What changed in this filing

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Item 1. Business

2024-02-21 compared with 2023-03-02 · 119 added, 188 removed, 509 unchanged (38% of the section changed)

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Risk Factors - Risks Related to our Business."

We are a publicly traded limited partnership with a diverse set of operations focused primarily primarily in the Gulf Coast region of the United States ("U.S.").

We are a publicly traded limited partnership with a diverse set of operations focused primarily in the Gulf Coast region of the United States ("U.S.").

Our four primary business lines include:

• Terminalling, processing, storage and packaging services for petroleum products and by-products, including the refining of naphthenic crude oil;

• Terminalling, processing, and storage services for petroleum products and by-products;

• Land and marine transportation services for petroleum products and by-products, chemicals, and specialty products;

• Sulfur and sulfur-based products processing, manufacturing, marketing, and distribution;

• Natural gas liquids ("NGL") marketing, distribution, and transportation services.

• Marketing, distribution, and transportation services for natural gas liquids ("NGL") and blending and packaging services for specialty lubricants and grease.

Our vertically integrated services have created long-standing relationships with a diversified customer base that includes major and independent oil and gas companies, independent refiners, chemical companies, and other wholesale purchasers of certain petroleum products and by-products, with significant business concentrated around the U.S.

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with aggregate storage capacity of 2.6 million barrels.

We provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products, including the refining of naphthenic crude oil and the blending and packaging of various grades and quantities of industrial, commercial, and automotive lubricants and greases.

Further, we own approximately 2.3 million barrels of underground storage capacity for NGLs.

We store NGLs for wholesale deliveries to refineries, industrial NGL users and propane retailers in the southern U.S.

We provide storage, refining, and handling services for producers and suppliers of petroleum products and by-products, including the refining of naphthenic crude oil.

Our facilities and resources provide us with the ability to handle various products that require specialized treatment, such as molten sulfur and asphalt.

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We provide these terminalling and storage services on a fixed-fee basis and a significant portion of the contracts in this segment provide for minimum fee arrangements that are not based on the volumes handled.

We believe that our terminalling, processing, storage and packaging services for petroleum products and by-products would be difficult for our customers or competitors to replicate.

We believe that our terminalling, processing and storage for petroleum products and by-products would be difficult for our customers or competitors to replicate.

• Transportation.

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supply and access to foreign demand.

• Natural Gas Liquids.

• Specialty Products.

We own and operate facilities dedicated to both the blending and packaging of private label agricultural, automotive, and industrial lubricants, and the manufacture and packaging of commercial and industrial greases.

We sell and distribute NGLs that we primarily purchase from refineries and natural gas processors.

We store and transport NGLs for wholesale deliveries to refineries, industrial NGL users and propane retailers in the southeastern U.S.

We own approximately 2.2 million barrels of underground storage capacity for NGLs.

This segment has historically been driven primarily by the purchase of butane in the summer months, when demand is typically low, and sale in the winter months, when demand is typically higher (“butane optimization business”).

However, in an effort to reduce borrowing costs, working capital needs, commodity risk exposure and earnings volatility, management intends to exit the butane optimization business at the conclusion of the butane selling season during the second quarter of 2023.

We store and transport NGLs for wholesale deliveries to industrial NGL users and propane retailers in the southeastern U.S.

Significant Recent Developments

Issuance of 2028 Notes to Refinance Existing Secured Notes .

On February 8, 2023, we completed the sale of $400.0 million in aggregate principal amount of our 11.50% senior secured second lien notes due 2028 (the “2028 Notes”).

We used the proceeds of the 2028 Notes to complete the tender offers for substantially all of our 2024 Notes and 2025 Notes, redeem all 2024 Notes and 2025 Notes that were not validly tendered, repay a portion of the indebtedness under our credit facility, and pay fees and expenses in connection with the foregoing.

Simultaneously with the issuance of the 2028 Notes we amended our credit facility to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the credit facility to February 8, 2027.

Exit from Butane Optimization Business.

In January 2023, we announced that we anticipate the exit of our butane optimization business at the conclusion of the butane selling season during the second quarter of 2023.

Going forward, our intent is to operate as a fee-based butane logistics business, primarily utilizing our north Louisiana underground storage assets, which have both truck and rail capability.

This logistics business will also utilize our truck transportation assets for fee-based product movements.

As a result of this new business model, we anticipate no longer carrying butane inventory going forward, eliminating commodity risk, reducing cash flow and earnings volatility, and substantially reducing working capital requirements.

Electronic Level Sulfuric Acid Joint Venture.

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In addition to owning a 10% non-controlling interest in DSM, we will be the exclusive provider of feedstock to the ELSA Facility.

We, through our affiliate Martin Transport, Inc., ("MTI") will also provide land transportation services of the ELSA produced by DSM.

The Partnership expects to fund approximately $20.0 million in aggregate capital expenditures in connection with this joint venture and the Partnership’s related services in 2023 and 2024.

