improvement in debt metrics since the CITGO Asphalt Refining Acquisition in March 2008, both

with and without the $61 million hedging loss incurred in 2Q08

Currently there are no hedges in place for asphalt operations and do not anticipate any hedging activity going forward

First quarter 2009 Debt-to-EBITDA was higher at 4.3x primarily due to the seasonality of the asphalt

operations, but well below revolver financial covenant of less than 5.0 times

Communicated to the rating agencies we are targeting a Debt-to-EBITDA ratio of 3.5 to 4.0 times for 2009

Debt-to-EBITDA & Debt-to-Capitalization Ratios

Adjusted for April 2008

Equity Offering and

Acquisition Related

Adjustments

Adjusted for $61 million

hedging loss

4.6x

4.9x

3.9x

4.0x

4.3x

4.4x

4.1x

3.4x

3.4x

3.7x

52.5%

49.9%

47.5%

46.2%

46.9%

3

3.5

4

4.5

5

1Q08

2Q08

3Q08    

4Q08    

1Q09  

40.0%

50.0%

60.0%

21

2009 Forecast Capital Spending

Now targeting around $95 million of strategic growth capital spending for 2009

Additional $10 million primarily related to new scope of Texas City terminal project

Major strategic projects include:

Approximately

$23

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

$13

million

to

finish

up

tank

expansion

projects

at

NuStar’s

Texas

City,

TX

as

part

of

our

$400

million

construction program

Approximately $25 million at our Texas City , TX facility to improve and upgrade it to make it a world class heavy oil

terminal

Approximately $12 million at our Paulsboro and Savannah asphalt facilities to improve crude flexibility and rates,

improve

the

energy

efficiency

of

the

refineries

and

increase

the

production

of

polymer

modified

and

warm-mix

asphalt

Expected to provide around $11 of incremental operating income in 2009, $30 million of incremental

operating

income

in

2010

and

$1

million

of

incremental

operating

income

in

2011

(Dollars in Millions)

Reliability

Other

Strategic

Total

Forecast by Segment

Transportation

11,372

-

16,157

27,529

Storage

40,097

-

66,536

106,633

Corporate - IS

7,910

1,607

900

10,417

Refining & Marketing

11,483

-

10,823

22,306

     Total Forecast

70,862

$          

1,607

$            

94,416

$          

166,885

$        

2009 Forecast

Significant Long-Term Acquisition and

Internal Growth Opportunities

Acquisition Criteria

Accretive to distributable cash flows

Strong internal growth potential

Synergistic with existing operations (i.e. ties in with

strategy)

22

Storage –

Continue to evaluate domestic and

international storage opportunities in strategic hub

locations

Amsterdam/Rotterdam/Antwerp

–

Evaluating

opportunities to acquire storage facilities to

meeting growing demand

Asphalt

–

Continue

to

evaluate

production

and

logistics opportunities to expand markets

Acquisitions

Internal Growth

Storage:

Black

Oil

Strategy

–

Continue

to

implement

strategy

of

building

crude oil and heavy fuel oil storage at Texas City, TX and St.

James, LA facilities

St.

Eustatius

–

Evaluating

opportunities

to

expand

or

acquire

nearby terminals to increase presence in the Caribbean market

Amsterdam/Rotterdam/Antwerp

–

Evaluating

opportunities

to

build storage facilities to meeting growing demand

United

Kingdom

–

Build-out

existing

terminals

Pipelines:

Ammonia

Pipeline

–

Evaluating

additional

pipeline

laterals

to

industrial end users

Central/South

Texas

–

Evaluating

opportunities

to

increase

utilization of assets to meet demand in these growing markets

Asphalt:

Additional projects to address crude flexibility, improve quality of

light products, produce roofing flux and blend crude to optimize

operations

Evaluating around $500 million of acquisition and internal growth opportunities over the next few years

Project Development & Execution

Process (PDEP)

Concept

Phase

Opportunity

Definition

Phase I

Opportunity

Evaluation &

Selection

Phase II

Lead Case

Development

Phase III

Refinement

Phase IV

Execution

Phase V

Start-Up &

Evaluation

Phase Objectives

•

Identify

Opportunities

or Problems

Gate Decisions

•

Develop

Alternatives

•

Select Lead

Case

•

Define the

Project

•

Develop

Business Case

•

Refine the

Project

•

Finalize Project

Economics

•

Construct the

Project

•

Start-Up

•

Evaluate

Performance

1

Pursue

Opportunity?

Process is intended to help the company build a competitive advantage in the industry by assuming

control

of

the

selection,

development,

execution,

and

control

of

projects,

and

aligning

these

projects

to the company's strategic objectives and goals

Use point system to rank and prioritize all major projects, taking into account:

Project returns

Project risk (capital cost, operating cost and margin volatility)

Project size and timing

2

Pursue             

Lead Case?

3

Authorize   

Engineering?

4

Authorize  

Construction?

5

Ready to   

Operate?

23

44.5%

36.6%

27.2%

24.8%

21.5%

18.8%

16.9%

14.5%

12.5%

11.5%

5.9%

3.7%

KMP

ETP

SXL

PAA

BPL

OKS

TPP

EPD

NS

EEP

BWP

RGNC

Peer Average = 18.3%

Source:  Barclays Capital

NuStar

Energy

L.P.

has

one

of

the

lowest

“GP

takes”

in

its

peer

group

Due

to

extraordinary

action

taken

by

NuStar

Energy

L.P.’s

GP

in

March

2004

to

cap

IDRs

at

25%

for

no

financial

consideration

One of only a few publicly traded partnerships to have lower splits

Enhances NuStar Energy L.P.’s ability to retain cash flow for debt retirement, capital investments and

distribution increases that is expected to benefit both NS and NSH unitholders

Significantly lowers cost of capital compared to other partnerships at 50% splits

General Partner’s Take of Distribution*

*  GP% take is based on the annualized most recent quarterly distribution to L.P. unitholders

Elimination of 50% High Splits                  

Provides Cost of Capital Advantage

24

Operational Overview

Rick Bluntzer

Senior VP Operations

25

26

Regional Operations System Map

Centralized along specific disciplines for consistency

Strategic Planning

Corporate Objectives and Policies

HS&E (PSM / Emergency Response / Spill Prevention and Control / Training)

Human Resources / Corporate Communications

Loss Control (Inventory Control / Product Control / Training)

Engineering Standards and Processes (Best Business Practices / Equipment Standards / PDEP)

Transportation Optimization

Financial Accounting and Reporting Policies and Procedures

Decentralized

along

implementation

accountabilities

and

business

stewardship

Operational Excellence

Health Safety and Environmental

Mechanical Reliability

Engineering and Integrity Management

Profit and Loss Administration

Human Resources and Corporate Communications

Inventory Management / Quantity and Quality Loss Control

27

Continuous Improvement in Operations

2009 YTD

2008

NuStar prides itself on a strong safety and environmental commitment

Has received many national safety honors over the last several years with our TRIR and LTIR far better than industry averages

Recently

presented

with

the

Independent

Liquid

Terminal

Association’s

Platinum

Safety

Award

–

The

Highest

Safety

Award

in

the

Terminal

Industry

Adopted

Process

Safety

management

as

our

prime

HS&E

program

Entering

into

OSHA’s

VPP

program

with

goal

of

achieving

“Star”

status

in

our

pipeline

and

refinery

operations

Continuous Improvement –

Health, Safety & Environmental

NuStar Injury Incident Frequency Rates

Employee

TRIR

Employee

LTIR

2005

2006

4.06

TRIR –

Total Recordable Incidents Rate    LTIR –

Lost Time Incidents Rate

1.49

2.24

0.14

2007

1.36

0.19

*  Through  May 2009

0.76

0.16

28

*

0.13

0

No LTIR

Incidents

29

Continuous Improvement -

Mechanical

Reliability                              

$5,686

$16,000

$4,593

$0

$3,412

$15,058

$2,871

$0

$1,478

$2,807

$1,722

$0

$455

$3,208

$1,148

$0

$341

$3,024

$1,148

$7,910

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Pipeline

Terminal

Refining

Corp-IS

Spend Amount in $000

2009 Reliability Capital Spend by Segment and Category

Misc

Energy

Rotating

API 653

IMP

Corp-IS

$7,910

Refining

$11,483

Terminal

$40,097

Pipeline

$11,372

Category Totals

IMP

$26,279

API 653

$21,340

Rotating

$6,008 

Energy 

$4,811  

Misc

$12,423                   

Total 2009 Energy Forecast: $81.5MM

Pipelines:

$23.7MM

($3.6MM under budget)

Terminals:

$18.4MM

($1.5MM under budget)

Refineries:

$39.5MM

($10.8MM under budget)

Real Time Power Optimization

Pipeline SCADA system determines real time lowest cost solution to running pipelines based on:

Power

tariffs,

pipeline

hydraulics

and

pump

curves,

Drag

Reducer

injections,

peak

demand

periods,

and

pipeline

batch

schedules.

Currently live on Houston PL and Wichita Falls Crude PL. Valley PL, El Paso PL, and ATA PL scheduled to be live

by 8/1/2009. Estimated $100K savings in Q1-2009 on Houston PL.

Projected

savings

of

10%

for

each

pipeline

-

$1.0MM

in

2009,

$2.0

-

$3.0MM

annually

2010+

Refinery Initiatives:

Evaluating

several

energy

projects

including

cogen

at

Paulsboro

Boiler efficiency upgrades and insulation projects ongoing at Asphalt Terminals

NG procurement and risk management managed by outside consultants led by internal optimization team

Other Efforts:

Drag

reducer

agent

(DRA)

–

New

contract

negotiations

completed

in

May

reducing

cost

by

$3/gallon.

Projected

annual savings of $450,000 annually.

Third

Party

Utility

Bill

Processing

–

Advantage

IQ

processes

initiated

4/1/09.

Anticipate

$75K

-

$100K

savings.

Also provides captured data to aid in energy reporting and analysis.

Natural

gas

procurement

and

risk

management

–

manage

NG

supply

contracts

and

implement

hedge

strategies

to

mitigate NG price risk.

