P.M.I. TRADING LIMITED

                                                           SEPTEMBER 11, 1997.
                                                               DTIR-0242-1997.


TO:             PENN  OCTANE  CORPORATION
ATT'N:          MR.  J.B.  RICHTER
FAX:            (415)  368-1505


P.M.I. TRADING LIMITED, IS PLEASED TO CONFIRM THE "LPG MIX" CONTRACT PURCHASE,
ACCORDING  TO  THE  FOLLOWING  TERMS  AND  CONDITIONS:




                   
(1)  PMI ORDER NO.:      WILL BE INFORMED MONTH BY MONTH IN OUR FAX OPERATION.
                         PLEASE REFER IN ALL DOCUMENTS TO PMI'S REFERENCE NUMBER.

(2)  BUYER:              P.M.I. TRADING LIMITED
                         ----------------------------------------------------------

     ADDRESS:            AV. MARINA NACIONAL NO. 329
                         TORRE EJECUTIVA, PISO 20
                         COL. HUASTECA
                         11311 MEXICO, D.F.

     COMMERCIAL CONTACT
     ------------------                                                            

     NAME:               LEOPOLDO SIMON / LORENA ROSAS / RODRIGO ARANDA
     TELEPHONE No.:      (52-5) 227-0121 / 227-0169 / 227-0158
     TELEX No.:          1773671 / 1773509
     FAX No.:            (52-5) 227-0140 / (713) 567-0140

     OPERATIONS CONTACT
     ------------------                                                            

     NAME:               VICTOR GOMEZ / ELIN VAZQUEZ / TYRONE PRATS
     TELEPHONE No.:      (52-5) 227-0114 / 227-1049 / 227-0157
     TELEX No.:          1773871 / 1773509
     FAX No.:            (52-5) 227-0111 / (713) 567-0111

     FINANCIAL CONTACT
     ------------------                                                            

     NAME:               LUIS GARNICA / JUAN CARLOS CABALLERO / FRANCISCO CERVANTES
     TELEPHONE No.:      (52-5) 227-0073
     TELEX No.:          1773671 / 1773509
     FAX No.:            (52-5) 227-0072 / (713) 567-0072

(3)  SELLER:             PENN OCTANE CORPORATION

     ADDRESS:            12118 SOUTH BLOOMFIELD
                         SANTA FE SPRINGS, CA  90670

     COMMERCIAL CONTACT
     ------------------                                                            

     NAME:               MR. JORGE R. BRACAMONTES
     TELEPHONE No.:      (525) 667-6513 / 687-1189
     TELEX No.:          (525) 543-6837

     OPERATIONS CONTACT
     ------------------                                                            

     NAME:               MR. JOE MARTINEZ
     TELEPHONE No.:      (210) 831-9442
     FAX No.:            (210) 831-9447

     FINANCIAL CONTACT
     ------------------                                                            

     NAME:               MR. IAN BOTHWELL
     TELEPHONE No.:      (562) 929-1984
     FAX No.:            (562) 929-1921


(4)          GENERAL  AGREEMENT
             ------------------

     4.1.         SUBJECT TO ALL TERMS AND CONDITIONS OF THIS AGREEMENT, BUYER
SHALL  PURCHASE "LPG MIX" (AS HEREIN DEFINED) FROM SELLER AND SELLER AGREES TO
SELL  "LPG  MIX"  TO BUYER UNDER THE TERMS OF THIS AGREEMENT.  AS USED IN THIS
AGREEMENT,  "LPG  MIX"  IS  A  PROPANE/BUTANE PRODUCT MIXTURE CONSISTING OF 90
PERCENT  PROPANE  AND  10  PERCENT  COMMERCIAL  BUTANE.

     4.2.          COMMERCIAL  TERMS:
                   ------------------

     FCA  (FREE  CARRIER)  BROWNSVILLE, TEXAS AT PENN OCTANE'S LOADING RACK IN
ACCORDANCE  WITH  INCOTERM$  1990.

(5)          TERM
             ----

     UNLESS  EITHER  PARTY  BREACHES IT'S OBLIGATION UNDER THIS AGREEMENT, THE
TERM  SHALL  BE  ONE  YEAR  COMMENCING  ON OCTOBER 1ST, 1997 AND CONCLUDING ON
SEPTEMBER  30,  1998.