Divestiture of Stockton, California Sulfur Terminal.

On October 7, 2022, we closed on the sale of our Stockton Sulfur Terminal to Gulf Terminals LLC for net proceeds of approximately $5.25 million, which were used to reduce outstanding borrowings under our credit facility.

We, through our affiliate Martin Transport, Inc.

("MTI"), will also provide land transportation services of the ELSA produced by DSM.

We expect to fund approximately $25.5 million in aggregate capital expenditures in connection with this joint venture and our related services.

As of December 31, 2023, we have funded approximately $8.6 million toward ELSA-related project costs.

Exit from Butane Optimization Business.

In the second quarter of 2023, we completed the previously announced exit of our butane optimization business at the conclusion of the butane selling season.

Going forward, with respect to butane, we will operate as a fee-based butane logistics business, primarily utilizing our north Louisiana underground storage assets, which have both truck and rail capability.

This logistics business will also utilize our truck transportation assets for fee-based product movements.

As a result of this new business model, we will no longer carry butane inventory going forward, enabling us to reduce commodity risk exposure, cash flow and earnings volatility, and working capital requirements.

Issuance of 2028 Notes to Refinance Existing Secured Notes .

On February 8, 2023, we completed the sale of $400.0 million in aggregate principal amount of our 2028 Notes.

Simultaneously with the issuance of the 2028 Notes, we amended our credit facility to, among other things, reduce the commitments thereunder from $275.0 million to $200.0 million (with further scheduled reductions to $175.0 million on June 30, 2023 and $150.0 million on June 30, 2024) and extend the scheduled maturity date of the credit facility to February 8, 2027.

Subsequent Events

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Members of our executive management team and the heads of our principal business lines have a significant amount of experience in the industries in which we operate.

Our management team's experience and familiarity with our industry and businesses are important assets that assist us in implementing our business strategies.

Our management team's experience and familiarity with our industry and businesses are important assets that assist us in

implementing our business strategies.

In addition, members of our senior management hold significant limited and general partner interests in us, which we believe aligns incentives with our investors.

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Terminalling and Storage Segment

Industry Overview.

petroleum distribution system moves petroleum products and by-products from oil refineries and natural gas processing facilities to end users.

This distribution system is comprised of a network of terminals, storage facilities, pipelines, tankers, barges, railcars and trucks.

Terminals play a key role in moving these products throughout the distribution system by providing storage, blending and other ancillary services.

Although many large energy and chemical companies own terminalling and storage facilities, these companies also use third-party terminalling and storage services.

Major energy and chemical companies typically have a strong demand for terminals owned by independent operators when such terminals are strategically located at or near key transportation links, such as deep-water ports.

Major energy and chemical companies also need independent terminal storage when their owned storage facilities are inadequate, either because of lack of capacity, the nature of the stored material or specialized handling requirements.

The Gulf Coast region of the U.S.

is a major hub for petroleum refining.

Approximately 50% of U.S.

refining capacity exists in this region.

Growth in the refining and natural gas processing industries has increased the volume of petroleum products and by-products that are transported within the Gulf Coast region of the U.S., which consequently has increased the need for terminalling and storage services.

The marine and offshore oil and gas exploration and production industries use terminal facilities in the Gulf Coast region of the U.S.

as shore bases that provide them logistical support services as well as a broad range of products, including fuel oil, lubricants, chemicals and supplies.

The demand for these types of terminals, services and products is driven primarily by offshore exploration, development and production in the Gulf of Mexico.

Offshore activity is greatly influenced by current and projected prices of oil and natural gas and regulatory requirements.

Specialty Petroleum Terminals.

We own or operate 13 terminalling facilities providing storage, handling and transportation of various petroleum products and by-products as well as the blending and packaging of naphthenic lubricants and automotive, commercial, industrial, and post-tension greases.

Specialty Terminal Operations

We own or operate nine terminalling facilities providing storage, handling and transportation of various petroleum products and by-products.

The locations and capabilities of our terminals are structured to complement our other businesses and reflect our strategy to provide a broad range of integrated services in the storage, handling and transportation of products.

We developed our terminalling and storage assets by acquisition and upgrades of

existing facilities as well as developing our own properties strategically located near rail, waterways and pipelines.

We developed our terminalling and storage assets by acquisition and upgrades of existing facilities as well as developing our own properties strategically located near rail, waterways and pipelines.

We anticipate further expansion of our terminalling facilities primarily through organic growth.

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The refinery's capacity is dedicated to a subsidiary of Martin Resource Management Corporation through a long-term tolling agreement based on throughput rates and a monthly reservation fee.

In Smackover, Arkansas, we own and operate a terminal used for lubricant blending, processing, packaging, marketing and distribution.

This terminal is used as our central hub for branded and private label packaged lubricants where we receive, package and ship heavy-duty, passenger car, and industrial lubricants to a network of retailers and distributors.

