NuStar Energy L.P. Completes Acquisition of CITGO Asphalt Refining Company’s Asphalt Operations and Assets

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March 20, 2008

NuStar Energy L.P. (NYSE: NS) today announced that it has successfully completed its acquisition of CITGO Asphalt Refining Company’s asphalt operations and assets for $450 million, plus inventory of approximately $360 million subject to post-closing adjustment. With the capacity to produce and market over 36 million barrels of asphalt and light products, the partnership is now No. 1 in terms of supplying the U.S. market and No. 3 in U.S. asphalt production. The acquisition is expected to earn the company a place on the Fortune 500 list for the first time.

The assets acquired by NuStar Energy L.P. include a 74,000 barrel-per-day (BPD) asphalt refinery in Paulsboro, New Jersey; a 30,000 BPD asphalt refinery in Savannah, Georgia, which is the only refinery and asphalt producer on the Southeast seaboard; and three asphalt terminals. Combined, these assets contribute an additional 4.8 million barrels of storage capacity giving NuStar over 86 million barrels of total storage capacity, which makes the partnership the second largest independent liquids terminal operator in the U.S. NuStar also gains access to 15 terminals with a total storage capacity of approximately 2.1 million barrels that are leased from various third parties.

In connection with the acquisition, NuStar Energy L.P. has entered into supply agreements with Petróleos de Venezuela S.A. (“PDVSA”), which includes a commitment by PDVSA to supply NuStar Energy L.P. an annual average of 75,000 BPD of crude oil over a minimum seven-year period and a right of first offer to purchase up to nearly 11,000 BPD of paving-grade asphalt and approximately 13,000 BPD of roofing-flux asphalt each year for marketing and sale.

“We’re excited to have completed this acquisition as we now have a leading presence in one of the most attractive asphalt markets in the country and a solid footing in what we see as a great business going forward,” said Bill Greehey, Chairman of NuStar Energy L.P. and NuStar GP Holdings, LLC. “As we’ve said before, this is a great acquisition for our investors, the employees and the communities where these assets are located.

“We are purchasing some very strategic assets for around 50 percent of their replacement value and we’re expecting them to make a significant contribution to our earnings. The attractive fundamentals we see in the asphalt business are expected to lead to higher asphalt margins over time, and NuStar is now in a great position to benefit from these fundamentals.

There are a lot of U.S. coker projects on the horizon, and because these coker units process more of the byproducts that are used to produce asphalt, we expect the supply of asphalt will tighten and asphalt margins will increase. So we expect we’ll be able to take advantage of coker margins without having to invest in a coker,” said Greehey.

“Over the last few months, we have been busy preparing for the closing of this acquisition and are confident that it will be a smooth transition,” said Curt Anastasio, CEO and President of NuStar Energy L.P. and NuStar GP Holdings, LLC. “NuStar is well-positioned to maximize the profitability of these refineries as we have an extensive refining knowledge base. In addition, we are enthusiastic about the many high return projects we have identified that weren’t in our original economics and should increase the operational efficiency of both refineries.

“This acquisition will complement our existing asphalt marketing and terminals business, give us exposure to one of the best asphalt markets in the U.S., diversify our customer base and expand our geographic presence. We also expect this acquisition will be accretive to cash flows and earnings, enhancing our ability to make further distribution increases. After we’ve had a chance to more fully integrate these assets, we look forward to sharing more information on the economics of the acquisition and the opportunities we have to grow this part of the business,” said Anastasio.

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