     IN  CASE SELLER OBTAINS LEGAL RIGHTS TO IMPORT PROPANE INTO MEXICO OR/AND
IF  BURGOS  BASIN  STARTS PRODUCING, THEN EITHER PARTY SHALL HAVE THE RIGHT TO
NOTIFY  THE OTHER PARTY ITS INTENTION TO BEGIN A RENEGOTIATION PROCESS OF THIS
CONTACT.    SUCH RENEGOTIATION PROCESS SHALL START NO LATER THAN 10 DAYS AFTER
THE  NOTIFICATION IS GIVEN.  RENEGOTIATION PROCESS CAN NOT ENDURE MORE THAN 80
DAYS.    IF  AN  AGREEMENT  IS  REACHED  DURING THE RENEGOTIATION PROCESS THIS
CONTACT  SHALL  BE  MODIFIED  BY  MUTUALLY AGREEMENT, OTHERWISE SHALL CONTINUE
UNTIL  ITS  TERMINATION.

(6)          VOLUMES
             -------

     6.1.     BUYER WILL SCHEDULE, PURCHASE AND ACCEPT AND SELLER WILL DELIVER
A  ANNUAL  VOLUME  OF  "LPG  MIX"  EQUAL TO 81,180,000 GALLONS +/- 15% BUYER'S
OPTION  COMPLYING  WITH  THE  FOLLOWING  MINIMUM  MONTHLY  VOLUMES:

     WINTER  SEASON          MINIMUM  7,500,000  GALLONS  PER  MONTH

     SUMMER  SEASON          MINIMUM  4,000,000  GALLONS  PER  MONTH

     SUCH  VOLUMES  TO  BE  REFERRED  HEREIN  AS  "MINIMUM  MONTHLY  VOLUME"
                                                   ------------------------

                  SEASONALITY IS DEFINED AS DESCRIBED BELOW:
                  ------------------------------------------

     WINTER  SEASON  IS COMPOSED BY THE MONTHS OF OCTOBER, NOVEMBER, DECEMBER,
     --------------
1997,  JANUARY,  FEBRUARY  AND  MARCH  1998.
     SUMMER SEASON IS COMPOSED BY THE MONTHS OF APRIL, MAY, JUNE, JULY, AUGUST
     -------------
AND  SEPTEMBER  1998.

     6.2.          NOTWITHSTANDING THE FOREGOING, BUYER MAY REQUEST ADDITIONAL
VOLUMES TO THE MINIMUM MONTHLY VOLUME, IN ANY MONTH, IN ACCORDANCE WITH CLAUSE
12  NOMINATION  OF  THIS AGREEMENT.  THEREFORE, SELLER SHALL MAKE AVAILABLE TO
BUYER  THE  ADDITIONAL  VOLUME  REQUESTED  AS  PROVIDED  HEREIN.

     6.3.         BUYER WILL SCHEDULE ITS LISTING OF "LPG MIX" WITH SELLER FOR
EACH  DELIVERY MONTH AT LEAST THREE WORKING DAYS BEFORE THE BEGINNING MONTH OF
DELIVERIES.

     6.4.          BUYER  WILL  ACCEPT  DELIVERY OF THE "LPG MIX" VIA TRUCK AT
SELLER'S  TERMINAL IN BROWNSVILLE, TEXAS (THE TERMINAL) AS SCHEDULED BY BUYER,
AS  LONG  AS  IT  MEETS  THE  SPECS  DESCRIBED  IN  ATTACHMENT  "A".

(7)          PRICE  OF  "LPG  MIX"
             ---------------------

     7.1.          PRICE  FORMULA FOR PROPANE AND BUTANE SHALL BE BASED ON THE
MONTHLY  AVERAGE  OF  THE  DELIVERY  MONTH,  AS  PUBLISHED  BY OPIS (OIL PRICE
INFORMATION  SERVICE)  UNDER MT. BELVIEU NON-TET SPOT POSTINGS FOR 90% PROPANE
AND 10% BUTANE, PLUS A SERVICE COST TO BE DETERMINED IN ACCORDANCE WITH CLAUSE
8  OF  THIS  AGREEMENT.