In Kansas City, Missouri, we lease and operate a plant that specializes in the production, packaging and distribution of automotive, commercial and industrial greases.

In Houston, Texas, we own and operate a plant that specializes in the production and distribution of commercial and industrial greases.

In Phoenix, Arizona, we lease and operate a plant that specializes in the production and distribution of commercial and industrial greases.

We own asphalt terminals in each of Hondo, South Houston, and Port Neches, Texas and Omaha, Nebraska, each dedicated to a subsidiary of Martin Resource Management Corporation through a terminalling service agreement based on throughput rates.

In Beaumont, Texas, we own a terminal ("Spindletop Terminal") where we receive natural gasoline via pipeline, store the natural gasoline in above ground tanks, and then ship the product to our customers via other pipelines to which the facility is connected, referred to as the "Spindletop Terminal." Our fees for the use of this facility are based on the volume of barrels shipped from the terminal under an arrangement that includes a provision for minimum volume throughput requirements.

Our fees for the use of this facility are based on the volume of barrels shipped from the terminal under an arrangement that includes a provision for minimum volume throughput requirements.

The following is a summary description of our shore-based specialty terminals:

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The following is a summary description of our non shore-based specialty terminals:

Terminal Location Aggregate Capacity Products Description

Smackover Refinery Smackover, Arkansas 7,700 barrels per day;

275,000 barrels of crude bulk storage;

647,000 barrels of lubricant storage Naphthenic lubricants, distillates, asphalt, crude oil Naphthenic rude refining facility

Martin Lubricants Smackover, Arkansas 4.0 million gallons bulk storage Agricultural, automotive, and industrial lubricants and grease Lubricants packaging facility

Martin Specialty Products 1

Kansas City, Missouri 14 million pounds of production capacity Automotive, commercial and industrial greases Grease manufacturing and packaging facility

Martin Specialty Products Houston, Texas 16 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility

Martin Specialty Products 2

Phoenix, Arizona 6 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility

Hondo Asphalt Hondo, Texas 182,000 barrels Asphalt Asphalt processing and storage

South Houston Asphalt Houston, Texas 95,000 barrels Asphalt Asphalt processing and storage

Port Neches Asphalt Port Neches, Texas 17,500 barrels Asphalt Asphalt processing and storage

Omaha Asphalt Omaha, Nebraska 112,000 barrels Asphalt Asphalt processing and storage

Spindletop Beaumont, Texas 90,000 barrels Natural gasoline Pipeline receipts and shipments

1 This terminal contains a warehouse owned by third parties and leased under a lease that expires in December 2025 and can be extended by us for one five-year period.

2 This terminal contains a warehouse owned by third parties and leased under a lease that expires in October 2024 and can be extended by us for one five-year period.

Marine Shore-Based Terminals.

Terminal Location Aggregate Capacity (barrels) Products Description

Smackover Refinery Smackover, Arkansas 7,700 per day;

275,000 of crude bulk storage;

647,000 of lubricant storage Naphthenic lubricants, distillates, asphalt, crude oil Naphthenic rude refining facility

Hondo Asphalt Hondo, Texas 182,000 Asphalt Asphalt processing and storage

South Houston Asphalt Houston, Texas 95,000 Asphalt Asphalt processing and storage

Port Neches Asphalt Port Neches, Texas 17,500 Asphalt Asphalt processing and storage

Omaha Asphalt Omaha, Nebraska 112,000 Asphalt Asphalt processing and storage

Spindletop Beaumont, Texas 91,000 Natural gasoline Pipeline receipts and shipments

Shore-Based Terminal Operations

We own or operate 12 marine shore-based terminals along the U.S.

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In addition, Martin Resource Management Corporation, through terminalling service agreements, pays us for terminalling and storage of fuels and lubricants at these terminal facilities and includes a provision for minimum volume throughput requirements.

Our marine shore-based terminals are divided into two classes of terminals:

Our marine shore-based terminal operations are divided into two classes of terminals:

(i) full service terminals and (ii) fuel and lubricant terminals.

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These facilities provide logistical support services and storage and handling services for fuel and lubricants.

The significant difference between our full service terminals and our fuel and lubricant terminals is that our full service terminals generate additional revenues by providing shore bases to support our customer’s operating activities related to the offshore exploration and production industry.

The significant difference between our full service terminals and our fuel and lubricant terminals is that our full service terminals generate additional revenues by providing shore bases to support our customers' operating activities related to the offshore exploration and production industry.

One typical use for our shore bases is for drilling fluids manufacturers to manufacture and sell drilling fluids to the offshore drilling industry.

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Fuel and Lubricant Terminals.

We own or operate 11 fuel and lubricant terminals located in the Gulf Coast region of the U.S.

We own or operate nine fuel and lubricant terminals located in the Gulf Coast region of the U.S.

that provide storage and handling services for lubricants and fuel oil.