Load

management/curtailment

programs

–

approximately

~$0.4MM

annual

power

credit

Terminal

energy

audits

-

Evaluate

power

tariffs,

insulation

opportunities,

load

pump

VFDs,

peak

demand

management at largest energy consumption terminals.

Pipeline savings resulting from real-time power optimization, reduced throughputs, and reduced natural gas costs.

Cost

per

bbl

transported

has

dropped

from

just

under

8

cents/bbl

at

the

end

of

2008

to

less

than

6

cents/bbl

today.

30

Continuous Improvement -

Power Optimization                          

Asphalt

–

Supply

&

Demand

Fundamentals

Steve Hays

VP

-

Strategic

Planning

31

32

U.S.

Asphalt

Fundamentals

Point

to              

Continued Tight Supply

2008 Year End :  20.3 mm bbls.

9% below 2007 levels and 11% below the 5-Year average

2009 March:  28.1mm bbls. 

Nearly 2% below March 2008 levels and over 14% below the 5-Year

average

Factors Impacting Inventories:  Less asphalt imports and lower

production due to low U.S. refinery utilization rates, coker

projects

and refiners running more lighter, sweeter crudes and less heavier,

sour crudes

While demand is lower, supply is down even more and is expected to get tighter due to lower production

and imports.  Demand is expected to improve supported by stimulus funds and an improving economy. 

U.S. Asphalt Inventories (000 barrels)

Source:  U.S. Energy Information Administration and Argus

2008 Asphalt Supply/Demand Balance by Region

(thousands of barrels per day)

(0.1)

(1.0)

(2.0)

(1.0)

(1.3)

U.S. Net Short 5.4 mbpd, or 2 mm bbls.

33

Decreasing Asphalt Imports to the U.S. One of

the Reasons for Tight Asphalt Supply

U.S. Asphalt Imports/Exports (mbpd)

2008 U.S. Asphalt Imports by Country

Source:  U.S. Energy Information Administration

Venezuela:  3%

Spain/India:  1%

2000 U.S. Asphalt Imports by Country

Venezuela: 60%

Canada: 24%

Mexico: 11%

Spain: 4%

Netherlands: 2%

2008 Imports:  8.1 mm bbls.,

44% below 2007 levels and 44% below the 5-Year

average

Biggest driver is the lack of imports from Venezuela

2009 YTD Imports:  2.6mm bbls.

Nearly 3% higher than 2008 levels but 19% below the 5-

Year average

Factors Impacting Imports/Exports:  Absence of

Venezuelan asphalt production has opened opportunities

for increased U.S. asphalt exports to the Caribbean and

South American markets

Canada:  96%

34

Declining Utilization Rates Driving Less Asphalt

Production, while Asphalt Demand is Lower

U.S. Asphalt Demand (000 barrels)

2008 :  152.4 mm bbls., or around 418,000 bpd

15% below 2007 levels and 17% below the 5-Year average 

2009 YTD:  25.1mm bbls. 

Nearly 9% below 2008 levels and over 15% below the 5-

Year average

Asphalt demand has been sluggish so far due to poor

weather

conditions

on

the

U.S.

East

Coast

-

Expect

demand

to pick up as weather improves and stimulus projects start

up (i.e. expected in the third quarter of 2009)

Factors Impacting Demand:  Federal highway funds, federal

stimulus funds, economy, state and municipal budgets, private

sector, price of asphalt, weather and seasonality

U.S. Asphalt Production (000 barrels)

2008 :  150.9 mm bbls., or around 413,000 bpd;

Over 9% below 2007 levels and 12% below the 4-Year 

average 

Biggest drop in asphalt production was in the Gulf Coast

(PADD 3) and Rocky Mountain (PADD 4) regions

2009 YTD:  31.8mm bbls. 

Over 5% below 2008 levels and over 14% below the 4-

Year average

Factors Impacting Production: Low U.S. refinery utilization rates,

coker

projects, and refiners running more lighter crudes and less

heavier crudes 

Source:  U.S. Energy Information Administration

35

Expect Comparable Margins in 2009 Despite        

Lower Rack Asphalt Prices

NJ Asphalt Cement Price Index  ($ per short ton)

2008 rack asphalt prices started off the season at

around $350 per short ton, but climbed to record levels

of over $800 per short ton during the peak asphalt

season as a result of tight supply and record crude oil

prices

While 2009 rack asphalt prices  have been trending

lower than 2008 levels due to lower crude oil prices and

sluggish demand, expect higher rack and wholesale

prices in the coming months from improved asphalt

demand and higher crude prices

Source:  New Jersey Department of Transportation

NuStar’s

Gross Margin per Barrel

(a)

Product margin per barrel is calculated by taking product sales less cost of

product sales divided by total barrels sold  (includes light products)

(b)  Adjusted

product

margin

per

barrel

excludes

the

$61

million

loss

related

to

certain derivative contracts terminated in May 2008

Should see comparable margins in 2009 versus 2008,

despite expectations of lower rack asphalt prices

Targeting a margin per barrel for the second quarter of

2009 of $8.25 to $8.50, which is slightly lower than last

year’s adjusted margin per barrel

Expect a stronger margin per barrel in 4Q09 unlike

4Q08, which was hit by the sharp decline in product

prices and higher costs of goods sold

Expect slightly higher sales volumes in 2009 assuming

the impact from the stimulus package kicks in by the

second half of year

Best case scenario for NuStar’s

asphalt earnings is a

strong margin supported by an affordable asphalt price

1Q08

2Q08

3Q08

4Q08

2008

1Q09

Product Margin per

Barrel (a)

$4.43

$1.37

$16.44

($1.66)

$6.22

$5.90

Adjusted

Product

Margin

per Barrel (b)

$8.89

$8.78

Asphalt

–

Impact

on

Supply

from

Coker Expansions and U.S.

Refinery Outlook

Steve Hays

VP Strategic Planning

36

Announced U.S. Coker Projects:

Despite Some Delays/Cancellations, Impact of

Coker Projects on Asphalt Supply Still Intact

Source:  PIRA Refinery Database; Company Information

37

Approximately 85% of the announced coker projects listed are either complete or have a high likelihood of

completion (i.e. firm projects)

Most of the coker capacity is still expected to come on-line in 2011 and 2012, which should tighten asphalt supply

even more

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

Complete

12

Marathon - Garyville, Louisiana

III

44.0

180.0

4Q 2009

Firm

13

Hunt - Tuscaloosa, Alabama

III

18.5

15.0

3Q 2010

Firm

14

ConocoPhillips - Wood River, Illinois

II

65.0

55.0

1Q 2011

Firm

15

Atofina Petrochemicals Inc.- Port Arthur, Texas

III

50.0

-

1Q 2011

Firm

16

BP/Husky - Toledo, Ohio

II

25.0

-

1Q 2011

Firm

17

Pasadena Refining System - Pasadena, Texas

III

29.0

100.0

2Q 2011

Probable

18

BP - Whiting, Indiana

II

95.0

30.0

1Q 2012

Firm

19

Motiva - Port Arthur, Texas

III

40.0

325.0

1Q 2012

Firm

20

ConocoPhillips - Borger, Texas

III

20.0

34.0

2Q 2012

Probable

21

Marathon - Detroit, Michigan

II

28.0

13.0

2Q 2012

Probable

Total US Expansion

535.2

867.0

Expansions Completed through 2008

120.7

115.0

Firm Expansions 2009-2012

337.5

605.0

Probable Expansions 2009-2012

77.0

147.0

38

Recent

Refining

Economics’

Impact

on                 

U.S. Coker Projects

Have caused refiners to operate existing cokers

at minimum throughputs

Have

not

caused

the

cancellation

of

refinery

coker

projects

tied

to

Canadian

crude

producers

or

required

by environmental consent decrees

Have caused coker

projects to be delayed where possible

Have caused refiners to cancel cokers

that were not fully committed

Are not expected to generate new coker

projects

Reconciliation of Coker Projects from June 2008 List:

Refinery

Added/Cancelled/Pushed

Forward/Delayed

Announced Coker

Capacity (mbpd)

Original Start

Up Date

New Start

Up Date

1

BP - Toledo, Ohio

Added

2.0

1Q 2007

1Q 2007

2

Valero - Port Arthur, Texas

Added

25.0

1Q 2007

1Q 2007

3

Conoco Phillips - Borger, Texas

Delayed

25.0

4Q 2007

2Q 2012

4

Chevron - El Sedundo, California

Added

15.0

4Q 2007

4Q 2007

5

Sinclair - Sinclair, Wyoming

Pushed Forward

20.0

4Q 2008

4Q 2007

6

Conoco Phillips - Los Angeles, California

Added

5.0

4Q 2008

4Q 2008

7

Holly - Artesia, New Mexico

Cancelled

25.0

1Q 2009

n/a

8

Sinclair - Tulsa, Oklahoma

Cancelled

28.5

2Q 2009

n/a

9

Marathon - Cattlettsburg, Kentucky

Cancelled

37.0

1Q 2010

n/a

10

Marathon - Garyville, Louisiana

Pushed Forward

44.0

1Q 2010

4Q 2009

11

Valero - St. Charles, Louisiana

Cancelled

10.0

4Q 2010

n/a

12

Conoco Phillips - Wood River, Illinois

Delayed

65.0

3Q 2010

1Q 2011

13

BP - Whiting, Indiana

Delayed

95.0

2Q 2011

1Q 2012

14

Motiva - Port Arthur, Texas

Delayed

40.0

1Q 2011

1Q 2012

15

Marathon - Detroit, Michigan

Delayed

28.0

4Q 2010

2Q 2012

16

Conoco Phillips - Borger, Texas

Cancelled

20.0

2Q 2012

n/a

17

Conoco Phillips  - Wood River, Illinois

Cancelled

30.0

2Q 2013

n/a

Coker Projects Cancelled (6 projects)

(150.5)

Coker Projects Added (4 projects)

47.0

(103.5)

Coker Project Size Revisions from June 2008 Presentation

(14.5)

Total Change

(118.0)

Coker Capacity (June 2008 NuStar Presentation)

653.2

Coker Capacity (June 2009 NuStar Presentation)

535.2

Total Change

(118.0)

Source of data for graphs:  U.S. Energy Information Administration Monthly Stats, Weekly Petroleum Status Report and Company Data

39

U.S. Refinery Utilization Rate

Weak

Margins

have

also

Impacted                       

Utilization Rates and Asphalt Supply

2009 YTD average of 82.3% is significantly lower than

last year (i.e. 85.3%) and the five-year average (i.e.