     7.2.     THE ESTIMATED PRICE FOR TEMPORARY INVOICING PURPOSES WILL BE THE
POSTING PRICE OF THE FIFTH DAY QUOTATIONS PRIOR OF THE DELIVERY MONTH PLUS THE
SERVICE  OF 0.0326 USD/GAL. AFTER DELIVERY MONTHS ENDS, AN ADJUSTMENT SHALL BE
MADE  (AS  DESCRIBED  IN PARAGRAPH 9.2 BELOW) SO AS TO REFLECT THE FINAL PRICE
COMPUTED  AS  PER  CLAUSE  7.1.

(8)          SERVICE  COST  DETERMINATION
             ----------------------------

     8.1.          WHEN  BUYER LIFTS THE MINIMUM MONTHLY VOLUME OR LESS OF THE
MINIMUM  MONTHLY  VOLUME,  BUYER  SHALL  PAY  TO  BUYER  A  SERVICE  COST  OF:

     (i)          USD              -  PER  MONTH  DURING WINTER SEASON MONTHS.
     (ii)          USD              -  PER  MONTH DURING SUMMER SEASON MONTHS.

     THESE  AMOUNTS REFLECT A SERVICE COST OF        USD/GAL. FOR EACH MINIMUM
MONTHLY  VOLUME.

     8.2          IF  BUYER LIFTS MORE VOLUME THAN THE MINIMUM MONTHLY VOLUME,
SCHEDULED AS PER SUBCLAUSE 6.2., THEN BUYER SHALL PAY TO SELLER A SERVICE COST
CORRESPONDING  TO  THE  DIFFERENTIAL VOLUME BETWEEN THE MINIMUM MONTHLY VOLUME
AND  THE  ACTUAL  VOLUME  LIFTED  (ATTACHMENT  "B").    SUCH  SERVICE COST FOR
ADDITIONAL  VOLUME  SHALL  BE  COMPUTED  AS  FOLLOWS:

     CSF  =                 LESS  ADJ.

     WHERE

     CSF  =  SERVICE  COST  FOR  ADDITIONAL  VOLUMES.
     ADJ  =  ADJUSTMENT  FOR  THE  INCREMENTAL  VOLUME.

     WHERE

     ADJ  =         USD/GAL   (        *  MMV)  /  2
                               --------------
                                    AVL

     THUS

     ADJ  =  (         (1  *  MMV)  /  2
                              ---
                              AVL

     THUS

     ADJ  =            (1  *  MMV)  /  2
                              ---
                              AVL

     WHERE

     MMV  =  MINIMUM  MONTHLY  VOLUME.
     AVL  =  ACTUAL  VOLUME  LIFTED  DURING  THE  DELIVERY  MONTH.

(9)          INVOICING
             ---------

     9.1.     SELLER WILL INVOICE BUYER EVERY WEEK FOR THE TOTAL VOLUME LOADED
DURING  THE  IMMEDIATELY  PRECEDING  WEEK.

     9.2.          THE  PRICE  PER  GALLON  INVOICED WILL BE, ACCORDING TO THE
ESTIMATED  PRICE AS DESCRIBED IN SUBCLAUSE 7.2.  THE ADJUSTMENT FOR THE ACTUAL
PRICE  AND SERVICE COST SHOULD BE INVOICED THROUGH DEBIT/CREDIT NOTES TO BUYER
IN  THE  FIRST  WEEK  OF  THE  FOLLOWING  MONTH  TO  DELIVERY  MONTH.

     9.3.        ALL THE INVOICES MUST COMPLY WITH BUYER'S TREASURY DEPARTMENT
INSTRUCTIONS  AND SHALL BE SENT TO THE ATTENTION OF LUIS GARNICA / JUAN CARLOS
CABALLERO.

(10)          PAYMENT  TERMS
              --------------

     FULL NET CASH IN U.S. DOLLARS PAYABLE WITH 12 DAYS AFTER ORIGINAL INVOICE
IN  HARD  COPY  IS  RECEIVED BY BUYER IN ITS OFFICES, TREASURY DEPARTMENT (AV.
MARINA  NACIONAL  329,  TORRE  EJECUTIVA  PISO  20).

     A  FAX  TRANSMISSION  OF  THE CORRESPONDING INVOICE WILL BE ACCEPTABLE TO
BUYER  IN  ORDER TO REVIEW IT AS SOON AS POSSIBLE AND TO ASSURE PROMPT PAYMENT
AS  OUTLINED  IN THE ABOVE PARAGRAPH TO SELLER, IN ACCORDANCE WITH THE PAYMENT
TERMS  HEREIN  AGREED.   HOWEVER, ORIGINAL INVOICE MUST BE RECEIVED AT LEAST 7
DAYS  PRIOR  TO  PAYMENT  DUE  DATE.