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Jennings Bulk Plant Jennings, Louisiana 7,600 Own

Lake Charles T Lake Charles, Louisiana 600 April 2023

Pascagoula 2, 4

Pascagoula, Mississippi 10,100 Own

Lake Charles T Lake Charles, Louisiana 1,000 February 2028

Port Arthur Port Arthur, Texas 16,400 November 2028

Port O'Connor 1

Port O'Connor, Texas — March 2023

Sabine Pass 1

Sabine Pass, Texas 16,000 September 2036

1 This terminal is currently in caretaker status and the lease will not be renewed at the end of the current option.

1 This terminal is currently in caretaker status.

2 A portion of this terminal is owned.

4 On February 14, 2023, we closed on the sale of the Pascagoula terminal.

Underground NGL Storage Terminal Operations

Our underground NGL terminalling assets have storage and logistics capabilities for NGLs purchased primarily from major domestic oil refiners and natural gas processors.

This facility has a capacity of 2.3 million barrels for NGLs along with a railcar facility with the capacity to handle up to 24 railcars per day.

These operations support the NGL marketing efforts in our specialty products division and at Martin Resource Management Corporation.

Competition in our Terminalling and Storage Segment.

We compete with independent terminal operators and major energy and chemical companies that own their own terminalling and storage facilities.

Many customers prefer to contract with independent terminal operators rather than terminal operators owned by integrated energy and chemical companies that may have refining or marketing interests that compete with the customers.

Many of our customers prefer to contract with independent terminal operators rather than terminal operators owned by integrated energy and chemical companies that may have refining or marketing interests that compete with them.

Independent terminal owners generally compete on the basis of the location and versatility of terminals, service and price.

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The principal competitive factors affecting our terminals, which provide fuel and lubricants distribution and marketing, as well as shore bases at certain terminals, are the locations of the facilities, availability of competing logistical support services and the experience of personnel and dependability of service.

The distribution and marketing of our lubricant products is brand sensitive and we encounter brand loyalty competition.

Shore base rental contracts are generally long-term contracts and provide more protection from competition.

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Transportation Segment

Land Transportation

Industry Overview.

tank truck industry is segmented into fleet type, capacity, and product category.

The energy and chemical sectors rely heavily on the transportation industry to assist in moving large volumes of petroleum products, petrochemicals, and chemicals.

Land Transportation Operations

We operate a fleet of land transportation assets comprising approximately 760 trucks and 1,425 tank trailers that transport petroleum products and by-products, petrochemicals, and chemicals.

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Terminal Locations

Texas Louisiana Arkansas Other

Baytown Arcadia West Memphis Theodore, Alabama

Beaumont Baton Rouge Smackover Tampa, Florida

Beaumont Lube Bossier City Stephens Hattiesburg, Mississippi

Channelview Jennings Kenova, West Virginia

Corpus Christi Lake Charles Tennessee Pace, Florida

Kilgore Reserve Chattanooga Mulberry, Florida

Longview Kingsport

Texas Louisiana Arkansas Florida

Baytown Arcadia West Memphis Tampa

Beaumont Baton Rouge Smackover Pace

Beaumont Lube Bossier City Stephens Mulberry

Channelview Jennings

Corpus Christi Lake Charles Tennessee Other

Kilgore Reserve Chattanooga Theodore, Alabama

Longview Kingsport Hattiesburg, Mississippi

Plainview Kenova, West Virginia

Our major land transportation customers include energy, petrochemical, and chemical companies and Martin Resource Management Corporation.

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Competition in our service regions is based primarily on freight rates, service, efficiency, and available capacity.

Marine Transportation

Industry Overview.

inland waterway system is composed of a network of interconnected rivers and canals that serve as water highways and is used to transport vast quantities of products annually.

This waterway system extends approximately 26,000 miles, of which 12,000 miles are generally considered significant for domestic commerce.

The Gulf Coast region of the U.S.

is a major hub for petroleum refining.

The petroleum refining process generates products and by-products that require transportation in large quantities from the refinery or processor.

Convenient access to and use of this waterway system by the petroleum and petrochemical industry is a major reason for the current location of U.S.

refineries and petrochemical facilities.

The marine transportation industry uses push boats and tugboats as power sources and tank barges for freight capacity.

The combination of the power source and tank barge freight capacity is called a tow.

Marine Fleet.

Marine Transportation Operations

We utilize a fleet of inland and offshore tows that provide marine transportation of petroleum products and by-products produced in oil refining.

Our marine transportation business operates coastwise along the Gulf of Mexico and east coast of the U.S., as well as on the U.S.

Our marine transportation business operates coastwise along the Gulf of Mexico and the east coast of the U.S., as well as on the U.S.

inland waterway system, primarily between domestic ports along the Gulf of Mexico, Intracoastal Waterway, the Mississippi River system and the Tennessee-Tombigbee Waterway system.

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However, customers are placing an increased emphasis on the age of equipment, safety, environmental compliance, quality of service and the availability of a single source of supply of services.

