STANOLIND TANK DAMAGE

12 Months Ended

Dec. 31, 2011

(17)	STANOLIND TANK DAMAGE

During the third quarter of 2011, a single tank fire occurred at the Partnership's Stanolind Terminal in Beaumont, Texas. This specific tank stores No. 6 oil for Martin Resource Management under a through-put agreement. The tank contained approximately 3,200 barrels of No. 6 oil at the time the incident occurred, all of which is the property of Martin Resource Management.

Physical damage to the Partnership's asset caused by the fire as well as the related removal and recovery costs, are fully covered by the Partnership's non-windstorm insurance policy subject to a deductible of $443, which has been expensed and included in “operating expenses” in the consolidated statements of operations for the year ended December 31, 2011.

Insurance proceeds received as a result of the this claim will be used to replace the tank and, in the event the proceeds exceed the net book value of the tank that was destroyed, the Partnership will recognize a gain equal to the amount of the excess.

The costs incurred to reconstruct tank No. 6 for the year ended December 31, 2011 was $678.