     IN  CASE  THAT  THE  PAYMENT  DATE FALLS ON A SUNDAY OR HOLIDAY, THEN THE
PAYMENT  DATE  WILL  BE  THE NEXT WORKING DATE.  IN CASE THAT THE PAYMENT DATE
FALLS  ON  A  SATURDAY,  THEN THE PAYMENT DATE WILL BE THE PRIOR WORKING DATE.

(11)          OFFICE  EXPENSE
              ---------------

     BUYER  SHALL  PAY TELEPHONE, TELEFAX AND SECRETARIAL EXPENSES INCURRED BY
ITS  REPRESENTATIVES  SUPERVISING  RECEIPT  OF THE "LPG MIX" DELIVERIES AT THE
TERMINAL.  BUYER SHALL ARRANGE, AT ITS COST, FOR TELEPHONE AND COPIER SERVICE,
AND SHALL SET UP ITS OWN CREDIT AND DIRECT PAYMENT FOR THOSE SERVICES.  ANY OF
ABOVE  EXPENSES  OF  BUYER THAT ARE PAID BY SELLER SHALL BE INVOICED BY SELLER
AND  SHALL  BE PAID BY BUYER SEVEN BUSINESS DAYS AFTER RECEIPT OF THE INVOICE.
IF  THE SEVENTH BUSINESS DAY IS A WEEKEND OR HOLIDAY, PAYMENT SHALL BE MADE ON
THE  NEXT  BUSINESS  DAY.

(12)          NOMINATION
              ----------

     EXCEPT  FOR  THE  SCHEDULE  OF  THE  "MINIMUM  MONTHLY  VOLUME"  OF  THIS
AGREEMENT,  AT LEAST FIFTEEN (15) DAYS PRIOR TO EACH MONTH, BUYER SHALL SUBMIT
TO  SELLER  AN ADDITIONAL VOLUME REQUEST.  BESIDES, BUYER SHALL PROVIDE SELLER
WITH  A  THREE  MONTH  FORECAST NOMINATION, FOR VOLUMES TO BE SCHEDULED WITH A
RANGE  OF  +/-  15%  BUYER'S  OPTION.  SELLER WILL ACCEPT AND DELIVER TO BUYER
ADDITIONAL  VOLUME  REQUEST  AT  LEAST  BETWEEN THE 15% RANGE OF BUYER'S THREE
MONTH  FORECAST.

(13)          SCHEDULE  OF  SERVICE
              ---------------------

     13.1.     SELLER WILL PROVIDE LOADING SERVICES AT THE TERMINAL SEVEN DAYS
A WEEK, TWENTY-FOUR HOURS PER DAY.  HOWEVER, HOURS OF SERVICE SHALL BE SUBJECT
TO AVAILABILITY OF BUYER'S AUTHORIZED PERSON(S) TO DISPATCH THE "LPG MIX" FROM
THE  TERMINAL.

     13.2.        SELLER WILL PROVIDE BUYER A DAILY ACTIVITY REPORT SPECIFYING
THE  QUANTITY  (WEIGHT  AND  VOLUME) AND QUALITY OF THE "LPG MIX" DELIVERED TO
BUYER  AT  THE  TERMINAL,  AS  PER  INDEPENDENT  INSPECTOR  REPORTS.

(14)          QUALITY
              -------

     THE  "LPG  MIX"  SHALL  MEET  THE  SPECIFICATIONS ATTACHED AS EXHIBIT "A"

(15)          MEASUREMENT
              -----------

     15.1         THE QUANTITY OF PRODUCT DELIVERED SHALL BE DETERMINED BY NET
WEIGHT,  AND  FOR  PAYMENT  PURPOSES, THE WEIGHT OF THE "LPG MIX" DELIVERED TO
BUYER  WILL  BE CONVERTED TO VOLUME (CORRECTED TO 60F) VIA ANALYSIS OF SAMPLES
USING  A GAS CHROMATOGRAPH.  THE CHROMATOGRAPH MUST BE CALIBRATED ACCORDING TO
THE  ASTM  AND  GPA  PROCEDURES.    BUYER AND SELLER WILL CAUSE AN INDEPENDENT
INSPECTOR,  MUTUALLY AGREED BY THE PARTIES, TO SAMPLE AND ANALYZE EACH LOAD OF
THE  "LPG  MIX".    THE  COST  OF  SUCH  INSPECTIONS  WILL BE BORNED BY BUYER.