In addition to competitors that provide marine transportation services, we also compete with providers of other modes of transportation, such as rail, trucks and, to a lesser extent, pipelines.

In addition to competitors that provide marine transportation services, we also compete with providers of other modes of transportation, such as rail, truck and, to a lesser extent, pipeline.

For example, a typical two-barge tow carries a volume of product equal to approximately 80 railcars or 250 tanker trucks.

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Sulfur Services Segment

Industry Overview.

Sulfur is a natural element and is required to produce a variety of industrial products.

Sulfur demand in the U.S.

generally averages 8.5 million to 9.0 million tons annually, and is concentrated around large phosphate fertilizer operations primarily located in the southeastern parts of the country.

Currently, all sulfur produced in the U.S.

is "recovered sulfur," or sulfur that is a by-product from oil refineries and natural gas processing plants.

Sulfur production in the U.S.

is principally located along the U.S.

Gulf Coast, along major inland waterways and in some areas of the western U.S.

Sulfur has long been recognized as essential for plant and animal growth and various other industrial purposes.

The primary application of sulfur in fertilizers occurs in the form of sulfuric acid.

Burning sulfur creates sulfur dioxide, which is subsequently oxidized and dissolved in water to create sulfuric acid.

The sulfuric acid is then combined with ammonia and phosphate rock to manufacture phosphate as well as ammonium sulfate and ammonium thiosulfate fertilizers.

Sulfur-based fertilizers are manufactured chemicals containing nutrients known to improve the fertility of soils.

Nitrogen, phosphorus, potassium and sulfur are the four most important nutrients for crop growth.

These nutrients are found naturally in soils.

However, soils used for agriculture become depleted of nutrients and require fertilizers rich in nutrients to restore fertility.

Industrial sulfur products (including sulfuric acid) are used in a wide variety of industries.

For example, these products are used in power plants, paper mills, auto and tire manufacturing plants, food processing plants, road construction, cosmetics and pharmaceuticals.

Our Operations and Products.

We maintain an integrated system of transportation assets and facilities relating to our sulfur services.

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• Sulfuric acid.

Sulfuric acid production facility at our Plainview, Texas location processes molten sulfur to produce a dedicated supply of raw material sulfuric acid to our ammonium sulfate production plant.

We produce Sulfuric acid at our Plainview, Texas facility.

This facility processes molten sulfur to produce a dedicated supply of raw material sulfuric acid to our ammonium sulfate production plant.

The sulfuric acid produced and not consumed by the captive ammonium sulfate production is sold to third parties.

Our Sulfur Services Facilities.

We own the following marine assets and use them to transport molten sulfur between U.S.

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Sulfuric acid plant Plainview, Texas 150,000 tons Sulfuric acid production

We own the LaForce/Margaret Sue articulated barge unit, which is one of four vessels currently used to transport molten sulfur between U.S.

We own the LaForce/Margaret Sue articulated tug and barge unit, which is one of four vessels currently used to transport molten sulfur between U.S.

ports on the Gulf of Mexico and Tampa, Florida.

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from Louisiana to California.

Sales of our agricultural fertilizer products are partly seasonal as a result of increased demand during the growing season.

Natural Gas Liquids Segment

Industry Overview.

Sales of our agricultural fertilizer products are partly seasonal as a result of increased demand during the early spring planting season

Specialty Products Segment

Lubricants and Greases Operations

In Smackover, Arkansas, we own and operate a terminal used for lubricant blending, processing, packaging, marketing and distribution.

This terminal is our central hub for branded and private label packaged lubricants where we receive, package and ship heavy-duty, passenger car, and industrial lubricants to a network of retailers and distributors.

In Kansas City, Missouri, we lease and operate a plant that specializes in the production, packaging and distribution of automotive, commercial and industrial greases.

In Houston, Texas, we own and operate a plant that specializes in the production and distribution of commercial and industrial greases.

In Phoenix, Arizona, we lease and operate a plant that specializes in the production and distribution of commercial and industrial greases.

Terminal Location Aggregate Capacity Products Description

Martin Lubricants Smackover, Arkansas 4.0 million gallons bulk storage Agricultural, automotive, and industrial lubricants and grease Lubricants packaging facility

Martin Specialty Products 1

Kansas City, Missouri 14 million pounds of production capacity Automotive, commercial and industrial greases Grease manufacturing and packaging facility

Martin Specialty Products Houston, Texas 16 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility

Martin Specialty Products 2

Phoenix, Arizona 6 million pounds of production capacity Commercial and industrial greases Grease manufacturing and packaging facility

1 This terminal contains a warehouse owned by third parties and leased under a lease that expires in December 2025 and can be extended by us for one five-year period.

2 This terminal contains a warehouse owned by third parties and leased under a lease that expires in October 2024 and can be extended by us for one five-year period.

Natural Gas Liquids Operations

NGLs are produced through natural gas processing and as a by-product of crude oil refining.