89.4%)

U.S. refiners have cut crude oil runs to avoid driving

weak margins lower

As a result of this lower refinery utilization, all refinery

production, including asphalt, is getting reduced

3-2-1 U.S. Gulf Coast Refining Margin           

($ per Barrel)

Source of data for graphs:  U.S. Energy Information Administration Monthly Data and 2009 Annual Energy Outlook

40

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

Low

Utilization

Rates

Expected

to                       

Impact Asphalt Supply Going Forward

The

combination

of

lower

refinery

utilization

and

completed

coker

projects

has

dropped

asphalt

production

by

more

than

100

mbpd

since

2006

Post-2008, this same combination of factors should continue to provide downward pressure

on asphalt production

Asphalt –

Impact on Asphalt

Demand from U.S. Highway

Funding and Stimulus Package

Mike Stone

VP -

Asphalt Marketing Supply & Trading

41

Asphalt Paving Market

More than 100 million tons of asphalt are consumed worldwide each year

Approximately 32 million tons of asphalt paving products are sold each year in the U.S.

Approximately 85% of asphalt consumed is used for road paving and approximately 10% used for roofing

products

Majority of roofing product consumption is repair work

Public sector, depending on where you are in the U.S., can represent 40% to 60% of the total paving market

Public work is typically around 10% to 15% new work and 85% to 90% repair and maintenance

Public sector primarily builds highways and transportation infrastructure for various state Departments of

Transportation

Private sector represents the rest of the market and primarily builds residential roads, parking lots,

asphalt paths and courts

Private work is typically around 90% to 95% new work and 5% to 10% repair and maintenance

Private sector is expected to be hit hard this year because of weak economy

NuStar

Markets

Asphalt’s Position in Paving Market

42

Majority of NuStar’s asphalt customers are road and bridge construction companies who operate asphalt hot

mix plants that combine rock aggregate with asphalt to make road pavements

50% of NuStar’s customers serve the private commercial sector and 50% serve the public sector

Small number of NuStar’s customers manufacture residential asphalt roofing shingles and building materials

Poor Road Conditions in the U.S. Driving Need for              

Transportation Infrastructure Improvements

Poor Road Conditions in the U.S. Driving Need for              

Transportation Infrastructure Improvements

Significant infrastructure needs in the U.S.

Major increase in road investment needed to accommodate

growing demand on nation’s surface transportation system

U.S. is only spending a fraction of what we should to

maintain roads

Approximately one-third of the nation’s major highways,

including Interstates, freeways and major roads, are in poor

or mediocre condition.

Roads in urban areas, which carry 66 percent of the

traffic, are in much worse shape

Spending around $78 billion annually on highways

U.S. Department of Transportation estimates that the

current backlog of unfunded but needed road, highway and

bridge repairs and improvements is $495 billion

Source:  American Association of State Highway and Transportation Officials (AASHTO) and TRIP, a national transportation research group

43

Vehicle travel on America’s highways increased by 41 percent from 1990 to 2007, while new

road mileage increased by only four percent and the nation’s population grew by 22 percent

from 1990 to 2008

Traffic

congestion

costs

American

motorists

$78.2

billion

a

year

in

wasted

time

and

fuel

costs

and

Americans spend 4.2 billion hours a year stuck in traffic

U.S. Stimulus Package –

Overview                       

of Transportation Infrastructure Stimulus Funds

Summary of Highway Provisions under The American Recovery and Revitalization Act (“ARRA”):

$27.5

billon

for

highways

–

Funding

available

through

September

30,

2010

After set asides, $26.8 billion , or 97% of the total, apportioned to U.S. States and D.C, using the SAFETEA-LU

highway formula

120 days after apportionment of funds, or June 30, 2009, states must obligate 50% of their apportionment or the U.S.

Department of Transportation (DOT) shall withdraw 50% of the funds, less the amount obligated, and redistribute to

other states that have had no funds withdrawn

One year after apportionments, or March 31, 2010, the U.S. DOT can withdraw any unobligated funds and

redistribute to states that have not had funds withdrawn

Priority will be given to projects that can be completed within three years

$1.5

billion

–

Funding

available

through

September

30,

2011

Awarded to states, local governments, or transit agencies through a new program called “Supplemental Discretionary

Grants for A  National Surface Transportation System”

Grants will be competitively awarded and not less than $30 million nor more than $300 million will be geographically

distributed across the country

Priority will be given to projects that can be completed within three years

44

Source: National Asphalt Pavement Association (NAPA)

th

th

Total Apportionment

Amount Required to

be Obligated by June

30, 2009

Total Obligated as of

May 31, 2009

Obligations as a %

of June 30 Target

California

$2,569,568,320

$899,348,912

$1,182,999,790

132%

Colorado

403,924,130

141,373,446

231,891,080

164%

Delaware

121,828,650

42,640,028

38,549,174

90%

Florida

1,346,735,003

471,357,251

801,322,857

170%

Georgia

931,585,680

326,054,988

233,386,699

72%

Maryland

431,034,777

150,862,172

220,330,301

146%

North Carolina

735,526,684

257,434,340

450,909,494

175%

New Jersey

651,774,480

228,121,068

338,393,834

148%

New Mexico

252,644,377

88,425,532

127,793,729

145%

New York

1,120,684,723

392,239,653

509,738,373

130%

Oklahoma

464,655,225

162,629,329

375,515,975

231%

Pennsylvania

1,026,429,012

359,250,154

553,867,982

154%

South Carolina

465,118,683

162,078,519

188,440,330

116%

Texas

2,250,015,146

787,505,301

895,778,285

114%

Virginia

694,460,823

243,061,288

127,885,933

53%

Total to States NuStar Markets

$13,465,985,713

$4,712,381,981

$6,276,803,837

133%

Total U.S. Apportionment

$26,817,140,267

Percent States NuStar Markets

50%

Large Portion of Stimulus Funds Apportioned to          

States NuStar

Markets Rack Asphalt

Of

the

states

in

which

NuStar

markets

rack

asphalt,

all

states

have

met

the

June

30

deadline

to

obligate

at

least

50%

of

the

funds

within

120

days

or

by

June

30

Stimulus Funds Apportioned to States NuStar

Markets

Asphalt Over Its Rack

Source: Data provided to ARTBA by the Federal Highway Administration

45

Stimulus Plan Funds Expected to Drive

Significantly Higher Asphalt Demand

Stimulus funds expected to provide further upside to asphalt demand over the next three years

Continue to expect stimulus package will positively impact asphalt demand in the second half of 2009

Larger impact to asphalt demand should be felt in 2010 and 2011 when most of the stimulus spending is expected

to occur

Additional

7.5%

increase

in

rack

asphalt

throughputs

is

expected

to

generate

an

incremental

$12

million

of

operating

income

annually,

assuming

NuStar’s

$8.78

adjusted

gross

margin

per

barrel

earned

in

2008

46

Over the life of the stimulus package, or 2009 through 2011, expect to see

asphalt demand increase by a weighted average of around 7.5% compared

to without stimulus funds

With Stimulus

Package

Without Stimulus

Package

Increase /

(Decrease)

2009

2.3%

-3.6%

5.9%

2010

6.8%

-2.3%

9.1%

2011

9.4%

2.7%

6.7%

Cumulative Impact to U.S. Asphalt Demand from Stimulus Funding

Proposed U.S. Highway Funding Expected

to be Significantly Larger than Current Program

Proposed U.S. Highway Funding Expected

to be Significantly Larger than Current Program

47

* Media reports, Company estimates and ARTBA (American Road and Transportation Builders Association)

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

$37.1

$38.1

$40.4

$41.8

$44.5

Stimulus Funds

SAFETEA-LU

$63.7

$66.2

$68.0

$72.6

$74.5

“America’s transportation systems are the lifeblood of

our economy and when properly maintained and

supported can be a catalyst for economic growth. 

These systems allow people to get to jobs and allow

businesses to access wider pools of labor, suppliers,

and customers. The ability to efficiently move freight

will be critical to our economic recovery. Without

efficient transportation routes, economies stagnate.”

Transportation Secretary Ray LaHood’s  testimony to

the House Transportation Appropriations

Subcommittee June 4, 2009

Current Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) for 2005 through

2009 expires on September 30, 2009

Insufficient

revenues

will

cause

the

Highway

Trust

Fund

Account

to

reach

a

zero

balance

possibly

as

soon

as

the

middle

of

summer

of

2009

and

will

require an additional $5 to $7 billion to meet 2009 appropriations bill and $8 to $10 billion to get through 2010*

Obama administration is working on a solution and will dedicate the funds necessary to continue infrastructure spending

SAFETEA-LU will be authorized with what is expected to be a larger financial commitment than previous programs (~$400 to $450 billion) or around

a 48% increase in highway investment

Of

the

total

spending

that

s

being

proposed,

around

75%

will

be

allocated

to

highways

and

25%

to

mass

transit

Congress and every state legislature is considering alternative methods of revenue generation for purpose of transportation

infrastructure including:  (a) indexing gas tax to inflation; (b) private-public partnerships; (c) vehicle miles traveled tax; (d) tolling

Jobs are of particular importance to Washington right now and transportation infrastructure = JOBS

$3.5

$13

$13

$202 billion

$345 billion

(Fiscal Year Ended September 30)

Warm-Mix Asphalt Overview

Ron Corun

Manager Asphalt Technical Services

48

As part of stated goal to become a leader in the asphalt

industry, NuStar

Energy L.P. is implementing a new

technology at its asphalt terminals to allow it to blend and

supply warm-mix asphalt to its customers

System will add and blend a waterless asphalt binder called

Evotherm

3G into conventional asphalt at its terminals

Binder changes the properties of asphalt to make it

usable at lower temperatures

Customers will not have to make any investment in

additional equipment and material can be applied to

roads using standard paving equipment

Technology

is

not

proprietary

-

Others

can

produce

warm-mix asphalt if they wish to invest in the additive

system

What

is

Warm-Mix

Asphalt?