     15.2.      BEFORE ENTERING THE TERMINAL, EMPTY TRUCKS WILL BE WEIGHTED AT
THE  PORT  OF BROWNSVILLE PUBLIC SCALES OR OTHER SCALE MUTUALLY AGREED BY BOTH
PARTIES.  LOADED TRUCK WILL BE WEIGHTED AT THE SAME SCALE UPON DEPARTURE.  THE
VOLUME  OBTAINED  BY  THE DIFFERENTIAL BETWEEN THESE TWO MEASUREMENTS SHALL BE
THE  VOLUME  TO  BE  INVOICED  BY SELLER AND PAID BY BUYER.  THE SCALE WILL BE
TESTED  AND  ADJUSTED  TO ACCURACY AT LEAST ONCE EVERY 30 DAYS OR ACCORDING TO
GOVERNMENT  REGULATIONS.    THE  COSTS  OF WEIGHING THE TRUCK BEFORE AND AFTER
LOADING,  AND/OR  IF A THIRD PARTY IS REQUIRED TO TEST OR CALIBRATE THE SCALE,
WILL  BE  SHARED  BY  THE PARTIES ON A 50%/50% BASIS.  IF SELLER, AT ANY TIME,
INSTALLS  SCALES  AT  THE TERMINAL, THEY WILL THEREAFTER BE THE SCALES FOR ALL
TRUCKS  RECEIVING  "LPG  MIX" AT THE TERMINAL, AND THEY SHOULD BE OPERATED AND
MAINTAINED  IN  ACCORDANCE  WITH  THE  ABOVE  PROVISIONS.  THE CHARGE FOR SUCH
SCALES  SHALL  BE  1005  FOR  SELLERS  ACCOUNT.

     IF SELLER'S SCALE IS USED, THEN BUYER SHALL HAVE THE RIGHT TO SEND TRUCKS
TO  AN  INDEPENDENT  SCALE  IN  A RANDOMLY BASIS EVERY WEEK, IN ORDER TO CHECK
SELLER'S  SCALE  ACCURACY.    COST  OF  INDEPENDENT  SCALE SHALL BE ON BUYER'S
ACCOUNT.

(16)          TITLE  AND  RISK
              ----------------

     TITLE AND RISK OF LOSS OF THE "LPG MIX" WILL PASS FROM SELLER TO BUYER AT
OUTLET  FLANGE  OF THE TRUCK AT THE LOADING RACKS LOCATED AT THE TERMINAL.  AT
SUCH  POINT,  THE  "LPG  MIX"  SHALL  BE  DEEMED  TO  BE  DELIVERED.

(17)          LAW  AND  ARBITRATION
              ---------------------

     THE AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.  ALL DISPUTES ARISING OUT OF OR RELATING TO THE
AGREEMENT SHALL BE SETTLED BY FINAL ARBITRATION IN THE STATE OF NEW YORK, CITY
OF N.Y. CONDUCTED IN ACCORDANCE WITH THE RULES OF CONCILIATION AND ARBITRATION
OF  THE  INTERNATIONAL CHAMBER OF COMMERCE IN EFFECT AT SUCH TIME.  THE NUMBER
OF  ARBITRATORS  SHALL  BE  THREE.

(18)          SPILL/ENVIRONMENTAL  POLLUTION
              ------------------------------

     IN  THE  EVENT  OF  ANY  "LPG MIX" SPILL OR OTHER ENVIRONMENTAL POLLUTING
DISCHARGE  OCCURS  PRIOR  TO DELIVERY, AS THE SAME IS DEFINED IN ARTICLE 16 OF
THIS  AGREEMENT,  ALL  CLEAN-UP  OPERATIONS  THAT  MAY  BE  REQUIRED  BY  ANY
GOVERNMENTAL  AUTHORITIES,  SHALL  BE  FOR  SELLER'S  ACCOUNT.