NGLs include ethane, propane, normal butane, iso butane and natural gasoline.

Ethane is almost entirely used as a petrochemical feedstock in the production of ethylene and propylene.

NGLs include propane, natural gasoline, normal butane, iso butane and ethane.

Propane is used as a petrochemical feedstock in the production of ethylene and propylene, as a fuel for heating, for industrial applications, as motor fuel and as a refrigerant.

Natural gasoline is used as a component of motor gasoline, as a petrochemical feedstock and as a diluent.

Normal butane is used as a petrochemical feedstock, as a blend stock for motor gasoline and as a component in aerosol propellants.

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Iso butane is used in the production of motor gasoline, alkylation and as a component in aerosol propellants.

Natural gasoline is used as a component of motor gasoline, as a petrochemical feedstock and as a diluent.

Ethane is almost entirely used as a petrochemical feedstock in the production of ethylene and propylene.

We purchase NGLs primarily from major domestic oil refiners and natural gas processors.

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Spindletop storage facility Beaumont, Texas 91,000 barrels Above ground storage tank and pipeline connections

In addition to the owned NGL facilities above, we lease underground storage capacity at two locations under short-term lease agreements.

Our NGL customers consist of refiners, industrial processors and retail propane distributors.

Our NGL customers consist of industrial processors and retail propane distributors.

The majority of our NGL volumes are sold to refiners and industrial processors.

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This imbalance causes increases in inventories during summer months when consumption is low and decreases in inventories during winter months when consumption is high.

In September, demand for normal butane typically increases with refineries entering the winter gasoline-blending season, resulting in upward pressure on prices.

Abnormally cold weather can put extra upward pressure on propane prices during the winter.

We compete with large integrated NGL producers and marketers as well as small local independent marketers, primarily with respect to location, rates, terms and flexibility of service and supply.

Exit from Butane Optimization Business.

In an effort to reduce borrowing costs, working capital needs, commodity risk exposure and earnings volatility, management intends to exit the butane optimization business at the conclusion of the butane selling season during the second quarter of 2023.

Going forward, our intent is to operate as a fee-based butane logistics business, primarily utilizing our north Louisiana underground storage assets, which have both truck and rail capability.

This logistics business will also utilize our truck transportation assets for fee-based product movements.

Our Relationship with Martin Resource Management Corporation

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• providing crude oil gathering, refining, and marketing services of base oils, asphalt, and distillate products in Smackover, Arkansas;

• providing crude oil marketing and transportation from the well head to the end market;

• providing crude oil marketing and transportation from the wellhead to the end market;

• operating an environmental consulting company;

• operating a butane optimization business;

• supplying employees and services for the operation of our business;

• operating, solely for our account, the asphalt facilities in Hondo, South Houston and Port Neches, Texas, and Omaha, Nebraska.

• operating, solely for our account, the asphalt facilities owned by us in Hondo, South Houston and Port Neches, Texas, and Omaha, Nebraska.

We are and will continue to be closely affiliated with Martin Resource Management Corporation as a result of the following relationships.

Martin Resource Management Corporation owns approximately 15.7% of the outstanding limited partner units.

Martin Resource Management Corporation owns approximately 15.7% of the outstanding limited partnership units.

In addition, following its acquisition of the remaining 49% voting interest (50% economic interest) in Holdings, which is the sole member of MMGP, Martin Resource Management Corporation indirectly owns 100% of MMGP, our general partner.

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The Omnibus Agreement with Martin Resource Management Corporation requires us to reimburse Martin Resource Management Corporation for all direct expenses it incurs or payments it makes on our behalf or in connection with the operation of our business.

We reimbursed Martin Resource Management Corporation for $161.6 million, $134.7 million and $125.3 million of direct costs and expenses for the years ended December 31, 2022, 2021 and 2020, respectively.

We reimbursed Martin Resource Management Corporation for $165.6 million and $161.6 million of direct costs and expenses for the years ended December 31, 2023 and 2022, respectively.

There is no monetary limitation on the amount we are required to reimburse Martin Resource Management Corporation for direct expenses.

In addition to the direct expenses, under the Omnibus Agreement, we are required to reimburse Martin Resource Management Corporation for indirect general and administrative and corporate overhead expenses.

For the years ended December 31, 2022, 2021, and 2020, the board of directors of our general partner approved reimbursement amounts of $13.5 million, $14.4 million and $16.4 million, respectively, reflecting our allocable share of such expenses.

For the years ended December 31, 2023 and 2022, the board of directors of our general partner approved reimbursement amounts of $14.0 million and $13.5 million, respectively, reflecting our allocable share of such expenses.

The board of directors of our general partner will review and approve future adjustments in the reimbursement amount for indirect expenses, if any, annually.

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Approval and Review of Related Party Transactions

If we contemplate entering into a transaction, other than a routine or in the ordinary course of business transaction, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the board of directors of our general partner or to our management, as appropriate.

