EXHIBIT 99.3

                           PHANTOM MLP UNIT AGREEMENT


         This Agreement is made by and between Plains Holdings Inc., formerly
known as Plains All American Inc. (the "Company"), and Greg L. Armstrong (the
"Grantee").

         WHEREAS, the Grantee holds unvested stock options (the "Unvested
Options") with respect to common stock of Plains Resources Inc. granted to him
pursuant to the Plains' 1996 Stock Incentive Plan (the "1996 Plan"); and

         WHEREAS, the Grantee will become an employee of Plains All American GP
LLC (the "GP LLC") and such Unvested Options shall terminate; and

         WHEREAS, the Company desires to grant the Grantee Phantom MLP Units
with tandem DERs to replace the Unvested Option;

         NOW, THEREFORE, in consideration of these premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Grant. The Company hereby grants to the Grantee 8,548 Phantom MLP
         Units with an equal number of tandem distribution equivalent rights
         ("DERs"). A Phantom MLP Unit is a right to receive, upon vesting as
         provided below, a subordinated unit of Plains All American Pipeline,
         L.P. (the "MLP") (or, to the extent such subordinated units have been
         converted into common units, in common units of the MLP ("Units")). A
         tandem DER is a right to receive an amount in cash equal to the
         distributions made by the MLP with respect to a Unit during the period
         beginning on June 30, 2001 and ending on the later of the date the
         tandem Phantom MLP Unit becomes vested or paid, as provided below.

         2. Terms of Phantom MLP Units/DERs.

                  (a) Subject to the further provisions below, the Phantom MLP
                  Units will become vested (payable) as follows:

<Table>
<Caption>
                                    Units                    Vesting Date
                                    -----                    ------------
                                                       
                           (i)      5,438                       3/19/02
                           (ii)     3,110                       4/15/02
</Table>


                  (b) In the event of the Grantee's termination of employment
                  with the GP LLC and its affiliates for any reason other than
                  his death or a "disability", as defined in the 1996 Plan
                  ("Disability"), all of his then outstanding Phantom MLP Units
                  granted pursuant to this Agreement and not then vested shall
                  automatically be forfeited unpaid as of the Grantee's date of
                  termination.





                  (c) In the event of the Grantee's termination of employment
                  with the GP LLC and its affiliates due to his death or
                  Disability, all of his Phantom MLP Units shall immediately
                  vest.

                  (d) Vested Phantom MLP Units will be paid on each vesting
                  date. "Paid" or "payment" refers to transfer of record
                  ownership.

                  (e) Tandem DERs with respect to the Phantom MLP Units will be
                  credited (without interest), as of the record date of any
                  distribution made by the MLP, to a ledger account (the "DER
                  Account") for the benefit of the Grantee and upon payment of
                  any vested Phantom MLP Units (including any vested units
                  withheld pursuant to Section 3 below), the amounts then
                  credited to the DER Account with respect to such vested units
                  will be paid to the Grantee in cash. Any amount credited to
                  the DER Account with respect to unvested MLP Phantom Units
                  will be forfeited if and at the time such tandem MLP Phantom
                  Units are forfeited.

                  (f) The Phantom MLP Units and tandem DERs may not be assigned,
                  pledged, encumbered or alienated in any manner by the Grantee,
                  other than by will or the laws of descent and distribution.

         3. Taxes. Upon the payment of the Phantom MLP Units and DERs, the
         Company will cause all taxes due as required by applicable law to be
         withheld. The Grantee may elect to have such taxes and any additional
         taxes withheld by withholding a number of Units otherwise payable to
         the Grantee.

         IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of June 30, 2001.



                                        PLAINS HOLDINGS INC.

                                        (F/K/A PLAINS ALL AMERICAN INC.)



                                        By
                                           -------------------------------------



                                        GRANTEE


                                        ----------------------------------------
                                        Greg L. Armstrong



                                      -2-