What

is

Warm-Mix

Asphalt?

Warm-mix technology decreases the temperature that the asphalt must be mixed by 50 to 100 degrees

providing financial, pavement quality and environmental benefits

Traditional hot-mix asphalt must be heated between 300 and 350 degrees as it is mixed with rock material at hot-

mix facilities

49

Benefits of Warm-Mix Asphalt -

Energy Savings and Environmental

Benefits of Warm-Mix Asphalt -

Energy Savings and Environmental

Energy Savings

Because less fuel is needed to heat the warm-

mix asphalt, documented fuel savings for users

generally range from 10 to 30 percent  

Environmental Benefits

Decreased heat and fuel usage also provide air

quality

benefits

–

Every

10

degree

reduction

in

asphalt mix cuts fumes in half

Carbon Dioxide (CO2) reduced by 30-40%

Sulfur Dioxide (SO2) reduced by 35%

Volatile Organic Compounds (VOCs) reduced by

50%

Nitrogen Oxide (NO) reduced by 60-70%

Dust reduced by 20-25%

Estimated that if all roadwork in the nation were

done with warm-mix asphalt, it would be the

equivalent of removing 1.5 million cars from the

U.S. roads

Hot-Mix

Asphalt

Warm-Mix

Asphalt

50

Benefits of Warm-Mix Asphalt -

Pavement Construction and Quality Benefits

Benefits of Warm-Mix Asphalt -

Pavement Construction and Quality Benefits

Pavement Construction

Increased pavement life because lower-mix

temperature results in reduced oxidation

and aging

Improved compaction resulting in a more

dense and stable road surface

Lower temperature results in less time

required to cool before a road can be

opened or reopened

Lower temperature enables road

construction and repair beyond the normal

paving season typically from April through

October

Quality Benefits

Improved working conditions with the virtual

elimination of smoke and fumes, and, much

cooler temperatures can improve productivity

2 ½

Year Old Warm-Mix Asphalt  pavement in Charlotte, NC

51

Timing and Implementation:

The majority of NuStar’s warm-mix systems have been put in place and product has been

sold or is expected to be sold at the following locations:

Atlanta, GA market –

Completed May 2009

Paulsboro, NJ market –

Completed June 2009

Houston, TX market –

Completed June 2009

Baltimore, MD market –

Expected Completion September 2009

NuStar is looking at opportunities for installations at some of its other asphalt terminals

Benefits to NuStar:

While we don’t expect to capture a higher margin on warm-mix asphalt, we do expect to

sell incremental volumes, primarily due to expectations that warm-mix can extend the

asphalt season on both sides

Total cost of implementing warm-mix asphalt systems over the locations above total

around $750,000

Expected benefit

Approximately $1.1 million of operating income in 2009

Approximately $1.4 million of operating income in 2010

Approximately $2.8 million of operating income in 2011

Timing of Implementation                 

and Benefits to NuStar

Timing of Implementation                 

and Benefits to NuStar

52

Fuels Marketing

Paul Brattlof

Senior VP Supply and Trading

53

Bunkering Operations

Bunkering Operations

54

Currently we sell bunker fuel to ship owners, including cruise line ships, from our terminal locations at St.

Eustatius and Point Tupper where we also store bunker fuel for third parties

Strategic location of these two facilities and their storage capabilities provide us with a reliable supply of product

and ability to capture incremental bunker sales margin

St.

Eustatius

facility

has

six

mooring

locations

that

can

supply

bunkers

to

vessels

up

to

520,000

dwt

Point Tupper has two mooring locations that can supply bunkers to vessel up to 400,000 dwt

Main drivers of our bunkering business include number of ship calls, seasonality, location and

competition from bunkering fuel delivery locations around the world

Targeting

$10

to

$15

million

of

operating

income

from

NuStar’s

bunkering

operations

in

2009

Goal is to continue to increase bunker sales at our St. Eustatius and Point Tupper facilities and certain

niche markets in North America

1Q07

2Q07

3Q07

4Q07

2007

Barrels

2,704,374

2,648,874

2,527,240

2,451,330

10,331,818

Operating Income

6,816,443

$   

6,547,458

$ 

6,947,000

$    

4,128,097

$    

24,438,998

$  

1Q08

2Q08

3Q08

4Q08

2008

Barrels

2,592,800

2,713,403

2,184,305

2,711,677

10,202,185

Operating Income

5,141,745

$   

7,617,343

$ 

10,227,194

$  

10,348,853

$  

33,335,135

$  

1Q09

Barrels

2,930,163

Operating Income

1,446,327

$   

Fuels Marketing Operations -

While not a Large Driver of        

Earnings, A Great Complement to Our Other Operations

Fuels Marketing Operations -

While not a Large Driver of         

Earnings, A Great Complement to Our Other Operations

55

As

part

of

marketing

operations,

purchase

gasoline,

distillates

and

refinery

feedstocks

to

take

advantage

of

arbitrage

opportunities

and

contango

markets

We do not speculate on commodity prices

Contango

Trades –

During contango

markets, utilize storage at strategically located terminals, including NuStar

terminals, to deliver products at favorable prices

Arbitrage

Opportunities

–

Attempt

to

take

advantage

of

geographic

arbitrage

opportunities

by

utilizing

transportation

and

storage

assets,

including

NuStar’s

terminals

and

pipelines,

to

deliver

products

from

one

geographic

region

to

another with favorable pricing

Product/Wholesale

Trading

-

Purchase

gasoline

and

distillates

in

spot

markets

from

refiners

and

traders,

and

offer

for

sale

to

wholesale

customers

through

NuStar

terminals

and

third-party

terminals

Currently

leasing

around

1

million

barrels

of

NuStar’s

91

million

barrels

of

storage

capacity

Trading

personnel

are

a

complement

to

NuStar’s

other

operations

(i.e.

transportation,

storage

and

asphalt)

In-house expertise provides market intelligence and solutions for optimizing assets and customers

1Q07

2Q07

3Q07

4Q07

2007

Barrels

379,049

226,168

549,514

1,285,963

2,440,694

Operating Income

-

$              

804,094

$      

(931,538)

$      

(2,777,433)

$   

(2,904,877)

$   

1Q08

2Q08

3Q08

4Q08

2008

Barrels

1,732,651

1,409,175

2,093,083

2,414,060

7,648,969

Operating Income

4,785,821

$   

(5,800,057)

$  

4,974,247

$    

(503,188)

$      

3,456,823

$    

1Q09

Barrels

3,416,476

Operating Income

691,033

$      

Fuels Marketing Operations –

Strong Risk

Mitigation Policy

Fuels Marketing Operations –

Strong Risk

Mitigation Policy

56

Marketing employees are paid the same bonus, based on a DCF target, as all of our other employees

NuStar has a risk management committee that oversees trading controls and procedures and certain

aspects of commodity and trading risk management

Strong mid-office support led by Risk Management Trade Compliance Officer

At the end of March 31, 2009, NuStar’s asphalt refining inventories represented 87% of our total

inventory and they remain unhedged

Remaining total inventory consists of gasoline, distillates and bunkers, with a large majority of this inventory

hedged

Exposure to hedged inventory is limited to basis risk changes, or, the exposure to a change in price of the physical

position as compared to the change in price of the paper position that is being utilized as a hedge

Risk Mitigation

Asphalt Refining & Plant

Overviews

Mike Pesch

VP Regional Operations

57

Core Refining Process

Core Refining Process

Distillation

Tower

(Crude Unit)

Vacuum              

Unit

Propane, Butane and

Lighter

Intermediate Products

Final Products

Light Straight Run

Gasoline

Naphtha

Kerosene

Atmospheric Gas Oil

Vacuum Gas Oil

Residual

<90   F

90-180   F

180-370   F

370-500   F

500-650   F

650-950   F

>950+   F

Further Processing

Refinery Fuel Gas

Propane

NGLs

Gasoline

Gasoline

Jet Fuel

Kerosene

Jet Fuel

Diesel

Fuel Oil

Gasoline

Diesel

Fuel Oil

Gasoline

Diesel

Fuel Oil

Gasoline

Diesel

Heavy Fuel Oil

Asphalt

58

Crude oils are typically classified and priced

by density and sulfur content

Density of crude oil commonly measured by

API gravity (Heavy vs. Light)

Higher the API number, the lighter the

compound

Light crude oils are easier to process

Heavy crude oils are more difficult to

process

Sulfur content of Crude Oil (Sweet vs. Sour)

Sweet crudes typically have less than 0.5%

sulfur

Sour crudes have 1.0% or more sulfur

Higher sulfur crudes typically require

additional processing

Classification of Crude Oils

HEAVY

API GRAVITY

LIGHT

(Less Expensive)

(More Expensive)

BOSCAN

BCF-13

NAPO

MAYA

ARAB HEAVY

ARAB MED.