If we contemplate entering into a transaction, other than a routine or in the ordinary course of business transaction or as permitted under the Omnibus Agreement, in which a related person will have a direct or indirect material interest, the proposed transaction is submitted for consideration to the board of directors of our general partner or to our management, as appropriate.

If the board of directors is involved in the approval process, it determines whether to refer the matter to the Conflicts Committee, as provided under our limited partnership agreement (the "Partnership Agreement").

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We currently own or lease, and have in the past owned or leased, properties that have been used for the manufacturing, processing, transportation and storage of petroleum products and by-products.

Solid waste disposal practices within oil and gas related industries have improved over the years with the passage and implementation of various environmental laws and regulations.

Solid waste disposal practices within oil and gas

related industries have improved over the years with the passage and implementation of various environmental laws and regulations.

Nevertheless, a possibility exists that petroleum and other solid wastes may have been disposed of on or under various properties owned or leased by us during the operating history of those facilities.

In addition, a number of these

properties have been operated by third parties over whom we had no control as to such entities’ handling of petroleum, petroleum by-products or other wastes and the manner in which such substances may have been disposed of or released.

State and federal laws and regulations applicable to oil and natural gas wastes and properties have gradually become more strict and, under such laws and regulations, we could be required to remove or remediate previously disposed wastes or property contamination, including groundwater contamination, even under circumstances where such contamination resulted from past operations of third parties.

In addition, a number of these properties have been operated by third parties over whom we had no control as to such entities’ handling of petroleum, petroleum by-products or other wastes and the manner in which such substances may have been disposed of or released.

State and federal laws and regulations applicable to oil and natural gas wastes and properties have gradually become stricter and, under such laws and regulations, we could be required to remove or remediate previously disposed wastes or property contamination, including groundwater contamination, even under circumstances where such contamination resulted from past operations of third parties.

Clean Air Act

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Many states have already taken legal measures to reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs.

Additionally, as a result of the April 2007 U.S.

Supreme Court ruling in Massachusetts, et al.

EPA deciding that the EPA has authority to regulate carbon dioxide emissions under the CAA, the EPA has taken several steps towards implementing regulations regarding the emission of GHGs.

In 2009, the EPA issued a final rule declaring that six GHGs "endanger both the public health and the public welfare of current and future generations." The issuance of this "endangerment finding" allows the EPA to regulate GHG emissions under existing provisions of the federal CAA.

Further, in December 2015, over 190 countries, including the U.S., reached an agreement to reduce global GHG emissions ("Paris Agreement").

The Paris Agreement entered into force in November 2016, after over 70 countries, including the U.S., ratified or otherwise consented to be bound by the agreement.

In November 2020, the U.S.

formally withdrew from the Paris Agreement.

However, on January 20, 2021, President Biden signed an “Acceptance on Behalf of the United States of America” that will allow the U.S.

to rejoin the Paris Agreement.

The newly signed acceptance, deposited with the United Nations on January 20, 2021, reverses the prior withdrawal.

officially rejoined the Paris Agreement on February 19, 2021.

As part of rejoining the Paris Agreement, President Biden announced that the U.S.

would commit to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.

In addition, shortly after taking office in January 2021, President Biden issued a series of executive orders designed to address climate change, and new legislation to regulate GHG emissions has been periodically introduced into the U.S.

The EPA regulates GHG emissions under existing provisions of the federal CAA.

Further, under the Paris Agreement, the U.S.

has committed to a 50 to 52 percent reduction from 2005 levels of GHG emissions by 2030 and set the goal of reaching net-zero GHG emissions by 2050.

The 2023 United Nations Climate Change Conference in Dubai issued its first global stocktake agreement, which calls on parties, including the United States, to contribute to the transitioning away from fossil fuels, reduce methane emissions, and increase renewable energy capacity, among other things, to achieve net zero emissions by 2050.

In addition, President Biden has issued a series of executive orders designed to address climate change, and new legislation to regulate GHG emissions has been periodically introduced into the U.S.

Congress, but none have passed.

Reentry into the Paris Agreement, new legislation, or President Biden’s executive orders may result in the development of additional regulations or changes to existing regulations, which could have a material adverse effect on our business and that of our customers.

The Paris Agreement, the Dubai stocktake agreement, new legislation, and President Biden’s executive orders may result in the development of additional regulations or changes to existing regulations, which could have a material adverse effect on our business and that of our customers.

Several states and local governments have also stated their commitment to the principles of the Paris Agreement in their effectuation of policy and regulations.

The United States Environmental Protection Agency has proposed strict new methane emission regulations for certain oil and gas facilities and the Inflation Reduction Act of 2022 (“IRA”) establishes a charge on methane emissions above certain limits from the same facilities.

The United States Environmental Protection Agency announced strict new methane emission regulations for certain oil and gas facilities in December 2023 and the Inflation Reduction Act of 2022 (“IRA”) established a charge on methane emissions above certain limits from the same facilities.

