9.	RELATED-PARTY TRANSACTIONS

The Partnership leases asphalt facilities and provides asphalt terminalling services to Ergon. For the

three

months ended

September 30, 2018

and

2019

, the Partnership recognized related-party revenues of

$11.1

million and

$9.3

million, respectively, for services provided to Ergon. For the

nine

months ended

September 30, 2018

and

2019

, the Partnership recognized related-party revenues of

$38.6

million and

$27.2

million, respectively, for services provided to Ergon. As of

December 31, 2018

, and

September 30, 2019

, the Partnership had receivables from Ergon of

$1.0

million and

$1.8

million, respectively. As of

December 31, 2018

, and

September 30, 2019

, the Partnership had unearned revenues from Ergon of

$6.5

million and

$4.2

million, respectively.

Effective

April 1, 2018,

the Partnership entered into an agreement with Ergon under which the Partnership purchases crude oil in connection with its crude oil marketing operations. For the

three

months ended

September 30, 2018

and

2019

, the Partnership made purchases of crude oil under this agreement totaling

$44.4

million and

$32.8

million, respectively. For the

nine

months ended

September 30, 2018

and

2019

, the Partnership made purchases of crude oil under this agreement totaling

$74.9

million and

$98.6

million, respectively. As of

September 30, 2019

, the Partnership had payables to Ergon related to this agreement of

11.4

million related to the

September

crude oil settlement cycle, and this balance was paid in full on

October 21, 2019.

The Partnership and Ergon have an agreement (the “Agreement”) that gives each party rights concerning the purchase or sale of Ergon’s interest in Cimarron Express, subject to certain terms and conditions. Cimarron Express was planned to be a new

-inch diameter,

-mile crude oil pipeline running from northeastern Kingfisher County, Oklahoma to the Partnership’s Cushing, Oklahoma crude oil terminal, with an originally anticipated in-service date in the

second

half of

2019

. Ergon formed a Delaware limited liability company, Ergon - Oklahoma Pipeline, LLC (“DEVCO”), which holds Ergon’s

50%

membership interest in Cimarron Express. Under the Agreement, the Partnership has the right, at any time, to purchase

100%

of the authorized and outstanding member interests in DEVCO from Ergon for the Purchase Price (as defined in the Agreement), which shall be computed by taking Ergon’s total investment in Cimarron Express plus interest, by giving written notice to Ergon (the “Call”). Ergon has the right to require the Partnership to purchase

100%

of the authorized and outstanding member interests of DEVCO for the Purchase Price (the “Put”) at any time beginning the earlier of (i)

months from the formation,

May 9, 2018,

of the joint venture company to build the pipeline, (ii)

six

months after completion of the pipeline, or (iii) the event of dissolution of Cimarron Express. Upon exercise of the Call or the Put, the Partnership and Ergon will execute the Member Interest Purchase Agreement, which is attached to the Agreement as Exhibit B. Upon receipt of the Purchase Price, Ergon shall be obligated to convey

100%

of the authorized and outstanding member interests in DEVCO to the Partnership or its designee. As of

September 30, 2019

, neither Ergon nor the Partnership has exercised their options under the Agreement.

December 2018,

the Partnership and Ergon were informed that Kingfisher Midstream, LLC (“Kingfisher Midstream”) made the decision to suspend future investments in Cimarron Express as Kingfisher Midstream determined that the anticipated volumes from the currently dedicated acreage and the resultant project economics did

not

support additional investment from Kingfisher Midstream. As of

December 31, 2018,

Cimarron Express had spent approximately

$30.6

million on the pipeline project, primarily related to the purchase of steel pipe and equipment, rights of way and engineering and design services. Cimarron Express recorded a

$20.9

million impairment charge in the

fourth

quarter of

2018

to reduce the carrying amount of its assets to their estimated fair value. Ergon recorded a

$10.0

million other-than-temporary impairment on its investment in Cimarron Express as of

December 31, 2018,

to reduce its investment to its estimated fair value. As a result, the Partnership considered the SEC staff’s opinions outlined in SAB

107

Topic

5.T

Accounting for Expenses or Liabilities Paid by Principal Stockholders. The Agreement was designed to have the Partnership, ultimately and from the onset, bear any risk of loss on the construction of the pipeline project and eventually own a

50%

interest in the pipeline. As a result, the Partnership recorded on a push-down basis a

$10.0

million impairment of Ergon’s investment in Cimarron Express in its consolidated results of operations during the year ended

December 31, 2018,

and a contingent liability payable to Ergon as of

December 31, 2018.

April 2019,

certain assets from the project were sold to a

third

party for approximately

$1.4

million over the fair market value that was estimated at

December 31, 2018,

and the Partnership recorded its share, on a push-down basis, based on Ergon’s

50%

interest in the assets. Ergon’s interest in DEVCO includes its capital contributions, its share of the cash received for the assets sale discussed above and internal Ergon labor costs, which brings its investment in DEVCO to approximately

$10.4

million through

September 30, 2019

. During the

nine

months ended

September 30, 2019

, a change in estimate and accrued interest resulted in the Partnership recording additional impairment expense of

$2.0

million. The Partnership’s contingent liability as of

September 30, 2019

, consists of Ergon’s

$10.4

million investment plus accrued interest of

$1.7

million, of which

$0.4

million relates to the

three

months ended

September 30, 2019

September 5, 2019,

the management committee of Cimarron Express met and voted to terminate the project pipeline, wind up the business of Cimarron Express, distribute to its members the cash and assets of Cimarron Express, and thereafter dissolve the company. Ergon and Kingfisher Midstream are in the process of negotiating final agreements to windup the business, distribute the assets, and dissolve Cimarron Express.