MARS

ARAB LIGHT

ALASKA NORTH SLOPE

BRENT

WTI

Because the Boscan

and BCF-13 crude oils are lower quality, they are more

discounted to light, sweet crudes

Discount to WTI is currently between $5 and $10 per barrel

59

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

5

10

15

20

25

30

35

40

45

Boscan

and BCF-13 Crudes are some of the Lowest

Quality Crudes, but have the Highest Yield of Asphalt

rd

rd

Simple Asphalt Refining –

“On Purpose”

Simple Asphalt Refining –

“On Purpose”

Atmospheric

Distillation Tower

Vacuum

Unit

Naphtha

Vacuum Gas Oil

Marine Diesel Oil

Asphalt

~70% Yield

~3% Yield

~15% Yield

~12% Yield

Intermediate          

Products            

Marketing

Asphalt                         

Marketing

Governmental

Agencies,       

Paving

Contractors     

& Hot Mix

Producers

100%

Asphalt Cement

Rail

Truck

Barge

Ship

Sold to 3

Party

Refineries

NuStar

Owned

& Network of

3

Party

Terminals

Rack  

Sales

(~66%)

Wholesale: ~25%

Export: ~9% 

Venezuelan

Crude Oil

(BCF-13 &

Boscan)

60

100%

Asphalt Cement

High Complexity Refinery –

Coker Unit Drives More Lighter End  

Production and Less Heavier End Production Like Asphalt

High Complexity Refinery –

Coker Unit Drives More Lighter End  

Production and Less Heavier End Production Like Asphalt

Vacuum

Unit

Crude

Unit

Propane/Butane

Low Octane Gasoline

Medium/Heavy

Sour Crude Oil

Reformer Unit

High Octane Gasoline

Kerosene

Distillate

Desulfurizer

Kerosene/Jet Fuel

Diesel

Diesel/Heating Oil

Gas Oil

Heavy Fuel Oil

7% Propane/Butane

58% Gasoline

28% Distillate

Diesel

Heating Oil

Jet Fuel

15% Heavy Fuel Oil

& Other

Hydrocracker

Light Cycle

Oil (LCO)

Alkylation

Unit

FCC Gasoline

Alkylate

Light Gas Oil

Fluid

Catalytic

Cracker

(FCC)

Hydrocracker Gasoline

Coker Unit

Coke

High complexity refineries typically run heavier and more sour crude oils and produce the

highest yields of lighter/higher value products

61

Total throughput capacity of 74,000 barrels per day

Refinery consists of two petroleum refining units and a liquid storage terminal for petroleum and

chemical products

Total storage capacity of 3.5 million barrels

Paulsboro refinery supplies various asphalt grades and intermediate products by ship, barge,

railcar and tanker trucks to a network of 10 asphalt terminals in the Northeast

NuStar’s Paulsboro Asphalt Refinery

NuStar’s Paulsboro Asphalt Refinery

Located in the middle of the major U.S.

East Coast asphalt demand center right off

the Delaware River

Largest on-purpose asphalt refinery in the

U.S.

Primary competitors include Valero Energy

and Irving Oil

Terminal network stretches from New York to

North Carolina

Refinery constructed in two phases in 1978

and 1981

CITGO purchased Paulsboro refinery from

Seaview Oil Company in 1991

Delaware  River

62

Paulsboro

Crude

Oil

&

Products

Slate 

Paulsboro

Crude

Oil

&

Products

Slate 

2008 Product Yields

Asphalt

~68%

Marine Diesel Oil

~17%

Vacuum Gas Oil

~12%

Naphtha

~3%

NuStar’s

Paulsboro refinery runs both BCF-13 and

Boscan

crude oil, typically 50/50, with some

opportunistic crudes

NuStar’s

Paulsboro Asphalt Refinery

63

2008 Crude Runs (mbpd)

(74,000 bpd capacity)

1Q

2Q

3Q

4Q

Total

Boscan

27

27

33

23

28

BCF-13

26

31

29

20

27

M-100 HS FO    

-

-

5 

-

1

Total

53

58

67

43

56

MM barrels

0.6

5.3

6.2

3.9

16.0

Utilization

72%

78%

91%

59%

76%

2008 Product Yields (mbpd)

1Q

2Q

3Q

4Q

Total

Asphalt

35.0

39.0

45.6

30.1

38.1

Naphtha

1.6

1.4

1.6

1.2

1.4

MDO

8.8

10.3

10.9

7.2

9.4

VGO

6.9

6.6

8.9

4.6

6.7

Total

52.3

57.3

67.0

43.1

55.6

NuStar’s Savannah Asphalt Refinery

NuStar’s Savannah Asphalt Refinery

Located on the U.S. Southeast seaboard,

approximately 2.5 miles upstream from downtown

Savannah adjacent to the Savannah River

Center of the Southeast premium asphalt market

Only refinery and asphalt producer on the Southeast

seaboard

1,000 feet of frontage along Savannah River

Built in 1929 by the Mexican Petroleum

Corporation of Georgia and operations began in

1930

Later purchased by Amoco

CITGO purchased refinery from Amoco in April 1993

Total throughput capacity of 30,000 barrels per

day

Source:  Google Maps

Savannah

River

Refinery includes two atmospheric towers, a tank farm, a marine dock, a PMA production

facility, testing laboratory and processing areas

Total storage capacity of 1.2 million barrels

Savannah

refinery

supplies

various

asphalt

grades

by

truck,

rail

and

marine

vessel

to

a

network of 9 asphalt terminals in the Southeast

64

Savannah

Crude

Oil

&

Products

Slate 

Savannah

Crude

Oil

&

Products

Slate 

NuStar’s

Savannah Asphalt Refinery

65

2008 Crude Runs (mbpd)

(30,000 bpd capacity)

1Q

2Q

3Q

4Q

Total

Boscan

22.9

27.9

25.3

22.4

25.1

MM barrels

0.3

2.5

2.3

2.1

7.2

Utilization

77%

93%

83%

73%

83%

2008 Product Yields

Asphalt

~74%

Light Marine Gas Oil

~22%

Naphtha

~4%

NuStar’s

Savannah refinery runs Boscan

crude oil

2008 Product Yields (mbpd)

1Q

2Q

3Q

4Q

Total

Asphalt

17.0

20.7

18.9

16.6

18.6

Naphtha

0.8

1.1

1.0

0.8

1.0

LMGO

5.0

6.1

5.4

5.0

5.5

Total

22.8

27.9

25.3

22.4

25.1

Expansive network of 16 complementary third-party leased terminals with total asphalt storage capacity

of 3 million barrels

Includes

new

leases

for

three

of

SemGroup’s

asphalt

terminals

located

in

New

Jersey,

Virginia

and

Texas

Provides capability to market to diverse customer base

7.3 million barrels of net operational asphalt storage capacity

Enables

a

proven

“winter

fill”

strategy

of

storing

production

in

low-demand

winter

months

for

sale

during

the

summer paving season

Extensive Asphalt Logistics Network

Extensive Asphalt Logistics Network

66

Near-term, have identified around $12 million of high return, quick pay-back projects at the Paulsboro

and Savannah asphalt refineries  and NuStar asphalt terminals

Near-Term Capital                   

Investment Opportunities

Near-Term Capital                    

Investment Opportunities

Expected

In-Service

Expected

Type of Project

Opportunity

Capex

Dates

IRR

Improve Crude Oil

Improve flexibility to run alternative crude oils

~3.4 million

1Q09 thru 4Q09               ~150%

Flexibility and rates

and improve ability to run higher volumes of

crude oil at Paulsboro refinery resulting

in higher product volumes

Energy Efficiency

Improve energy efficiency by implementing

~$1.9 million

1Q09 thru 4Q09

~25%

projects that reduce usage of natural gas

at both Paulsboro and Savannah refineries

and terminal facilities

PMA Projects 

Increase production of high quality polymer      

~$4 million         

Complete                      ~60%         

modified asphalt at Savannah and Paulsboro         

refineries by constructing new storage tanks

Improve Product

Increase yield of Marine Diesel Oil 

~1.5 million

Paulsboro -

1Q10

~20%

Yields

recovery from gas oil at

Paulsboro refinery

Increase Product

Install Warm Mix Asphalt supply

~1.2 million

2Q09 thru 4Q09

~77%

Offering

capabilities at various terminal locations

Total

~$12 million

67

Longer term, continue to evaluate other

opportunities at Paulsboro and Savannah

refineries including:

Significant modifications to crude units at

Paulsboro and Savannah refineries to continue to

increase crude oil and product flexibility

Opportunities include:

Crude flexibility projects at both facilities

Improve quality of naphtha produced in

Savannah

Produce roofing flux at Paulsboro

Blending crudes to maximize throughput rates

Expected capital spending ranges from $50

to $60 million

Expect to complete evaluation by third

quarter 2009 with completion of projects

targeted for third quarter 2011

Long-Term Capital                   

Investment Opportunities

Long-Term Capital                   

Investment Opportunities

68

Transportation

Danny Oliver

VP –

Marketing & Business Development

69

Stable Revenues on NuStar’s

Transportation   

Segment Despite Demand Volatility

Stable Revenues on NuStar’s

Transportation   

Segment Despite Demand Volatility

70

NuStar’s

transportation revenues have been stable and growing relative to throughput volumes

Overview

of

Central

West

Pipeline

System

(Crude Oil and Refined Products)

Overview

of

Central

West

Pipeline

System

(Crude Oil and Refined Products)

71

Length

23 refined product pipelines with an

aggregate length of 3,255 miles and

11 crude oil pipelines with an

aggregate length of 812 miles

Refineries Served

Valero Energy

-

McKee, TX; 

Valero Energy

-

Three Rivers, TX

Valero Energy

-

Corpus Christi, TX

CITGO

-

Corpus Christi, TX

Valero Energy

-

Ardmore, OK

Products

Crude oil, gasoline, distillates

(including diesel and jet fuel), natural

gas liquids, blendstocks

and other

products

Regulating Body

Federal Regulatory Energy

Commission (FERC) / Texas /

Colorado / Oklahoma

Pipeline Capacity

(2008)

1,465 mbpd

BPD Transported

(2008)

845 mbpd

Average Utilization

58%

2008 Pipeline Receipts by Commodity

Crude Oil

45%

Gasoline

30%

Distillates

16%

Light Ends

4%

Jet Fuel

3%

Propane

2%

Central

West

Pipeline

System

-

Steady

Revenues           

Despite Recent Lower Throughput Volumes

Central

West

Pipeline

System

-

Steady

Revenues           

Despite Recent Lower Throughput Volumes

72

6.15% Tariff

Increase

4.32% Tariff

Increase

5.17% Tariff

Increase

Valero McKee

Refinery Outage

Impact  primarily

from Valero Energy

TAs and Sale of

Skelly

Belvieu

p/l

in

Drivers

Planned and unplanned turnarounds at refineries served

Producer Price Index (PPI) +1.3% tariff increase effective July 1 every year

Population Center Demand Focus

-

primarily gasoline and diesel that originate at Valero Energy refineries

Serves

growing

markets

primarily

in

South

Texas,

Dallas/Fort

Worth,

Houston,

Texas

Panhandle,

West

Texas, Denver and New Mexico

Since

the

pipelines

are

physically

integrated

with

Valero

Energy

refineries,

not

expected

to

face

significant

competition for transportation services

Throughputs (Thousands of BPD)

Revenues ($ in Thousands)