     IF SUCH SPILL OR ENVIRONMENTAL POLLUTING DISCHARGE OCCURS AFTER DELIVERY,
AS  THE  SAME  IS  DEFINED  IN  ARTICLE  16  OF  THIS  AGREEMENT, ALL CLEAN-UP
OPERATIONS  THAT  MAY  BE  REQUIRED,  SHALL  BE  FOR  BUYER'S  ACCOUNT.

     IN  THE  EVEN THAT SUCH SPILL OR ENVIRONMENTAL POLLUTING DISCHARGE OCCURS
AFTER  DELIVERY,  AT  THE  TERMINAL,  BUYER  AUTHORIZES  SELLER  TO  COMMENCE
CONTAINMENT  OR  CLEAN-UP  OPERATIONS  AS  DEEMED  APPROPRIATE OR NECESSARY BY
SELLER  OR  AS  MAY  BE REQUIRED BY ANY GOVERNMENTAL AUTHORITIES.  SELLER WILL
NOTIFY  BUYER  IMMEDIATELY OF SUCH OPERATIONS.  SELLER SHALL HAVE THE RIGHT TO
DIRECT  ALL CONTAINMENT AND CLEAN-UP OPERATIONS.  ALL COSTS OF CONTAINMENT AND
CLEAN-UP  FOR SUCH SPILL WILL BE BORNE BY BUYER, AND BUYER SHALL INDEMNIFY AND
HOLD  SELLER HARMLESS FROM ANY AND ALL EXPENSES, CLAIMS, LIABILITIES, DAMAGES,
PENALTIES,  FINES  AND  OTHER  COST  (INCLUDING, WITHOUT LIMITATION, ATTORNEYS
FEES)  RESULTING  OR  RELATED  TO  SUCH  INCIDENT.  FOLLOWING THE INDEMNITY OF
SELLER BY BUYER, SELLER WILL COOPERATE WITH BUYER FOR THE PURPOSE OF OBTAINING
REIMBURSEMENT  IN  THE  EVENT  THAT  ANY  NON-AGENT  THIRD  PARTY  IS  LEGALLY
RESPONSIBLE  FOR  ANY  COSTS  OR EXPENSES BORNE BY BUYER UNDER THIS PARAGRAPH.

     IN  THE EVENT THAT SUCH SPILL OR ENVIRONMENTAL POLLUTING DISCHARGE OCCURS
AFTER  DELIVERY,  OUT  OF THE TERMINAL, BUYER MAY AUTHORIZE SELLER TO COMMENCE
CONTAINMENT  OR  CLEAN-UP  OPERATIONS  AS  DEEMED  APPROPRIATE OR NECESSARY BY
SELLER  OR  AS  MAY  BE REQUIRED BY ANY GOVERNMENTAL AUTHORITIES.  SELLER WILL
NOTIFY  BUYER  IMMEDIATELY OF SUCH OPERATIONS.  SELLER SHALL HAVE THE RIGHT TO
DIRECT  ALL CONTAINMENT AND CLEAN-UP OPERATIONS.  ALL COSTS OF CONTAINMENT AND
CLEAN-UP  FOR SUCH SPILL WILL BE BORNE BY BUYER, AND BUYER SHALL INDEMNIFY AND
HOLD  SELLER HARMLESS FROM ANY AND ALL EXPENSES, CLAIMS, LIABILITIES, DAMAGES,
PENALTIES,  FINES  AND  OTHER  COST  (INCLUDING, WITHOUT LIMITATION, ATTORNEYS
FEES)  RESULTING  OR  RELATED  TO  SUCH  INCIDENT.  FOLLOWING THE INDEMNITY OF
SELLER BY BUYER, SELLER WILL COOPERATE WITH BUYER FOR THE PURPOSE OF OBTAINING
REIMBURSEMENT  IN  THE  EVENT  THAT  ANY  NON-AGENT  THIRD  PARTY  IS  LEGALLY
RESPONSIBLE  FOR  ANY  COSTS  OR EXPENSES BORNE BY BUYER UNDER THIS PARAGRAPH.