4Q08

Overview of East Pipeline System

Overview of East Pipeline System

73

Length

1,900 miles including 16 product

terminals with a storage capacity

of 3.3 million barrels

Refineries

Served

NCRA –

McPherson, KS

ConocoPhillips –

Ponca City, KS

ConocoPhillips –

Borger, TX

Frontier –

El Dorado, KS

Coffeyville Resources –

Coffeyville, KS

Sunoco Inc. –

Tulsa, OK

Refined

Products

Distillates (including diesel and jet

fuel), gasoline, natural gas liquids,

blendstocks and other products

Pipeline Related

Terminals

Terminalling fees and

transportation rates are included in

tariff

Regulating Body

Federal Regulatory Energy

Commission (FERC) and Kansas

Corporation Commission

Pipeline

Capacity (2008)

198 mbpd

BPD

Transported

(2008)

140 mbpd bpd (excluding ethanol

and biofulels)

Average

Utilization

70%

2008 Pipeline Receipts by Commodity

Gasoline

38%

Distillates

50%

Nat. Gasoline

5%

Propane

6%

Naphtha

1%

East Pipeline System –

Steady Revenues

Despite Seasonal Throughput Swings

East Pipeline System –

Steady Revenues

Despite Seasonal Throughput Swings

74

6.15% Tariff

Increase

4.32% Tariff

Increase

5.17% Tariff

Increase

Drivers

Currently expanding southern end of East pipeline (Kansas) to increase the capacity and flexibility in that area

Planned and unplanned turnarounds at the refineries served

Producer Price Index (PPI) +1.3% tariff indexation effective July 1 every year

Distillate Demand Focus –

primarily diesel fuel ultimately used for agricultural and railroad operations

Varies seasonally with gasoline demand peaking in early summer, diesel fuel demand peaking in late summer and propane

demand in the fall

Poor weather can also impact demand for products

Long haul (higher tariff) versus short haul barrels (lower tariff)

Competition with pipeline system owned by Magellan Midstream Partners, L.P. approximately 100 miles east of and parallel

to

the

East

Pipeline

System,

and

in

close

proximity

to

the

North

Pipeline

System

Seasonal

Impact

Seasonal

Impact

Seasonal

Impact

Seasonal

Impact

Throughputs (Thousands of BPD)

Revenues ($ in Thousands)

Overview of North Pipeline System

Overview of North Pipeline System

75

Length

440 miles including 4 product

terminals with a storage

capacity of 1.3 million barrels

Refineries

Served

Tesoro  Petroleum Corp. –

Mandan, ND

Refined

Products

Gasoline and Diesel Fuel

Pipeline

Related

Terminals

Terminalling fees are portion of

the transportation rate included

in tariff

Regulating

Body

Federal Regulatory Energy

Commission (FERC) and North

Dakota Public Utilities

Commission

Pipeline

Capacity

(2008)

51 mbpd

BPD

Transported

(2008)

45 mbpd

Average

Utilization

88%

2008 Pipeline Receipts by Commodity

Gasoline

69%

Distillates

29%

Jet Fuel

2%

North Pipeline System –

Steady Revenues               

Despite Seasonal Throughput Swings

North Pipeline System –

Steady Revenues               

Despite Seasonal Throughput Swings

76

6.15% Tariff

Increase

4.32% Tariff

Increase

5.17% Tariff

Increase

Drivers

Planned and unplanned turnarounds at the Tesoro Mandan refinery in North Dakota

Producer Price Index (PPI) +1.3% tariff increase effective July 1 every year

Demand for refined products, primarily gasoline and diesel, delivered to the Minneapolis, MN market

Demand fluctuates based on general economic conditions  and changes in weather as more people drive during 

warmer months

Long haul versus short haul barrels

Competition with pipeline system owned by Magellan Midstream Partners, L.P. approximately 100 miles east of and parallel

to the East pipeline and in close proximity to the North pipeline

Throughputs (Thousands of BPD)

Revenues ($ in Thousands)

77

Water-borne access

to ammonia imports

Overview of Ammonia Pipeline System

Overview of Ammonia Pipeline System

Length

2,000 mile pipeline –

One of two major

ammonia pipelines in the U.S. and only

one capable of receiving  foreign

production directly into system and

transporting  into nation’s corn belt

Product Supplied

Domestic production and imports directly

through three marine terminals in

Louisiana

Markets Served

Multiple  3 

-party owned terminals and

industrial facility locations in Nebraska,

Iowa, Illinois, Indiana and Missouri,

Arkansas and Louisiana

Pipeline Related

Terminals

Terminals owned by 3 

parties or 3  

party customers

Regulating Body

Surface Transportation Board  (STB) 

and Louisiana Public Service

Commission –

FERC indexation applied

to all tariff rates

Pipeline Capacity

(2008)

42 mbpd

BPD Transported

(2008)

37 mbpd

Average Utilization

87%

rd

rd

rd

Ammonia

Pipeline

System

–

Growing

Revenues

/             

1Q09 Impacted by Poor Weather

Ammonia

Pipeline

System

–

Growing

Revenues

/             

1Q09 Impacted by Poor Weather

78

Drivers

Producer Price Index (PPI) +1.3% tariff increase effective July 1 every year

Price of natural gas, the primary component of ammonia

Demand for direct application for crop production, which is dependent on the weather (not effective if ground is too

wet or dry)

Demand for nitrogen fertilizer use

Fertilizer alternatives such as liquid or dry fertilizer (less sensitive to weather conditions but generally more costly)

6.15% Tariff

Increase

5.17% Tariff

Increase

4.32% Tariff

Increase

Primarily due to

poor weather

Throughputs (Thousands of BPD)

Revenues ($ in Thousands)

$1.00

Increasing Rates from FERC’s PPI FG + 1.3% Rate –

2010 Rate Expected to be Higher Despite Potential Drop in Tariff

Increasing Rates from FERC’s PPI FG + 1.3% Rate –

2010 Rate Expected to be Higher Despite Potential Drop in Tariff

79

3.63%

6.15%

4.32%

5.17%

7.60%

(3.0)%*

While

2010

is

trending

negative,

NuStar

should

benefit

from

our

July

2009

increase

through

Q1

and

Q2

2010

Around 95% of NuStar’s

pipeline revenues receive the PPI+1.3% tariff increase

In

addition,

as

PPI-FG

falls,

our

operating

expense

dollars

are

expected

to

stretch

further

1/1/2010

Effect of PPI Finished Goods + 1.3% Tariff Indexing on $1/bbl 

$1.02

$1.07

$1.13

$1.18

$1.26

$1.28

Index

Value

2010 is the last year for the

FERC’s 1.3%  factor –

Next

5-Year  factor should be

published in Spring of 2011

Even with the projected

decrease in 2010, the

projected indexed tariff rate

is still expected to be higher

than the 2009 calendar year

1/1/2005

1/1/2006

1/1/2007

1/1/2008

1/1/2009

1/1/2011

* Estimate includes four months of preliminary 2009 monthly PPI data and 8 months of finished goods pricing holding at April 2009 levels plus 1.3%

80

Transportation Growth Opportunities

Gulf Coast Market

Major U.S. petroleum hub with multiple industrial needs

Take advantage of demographic growth in Central and South Texas,

by increasing utilization of existing assets

Mid-Continent Market

Provides solid earnings and logistical

competitive advantage with

connectivity to multiple refining and

supply hubs

East Pipeline System: Goal is to add

incremental capacity to take advantage

of seasonal peak demand and

downtime from refinery turnarounds

Ammonia Pipeline System:  Goal is to

build new pipeline connections to

capture volumes from other modes of

transportation

81

Expect Higher Operating Income from Transportation

Segment Despite Lower Throughputs

A tariff increase of around 7.6% effective July

1, 2009 should contribute to higher operating

income in 2009 over 2008

Tariff increase represents the highest increase

since indexation began in 1993

Around 95% of NuStar’s

transportation

revenues should receive the tariff increase

NuStar applies FERC indexation

methodology to all tariff rates

Total pipeline volumes expected to be 4% to

5% lower in 2009 versus 2008 primarily due to

impact from turnarounds

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

1Q09

2Q09

3Q09

4Q09

Valero Energy -

McKee, TX

FCCU, Alky

& Crude

Units

Valero Energy -

Ardmore, OK

Hydrocracker

Unit

Hydrotreater

Unit

Valero Energy -

Texas City, TX

Coker, Black Oil

Hydrotreater

and Crude Units

Valero Energy -

Three Rivers, TX

FCC &

Crude

Units

Valero Energy -

Corpus Christi, TX

FCC Unit, Heavy

Oil Cracker &

Alky Units,

Reformer Unit

Frontier -

El

Dorado, KS

FCC Unit

2009

Planned

Refinery

Turnarounds

Impacting

NuStar

82

Storage

Danny Oliver

VP –

Marketing & Business Development

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

Of the roughly 91 million barrels of storage capacity, approximately 50 million barrels is crude oil, 39 million barrels

is refined products and 2.3 million barrels is biofuels

Source:  Company Websites & Management Presentations

83

Independent Liquids Storage Capacity

(Millions of Barrels)

8

8

10

12

16

20

24

25

31

34

39

60

85

91

91

104

171

Storage Lease Contracts Driving                      

Higher Revenues Despite Lower Throughputs

Storage Lease Contracts Driving                      

Higher Revenues Despite Lower Throughputs

84

Primarily due to Valero TAs and

changing from throughput to lease

based contracts at seven terminals

Despite recent lower storage throughput revenues, total storage revenues have been increasing over the

last three years as NuStar has benefited  from $400 million construction program

Lower throughputs don’t necessarily translate into weaker earnings since the majority of the business is

under lease contracts

Approximately 90% of our revenues in the storage segment come from leased assets or assets connected to pipelines

in our transportation segment

Primarily due to changing from a

throughput to lease based contract at

seven terminals

775

758

790

775

781

782

845

794

795

761

713

702

652

596

*

*  Pro forma impact of changing from throughput to lease based contracts 

85

Numerous Opportunities in North America

Northeast

Market

(~11.4mm

bbls)

NY Harbor storage demand

continues to be strong with limited

land and customers realizing Gulf

Coast arbitrage and contango

markets

Southeast

Market

(~4.7mm

bbls)

SE market continues to show

rate increases

Gulf Coast Market (~18.7mm bbls)

Major U.S. petroleum hub with multiple industrial needs

Take advantage of demographic growth in South Texas by increasing utilization

of existing assets and continue to implement black oil strategy (crude and fuel

oil) at Texas City, TX

Significant customer demand for tank projects at St. James, LA

Caribbean

Market

(~13.0mm

bbls)

One of the primary shipping routes

to the U.S. with a favorable

operating environment and growing

bunker opportunities

Goal is to continue to build or

acquire terminals to have an even

bigger presence

West

Coast

Market               

(~10.7mm

bbls)

Market of its own, where

storage is limited, but rates

are strong

Point

Tupper

Market

(~7.4mm

bbls)

Offers world class logistics with deep water access, optimum shipping

routes, a favorable operating environment and growing bunker opportunities

Goal is to become a major international hub for world product flows

Grangemouth

Glasgow

Belfast

Runcorn

Eastham

Amsterdam

Grays

86

UK and Amsterdam Opportunities

UK

Market

(~5.6mm

bbls)

Stable market with opportunity

to grow through acquisitions and

the build-out of existing terminal

assets

Goal is to build and/or acquire

large marine terminals to

complement  NuStar’s

other

major hubs

Amsterdam/Rotterdam/Antwerp

Market

(~3.7mm bbls)

Strategic European petroleum hub

with growing demand for storage

but limited land

Goal is to become a major storage

and bunker player by building and

acquiring new storage facilities

87

Contango Markets and Limited Storage Capacity

Continue to Drive Strong Demand for Storage

Demand

for

terminal

storage

in

key

markets

is

strong

and

growing

primarily

driven

by:

Contango markets

Good

fundamentals

in

the

refining

industry

over

the

last

decade

with

a

significant

increase

in

the

amount

of

refining

capacity increase but limited storage capacity increases

Growth in petroleum demand despite cleaner burning fuels initiatives including ethanol blended gasoline, biodiesel

and efficiency gains (CAFÉ

standards)

Concerns over security of supply (strategic reserves)

Arbitrage opportunities (e.g. between the U.S. and Europe)

Particularly strong demand at terminals having waterborne access

WTI NYMEX Crude Oil Futures 12-Month Strip ($ per Barrel)

1/1/2008:  $(6.08) Backwardated

6/17/2009:  $5.74 Contango

1/1/2007:  $5.89 Contango

1/1/2009:  $14.71 Contango

88

Expect higher results from storage segment 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:

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

–

13.0

mm

bbls

storage

capacity

Texas

City,

TX

Terminal

–

2.7

mm

bbls

storage

capacity

Expect Higher Operating Income from Storage Segment

Despite Lower Throughputs

Closing Remarks

Curt Anastasio

CEO & President

89

Execution of Game Plan

90

Financial

Maintain sufficient liquidity with

disciplined financial strategy near term

Work towards having negative outlook

removed from rating agencies

Execute and deliver on capital projects

Maintain higher coverage ratio on

margin-related businesses

Continue to grow the distribution at NuStar Energy L.P. and NuStar GP Holdings, LLC

Operational

Continue to excel in safety and

environmental

Improve bottom-line by implementing

cost reductions and energy efficiency

programs

Continue to make NuStar one of the

top workplaces in the nation by taking

care of employees and giving back to

the communities NuStar works in

Corporate Culture

Asphalt

Pursue attractive production and

logistics opportunities to take

advantage of tight supply and demand

fundamentals

Implement projects to provide crude

flexibility and reduce seasonality

Maintain proportion of operating

income from margin-based and fee-

based assets

Storage

Pursue attractive opportunities to

either build or acquire storage

facilities both domestically and

internationally

Continue to sign up long-term

contracts for new storage builds

Continue to take advantage of strong

demand for storage by leasing out

facilities at attractive rates

Evaluate attractive opportunities to

add incremental capacity and

increase utilization of assets in

growing markets that NuStar serves

Transportation

Questions & Answers

Appendix

92

Experienced Management Team

93

Management Bios

Management Bios

Curt Anastasio, CEO & President

•

President and CEO of NuStar Energy L. P. (NYSE: NS) and NuStar GP Holdings, LLC (NYSE:

NSH)

•

Anastasio

has been President of NuStar Energy L.P. and its predecessors since December 1999,

and

he

assumed

the

position

of

CEO

of

NuStar

GP

Holdings,

LLC

in

2006.

•

Prior

to

becoming

President

of

NuStar

GP,

LLC

in

1999,

Anastasio

held

various

positions

in

supply, trading, transportation, marketing, development and legal.  He has 20 years of industry

experience.

•

Curt

serves

on

the

Board

of

the

National

Association

of

Publicly

Traded

Partnerships.

•

In addition to participating in various volunteer activities, Curt serves on the Board of Trustees of

the United Way of San Antonio and Bexar County, the San Antonio Medical Foundation and

Southwest Research Institute.  He also serves on the Board of Directors of the Alamo Area

Council

of

the

Boy

Scouts

of

America,

and

the

Economic

Development

Foundation–

all

in

San

Antonio. In addition, Anastasio

belongs to various professional organizations and has lectured and

written on legal and business topics.

•

Curt

received

a

Juris

Doctorate

degree

from

Harvard

Law

School

in

1981

and

a

Bachelor

of

Arts

degree, Magna cum Laude, from Cornell University in 1978. After graduation, he practiced law in

New York City.

94

Management Bios

Management Bios

Steve

Blank,

Senior

VP

-

CFO

&

Treasurer

•

Chief Financial Officer, Senior Vice President and Treasurer of NuStar Energy L.P.  In

this

position,

he

is

responsible

for

corporate

finance,

external

reporting,

accounting,

budgeting and forecasting, investor relations, risk management, tax, treasury and

credit.

•

Before that, Steve held a variety of positions with UDS in New York, London and San

Antonio, including Director, Planning and Development (1980-83); Assistant Treasurer

–

Corporate Finance (1983-90); Vice President of Investor Relations (1991-95); Vice

President

–

Information

Technology

(1996);

and

Vice

President

–

Finance

and

Treasurer (1996-01). 

•

Before joining UDS in 1980, Steve worked for two years with National Westminster

Bank in New York.

•

Steve received a BA in History from the State of University of New York in 1976.  He

went on to obtain a Master’s in International Affairs, with a specialization in Business,

from Columbia University in 1978. 

95

Management Bios

Management Bios

Rick

Bluntzer,

Senior

VP

-

Operations

•

Rick Bluntzer, Senior Vice President of Operations oversees NuStar Energy

L.P.’s extensive pipeline, terminal, international and asphalt refining operations.

Additionally he oversees NuStar’s engineering, information systems (operations)

and procurement organizations.

•

Rick began his career with Valero Refining Company in 1976, serving in various

operating and management systems until 1979, when he became a part of

Valero’s refinery acquisition team.

•

Rick joined the Valero L.P. organization after the Valero/UDS merger and held

various senior operating and management positions, contributing to the success

and transition of today’s NuStar organization.

96

Management Bios

Management Bios

Brad

Barron,

Senior

VP

-

General

Counsel

97

•

Brad Barron serves as Senior Vice President and General Counsel of NuStar

Energy L.P. and NuStar GP Holdings, LLC, both of which are headquartered in

San Antonio, TX.  As such, he provides legal counsel on all major transactions,

assures compliance with securities laws, provides legal counsel to the boards of

directors and principal officers, manages real estate and right-of-way issues, and

oversees health, safety and environmental compliance.

•

Prior to joining the company, Mr. Barron was with Valero Energy Corporation. 

Mr. Barron began his legal career with Vinson & Elkins LLP and continued in

private practice until he joined Valero in 2001. 

•

A committed volunteer, Mr. Barron is also active in the San Antonio community. 

He serves on the boards of directors of the Alamo Bowl and Family Service

Association, and he previously volunteered as a board member of the Boys and

Girls Club of San Antonio. 

•

Mr. Barron holds a B.B.A. from Texas Tech University and a J.D. from the

University of Texas School of Law.  In addition, Mr. Barron holds a M.L.A. from

St. John’s College.

Management Bios

Management Bios

Paul

Brattlof,

Senior

VP

-

Supply

and

Trading

98

•

Paul Brattlof

leads NuStar Energy L.P.’s Marketing, Supply and Trading organization,

which includes product supply and trading, wholesale marketing, heavy fuels trading

and asphalt marketing. 

•

Under Mr. Brattlof’s

leadership, this organization capitalizes on opportunities to optimize

the use and profitability of the company’s worldwide portfolio of assets, manages risk as

NuStar diversifies its business, and enhances the company’s competitive position when

pursuing acquisitions.

•

Mr. Brattlof

has more than two decades of experience in cash markets, futures markets

and derivatives trading.  Previously, he served as Vice President of Trading for Valero

Energy Corporation, where he worked for 10 years.  Prior to that, he spent 11 years with

Kerr-McGee Refining and two years with Mieco, a Long Beach-based trading company. 

A graduate

of

Rice

University,

Mr.

Brattlof

holds

a

Bachelor

of

Arts

degree

in

Managerial

Studies.   

Management Bios

Management Bios

Mike

Hoeltzel,

Senior

VP

-

Corporate

Development

•

Senior

Vice

President

of

Corporate

Development

for

NuStar

Energy

L.P.

•

Joined NuStar in February 2007 with 30 years refinery experience.

•

Valero

Energy's

Corporate

Development

Department

from

2000

to

2007.

Primary

responsibility

was

valuation

of

refinery

acquisitions

during

this

period

of

growth

from

6

to

19

refineries.

Also

supported

growth

of

Valero

L.P.

during

2002-2006

when

M&A

opportunities

for

both

companies

were developed in a common department.

•

Worked in

CITGO's Corpus Christi refinery from 1991-2000 in various Project Management,

Planning & Economics, and Strategic Planning positions.

•

Worked in Kerr-McKee's Corpus Christi refinery from 1977-1991 in Project Management and

Planning & Economics positions.

•

Worked

for

Exxon

in

Oil

Production

from

1971-1973

and

Dupont

from

1973-1977,

project

engineering assignments with both companies.