(19)          SAFETY
              ------

     BUYER  WILL  COMPLY,  AND WILL CAUSE BUYER'S EMPLOYEES, AGENTS AND OTHERS
ENTERING  THE  TERMINAL ON BEHALF OF BUYER TO COMPLY, WITH ALL TERMINAL SAFETY
AND HEALTH REGULATIONS.  SELLER WILL EXECUTE IN ITS NAME, PAY FOR, AND FURNISH
TO  BUYER  PRIOR  TO  ACCEPTING ANY "LPG MIX" AT THE TERMINAL, ALL INFORMATION
(INCLUDING  APPLICABLE  MATERIAL  DATA  SHEETS),  DOCUMENTS, LABELS, PLACARDS,
CONTAINERS, AND OTHER MATERIALS WHICH MAY BE REQUIRED TO BE FURNISHED BY BUYER
BY STATUTES, ORDINANCES, RULES OR REGULATIONS OF ANY PUBLIC AUTHORITY RELATING
TO THE DESCRIBING, PACKAGING, RECEIVING, STORING, HANDLING, OR SHIPPING OF THE
"LPG  MIX"  AT  OR  FROM  THE  TERMINAL.

(20)          FORCE  MAJEURE
              --------------

     NEITHER  PARTY SHALL BE LIABLE FOR FAILURE OR DELAY IN THE PERFORMANCE OF
THIS  AGREEMENT DUE TO ACTS OF GOD, EARTHQUAKE, FLOOD, FIRE, WAR, HOSTILITIES,
CIVIL  COMMOTIONS,  GOVERNMENTAL  ACTS,  STRIKES,  TRANSPORTATION  PROBLEMS,
PIPELINE  STOPPED  DUE  TO  LEAK  OR  EXPLOSION AND ANY OTHER CAUSE BEYOND THE
CONTROL  OF  EITHER  OF  THE  PARTIES.

     ANY  PARTY  CLAIMING FORCE MAJEURE SHALL PROMPTLY NOTIFY THE OTHER OF THE
OCCURRENCE  OF  THE  EVENT  OF  FORCE  MAJEURE  RELIED  UPON.

     EVENTS  OF  FORCE  MAJEURE  SHALL  NOT  RELIEVE ANY PARTY FROM MAKING ANY
PAYMENT  FOR  PRODUCT  DELIVERED  AND/OR  SERVICE  RENDERED  HEREUNDER.

(21)          LIMITATION  OF  LIABILITY
              -------------------------

     SELLER  SHALL  NOT BE LIABLE FOR MORE THAN THE ACTUAL COST TO REPLACE ANY
"LPG  MIX"  NOT  DELIVERED HEREUNDER.  SELLER SHALL NOT BE LIABLE TO BUYER FOR
SPECIAL,  INDIRECT  OR  CONSEQUENTIAL  DAMAGES.

(22)          MISCELLANEOUS
              -------------

     22.1.          AMENDMENTS,  WAIVER.  THIS AGREEMENT MAY NOT BE CHANGED OR
                    -------------------
MODIFIED,  EXCEPT IN WRITING BY MUTUAL AGREEMENT OF BOTH PARTIES.  THE FAILURE
OF  ANY  PARTY  TO ENFORCE ANY OF THE PROVISIONS OF THIS AGREEMENT WILL NOT BE
CONSTRUED  TO BE A WAIVER OF THOSE PROVISIONS, OR A WAIVER OF THE RIGHT OF ANY
PARTY  TO  ENFORCE  THEM.

     22.2.     SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS DETERMINED
               ------------
TO  BE  INVALID OR UNENFORCEABLE, THE REMAINDER OF THIS AGREEMENT SHALL REMAIN
IN  FULL  FORCE  AND  EFFECT.

     22.3.         ASSIGNMENT.  NEITHER PARTY MAY ASSIGN THIS AGREEMENT OR ANY
                   ----------
PORTION  OF  IT  WITHOUT  THE  PRIOR  WRITTEN  CONSENT  OF  THE  OTHER  PARTY.

     22.4.         OTHER TERMS AND CONDITIONS.  WHERE NOT IN CONFLICT WITH THE
                   --------------------------
ABOVE, INCOTERMS 1990 FOR FCA TRANSACTIONS WITH LATEST AMENDMENTS SHALL APPLY.

     THE  UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS  SHALL  NOT  APPLY  TO  THIS  CONTRACT.

     22.5.          ENTIRE  AGREEMENT.   THIS AGREEMENT CONSTITUTES THE ENTIRE
                    -----------------
AGREEMENT  AMONG  THE  PARTIES  AND  SUPERSEDES  ALL  PREVIOUS  NEGOTIATIONS,
COMMITMENTS  AND  WRITINGS  WITH  RESPECT  TO  SUCH  SUBJECT  MATTER  OF  THIS
AGREEMENT.
(23)          CONFIDENTIALITY
              ---------------

     THIS  AGREEMENT  TO BE HELD STRICTLY PRIVATE AND STRICTLY CONFIDENTIAL BY
ALL  PARTIES  INVOLVED.


     IF  THIS  MEETS  WITH YOUR UNDERSTANDING AND APPROVAL, PLEASE SIGN IN THE
APPROPRIATE  SPACE.




            BUYER                                     SELLER



 /s/ ROSENDO  ZAMBRANDO                       /s/ J.B.  RICHTER
 ----------------------                       -----------------
     ROSENDO  ZAMBRANDO                           J.B.  RICHTER
     PMI  TRADING  LIMITED                  PENN  OCTANE  CORPORATION








                                  EXHIBIT "A"



GPM MIX CHARACTERISTICS          MAX       TEST METHODS
                                 
COMPOSITION
PROPANE/BUTANE 90/10 PCT OF VOL

ETHANE                            2.0  PCT. VOL. OF PROPANE
PROPYLENE                         5.0  PTC. VOL. OF PROPANE
PENTANES & HEAVIES                2.0  PCT. VOL. OF BUTANE
VAPOR PRESSURE                    190  ASTM D-1267-75
CHROMATOGRAPH ANALYSIS                 ASTM D-2163
SPECIFIC GRAVITY                       ASTM D-1657
CORROSION COOPER STRIP AT 100
     F.DEG.                        1B  ASTM D-1638-74
OTHER DELETERIONS SUBSTANCES     NONE



                                  EXHIBIT "B"

PRICE  FORMULA  AND  SERVICE  COST  DETERMINATION

Month:
              ---------------------------------
PMI Order No:
              ---------------------------------

Price  formula  for  C3  AND  C4  shall be based on the monthly average of the
delivery  month,  published  by OPIS Mont Belvieu NON-TET spot posting for 90%
Propane  and  10%  Butane,  plus  the  service  cost

A)  Estimated  price  for  Invoice:      The fifth day quotations prior of the
delivery  month,  plus  the  service  cost

Calculation  date,  for  the  Estimated  Price  Invoice:
                                                             0-Jan-00
                                                            ---------
Propane price          0.9  Butane price 0.1
USCTS/GAL     USD/GAL          USD/GAL       USD/GAL    SC
0.000         0.00000           0.000        0.00000                   USD/GAL
                                                                              

B)    CLAUSE  8.2  Service  Cost  Formula, if buyer lift more than the minimum
monthly  volume:

Formula:  CSF =      5USD/GAL  -  ADJ
Where:                               CSF:  Service Cost for Additional Volume.
                                     ADJ:  Adjustment for the Incremental
                                           Volume  Lifted.
Where:    ADJ = [      USD/GAL -(       - MMV)] /2
                                          ---
                                          AVL

     Where:  MMV:  Minimum  Monthly  Volume
             AVL:  Actual  Volume  Lifted  duringthe  delivery Month
MMV Minimum Monthly Volume    7,500,000        GAL
AVL Actual Volume Lifted:             0        GAL
Service Cost Minimum Volume:               USD/GAL
Propane Monthly Average:          0.000  USCTS/GAL  For 90 %  0.00000  USD/GAL
Butane Monthly Average:           0.000  USCTS/GAL  For 10 %  0.00000  USD/GAL
COMMODITY  PRICE  FORMULA                                     0.00000  USD/GAL

CSF  SERVICE  COST  FORMULA
- ---------------------------
ADJ (           *[MMV/AVL] * 1  EQUAL TO  +           EQUAL    CSF
                   #DIV/01      #DIV/01                       #DIV/01  USD/GAL
                                           GALLONS USD/GAL
PRICE FOR MINIMUM MONTHLY VOLUME:        7,500,000                     USD
PRICE FOR ACTUAL VOLUME LIFTED:         -7,500,000 #DIV/01 #DIV/01     USD
PRICE IN USD/GAL FOR THE CURRENT MONTH:                    #DIV/01     USD/GAL
TOTAL PRICE FOR THE CURRENT MONTH:            0.00         #DIV/01     USD