•

Graduated from Oklahoma State University in 1971 with BS and MS degrees in Mechanical

Engineering.

Also received MBA from Corpus Christi State University (now Texas A&M Corpus

Christi) in 1983

99

Management Bios

Management Bios

Danny Oliver, VP -

Marketing and Business Development

100

•

Danny

Oliver,

Vice

President

of

Marketing

&

Business

Development

for

NuStar

Energy

L.P., oversees the company’s commercial activities for its pipelines and terminals

business.  Previously, he served as Vice President of Product Supply & Trading for

NuStar

where he was instrumental in building the company’s successful trading

operations

from

the

ground

up.

He

brings

nearly

20

years

of

industry

experience

–

the

majority of which was spent trading energy commodities.

•

Prior to joining NuStar in 2007, Mr. Oliver spent 10 years at Valero Energy holding

management

positions

in

Product

Supply

&

Trading

where

he

helped

to

build

a

world-

class

refined

product

trading

organization

and

played

a

key

role

in

the

company’s

aggressive acquisition of refinery and logistics assets.  He previously worked at Enron

Corp. in the International Trading division where he was responsible for the company’s

worldwide MTBE and Methanol trading activities, and also held several positions at

Kerr-McGee

Refining

&

Marketing

in

products

scheduling

and

accounting,

with

an

emphasis in reporting and analyzing trading activities.

•

Mr. Oliver graduated from Texas State University with a B.B.A. in Accounting. 

Committed to the community in which he works and lives, Mr. Oliver currently serves on

the boards of directors of San Antonio Sports and the Harmony Ridge Association.  He

is also actively involved with his church and the United Way of Bexar County. 

Management Bios

Management Bios

Steve Hays, VP -

Strategic Planning

101

•

Steve Hays serves as Vice President of Strategic Planning for NuStar

Energy, L.P.

In addition to guiding the strategic planning for the

company’s margin-based businesses, his responsibilities include planning

and economics management for NuStar’s asphalt business.

•

Mr.

Hays

has

34

years

of

industry

experience,

including

25

years

in

the

refining industry.  He recently retired from CITGO Petroleum after 19

years, including six years on the management team of CITGO Asphalt

Refining Co.  Mr. Hays is a graduate of the Georgia Institute of

Technology with a bachelor’s degree in Chemical Engineering.

Management Bios

Management Bios

Mike Pesch, VP -

Refining Operations

•

26 years experience in oil industry across all segments:

•

2

years

at

NuStar

-

Midstream

and

now

Asphalt

Refining

•

18

years

CITGO/Valero

-

Refining

•

7

years

Exxon

-

Exploration

and

Production

•

Assignments included Operations, Maintenance, Planning and Economics, Project

Engineering,

Best

Technical

Practice

development

and

Strategic

Sourcing.

Positions

ranged from staff engineering roles to management, including Refinery Manager at

Valero's Paulsboro Refinery.

•

BS

Chemical

Engineering

in

1982

from

Rose

Hulman

Institute

of

Technology

102

Management Bios

Management Bios

Mike Stone, VP -

Asphalt Marketing

•

Vice President Asphalt Marketing, Supply & Trading of NuStar Energy LP. Responsible for

all asphalt commercial activities involving asphalt sales, purchases, exchanges and

import/export business.

•

Prior to his position at NuStar he was the Vice President of Asphalt Marketing at Valero

Energy Corporation for 9 years and launched their national asphalt marketing operations

from the U.S. East Coast through the Gulf Coast / Midcontinent regions to the West Coast

California markets.

•

Before joining Valero, Mike was Vice President of Asphalt Marketing for CITGO for 6 years

managing its East Coast asphalt operations.

•

Mike began his career in 1983 with CITGO Petroleum Corporation and spent 10 years in

gasoline wholesale rack marketing responsible for establishing and implementing the

unbranded

rack

sales

business

in

Texas,

Florida

and

southeastern

states

region.

•

Mike currently serves as a Director on the board of the Asphalt Institute and is a member of

the organization's Executive Committee. He also serves as an Associate Member of the

National Asphalt Pavement Association.

•

Received his B.B.A. in Finance from Texas State University in 1981.

103

Management Bios

Management Bios

Michael

Drager,

General

Manager

-

Paulsboro

Refinery

104

•

Michael Drager serves as the General Manager of the NuStar Asphalt Refining LLC’s

Paulsboro Refinery, located in Paulsboro, NJ.  As such, he manages all aspects of the

refinery’s operations, maintenance, capital projects, safety and environmental

compliance, quality assurance and security initiatives.

•

Mr. Drager has over 35 years of refining experience in Operations, Maintenance,

Health, Safety and Environmental, Training and Development, and has served as the

Refinery Manager for the past seven years.   

•

A committed volunteer, Mr. Drager currently serves as the President of the NuStar

Volunteer Council for the East Region, volunteers his time as a Paulsboro High School

mentor, and plans an annual Veterans Day ceremony to honor refinery employees,

retirees

and

community

veterans.

Mr.

Drager

serves

on

the

board

of

directors

for

the

United Way of Gloucester County and the Gloucester County College Foundation.  He

is also active in his hometown community, having served as past Chairman of

Woodstown’s Planning and Zoning Board. 

•

Mr. Drager received his undergraduate degree in Education from Rowan University and

his Master’s degree in Business from Widener University.  He also holds a certification

in Professional Human Resources Management.

Management Bios

Management Bios

Ron Corun, Manager -

Asphalt Technical Services

•

Worked in the HMA paving industry 42 years (started at age 13).

•

Performed virtually every task in paving construction: laborer, equipment operator,

asphalt plant operator, quality control and mix design technician (both Marshall and

Superpave), estimator, foreman, superintendent, general manager.

Employment

•

2008 –

Present NuStar Asphalt Refining, LLC

Asphalt Technical Support Manager Education

•

1997–

2007 CITGO Asphalt Refining Company

Technical Support Manager

•

1974 –

1996 Corun & Gatch, Inc.

Vice President & General Manager

•

1971

-

1974

University

of

Maryland

-

College

Park,

MDB.S.

in

Civil

Engineering

105

Refined Product Demand Outlook

Refined Product Demand Outlook

106

Key U.S. Demand Drivers

Gasoline

Price

Economy and Employment

Higher fuel economy standards for vehicles

Ethanol

Diesel and Jet Fuel

Economy

Source:  Purvin

& Gertz

107

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

2002

2003

2004

2005

2006

2007

2008

Income from continuing operations

55,143

$                

69,593

$                

78,418

$                

107,675

$              

149,906

$              

150,298

$              

254,018

$              

Plus interest expense, net

4,880

15,860

20,950

41,388

66,266

76,516

90,818

Plus income tax expense

395

-

-

4,713

5,861

11,448

11,006

Plus depreciation and amortization expense

16,440

26,267

33,149

64,895

100,266

114,293

135,709

EBITDA

76,858

111,720

132,517

218,671

322,299

352,555

491,551

Less equity earnings from joint ventures

3,188

2,416

1,344

2,319

5,882

6,833

8,030

Less interest expense, net

4,880

15,860

20,950

41,388

66,266

76,516

90,818

Less reliability capital expenditures

3,943

10,353

9,701

23,707

35,803

40,337

55,669

Less income tax expense

-

-

-

4,713

5,861

11,448

11,006

Plus mark-to-market impact on hedge transactions

-

-

-

-

-

3,131

(9,784)

Plus charges reimbursed by general partner

-

-

-

-

575

-

-

Plus distributions from joint ventures

3,590

2,803

1,373

4,657

5,141

544

2,835

Plus other non-cash items

-

-

-

2,672

-

-

-

Distributable cash flow

68,437

$                

85,894

$                

101,895

$              

153,873

$              

214,203

$              

221,096

$              

319,079

$              

Plus hedging loss in 2Q08

60,704

Distributable cash flow excluding hedging loss

379,783

$              

Note:  2005 and 2006 distributable cash flow and EBITDA are from continuing operations.

Year Ended December 31,

108

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.

Debt-to-EBITDA Reconciliation

March 31,2008

June 30, 2008

September 30, 2008

December 31, 2008

March 31,2009

Net income

175,044

$                            

149,437

$                            

249,501

$                            

254,018

$                            

237,504

$                            

  Plus interest expense, net

74,527

80,009

85,856

90,818

94,423

  Plus income tax expense

12,318

14,253

13,473

11,006

12,970

  Plus depreciation and amortization expense

116,997

123,967

129,576

135,709

141,652

EBITDA

378,886

367,666

478,406

491,551

486,549

  Less equity earnings from joint ventures

(7,423)

(7,426)

(7,935)

(8,030)

(8,142)

  Less other income, net

(42,116)

(25,647)

(15,152)

(37,739)

(36,434)

  Less mark-to-market impact on all derivative transactions

6,336

5,505

(3,811)

(9,781)

(4,005)

  Plus distributions from joint ventures

1,044

500

500

2,835

3,835

  Other adjustments allowed under debt agreements

142,708

109,906

72,908

36,492

5,219

EBITDA per debt agreements

479,435

450,504

524,916

475,328

447,022

  Plus hedging loss in 2Q08

60,704

60,704

60,704

60,704

Adjusted EBITDA per debt agreements

479,435

$                            

511,208

$                            

585,620

$                            

536,032

$                            

507,726

$                            

Total Consolidated Debt

2,203,298

$                         

2,182,813

$                         

2,051,486

$                         

1,894,848

$                         

1,924,210

$                         

  Less hedging loss in 2Q08

(60,704)

(60,704)

(60,704)

(60,704)

  Less equity offering proceeds, net of final CARCO payment

(89,252)

Total Adjusted Consolidated Debt

2,114,046

$                         

2,122,109

$                         

1,990,782

$                         

1,834,144

$                         

1,863,506

$                         

Debt Coverage Ratio

4.6x

4.8x

3.9x

4.0x

4.3x

Adjusted Debt Coverage Ratio

4.4x

4.2x

3.4x

3.4x

3.7x

Maximum Debt Coverage Ratio per debt agreements

5.5x

5.5x

5.0x

5.0x

5.0x

For the Twelve Months Ended

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

(Unaudited, Thousands of Dollars, Except Ratio)