To date, such requirements have not had a substantial effect upon our operations.

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Furthermore, the Clean Water Act potentially requires individual permits or qualification for nationwide permits for activities that involve the discharge of dredged or fill material into waters of the U.S.

In June 2015, the EPA and the U.S.

Army Corps of Engineers (the “Corps”) finalized a rule intended to clarify the meaning of the term "waters of the U.S.," which established the scope of regulated waters under the Clean Water Act.

However, in October 2019, the subject rule was repealed and the pre-2015 regulatory text was re-codified.

In April 2020, the EPA and the Army Corps of Engineers issued the final Navigable Waters Protection Rule (“NWPR”) amending the definition of "water of the U.S." and replacing the EPA's October 2019 final rule.

Judicial challenges to EPA’s October 2019 and April 2020 final rules are currently before multiple federal district courts.

Additionally, the rules are among agency actions listed for review in accordance with President Biden’s January 20, 2021 Executive Order:

"Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis." On December 7, 2021, EPA and the Corps published a proposed rule titled the “Revised Definition of ‘Waters of the U.S.’” The proposed rule provides that EPA and the Corps will begin interpreting the WOTUS definition consistent with the Pre-2015 regulatory regime, generally referred to as the “1986 definition,” subject to some amendments that reflect the agencies’ interpretation of the statutory limits on the WOTUS definition and Supreme Court precedent.

The proposed rule, if finalized, would be expected to significantly expand federal jurisdiction as compared to the NWPR, and as such, we could face increased costs and delays with respect to obtaining permits for activities in jurisdictional waters, including wetlands.

Under the Obama administration, the EPA promulgated a set of rules that included a comprehensive regulatory overhaul of defining “waters of the United States” for the purposes of determining federal jurisdiction.

The Trump administration signaled its intent to repeal and replace the Obama-era rules.

In accordance with this intent, the EPA promulgated a rule in early 2018 that postponed the effectiveness of the Obama-era rules until 2020.

Thereafter, the EPA proposed a new set of rules that would narrow the Clean Water Act’s jurisdiction, which were finalized on April 21, 2020.

That set of rules was vacated by decisions in the U.S.

federal district courts in New Mexico and Arizona, and on November 18, 2021, the EPA released a proposal to reestablish the pre-2015 definition of “waters of the United States” which will become effective upon finalization and publication.

On December 30, 2022, the EPA and the U.S.

Army Corps of Engineers announced the final “Revised Definition of ‘Waters of the United States”’ rule, which was published on January 18, 2023 and becomes effective on March 20, 2023.

This final rule, however, is the subject of various pending legal challenges.

In addition, on January 24, 2022, the Supreme Court granted certiorari in the case of Sackett v.

EPA to determine whether the Ninth Circuit set forth the proper test for determining whether wetlands are “waters of the U.S.” under the Clean Water Act.

The Court’s decision to take up this jurisdictional question will undoubtedly impact the agencies’ current rulemaking process addressing the same question.

Army Corps of Engineers announced the final “Revised Definition of ‘waters of the United States”’ rule, which was published on January 18, 2023, and became effective on March 20, 2023.

However, on May 25, 2023, the U.S.

Supreme Court issued a decision limiting the scope of federal jurisdiction over wetlands, and on August 29, 2023, the EPA issued a final rule that seeks to conform with the Supreme Court decision.

To the extent that any future Supreme Court decisions or final rules expand the scope of the Clean Water Act's jurisdiction, we could face increased costs and delays with respect to permitting.

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A "responsible party" includes the owner or operator of a facility or vessel or the lessee or permittee of the area in which an offshore facility is located.

OPA assigns liability to each responsible party for oil removal costs and a variety of public and private damages including natural resource damages.

Under OPA, vessels and shore facilities handling, storing, or transporting oil are required to develop and implement oil spill response plans, and vessels greater than 300 tons in weight must provide to the U.S.

The OPA assigns liability to each responsible party for oil removal costs and a variety of public and private damages including natural resource damages.

Under the OPA, vessels and shore facilities handling, storing, or transporting oil are required to develop and implement oil spill response plans, and vessels greater than 300 tons in weight must provide to the U.S.

Coast Guard evidence of financial responsibility to cover the costs of cleaning up oil spills from such vessels.

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We believe we are in substantial compliance with all of the oil spill-related and financial responsibility requirements.

Nonetheless, in the aftermath of the Deepwater Horizon incident in 2010, Congress has from time to time considered oil spill related legislation that could have the effect of substantially increasing financial responsibility requirements and potential fines and damages for violations and discharges subject to OPA, and similar legislation.

Any such changes in law affecting areas where we conduct business could materially affect our operations.

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These services include centralized corporate functions, such as accounting, treasury, engineering, information technology, insurance, administration of employee benefit plans and other corporate services.

Martin Resource Management Corporation has approximately 1,570 employees of which 1,230 individuals, including 57 individuals represented by labor unions, provide direct support to our

operations as of December 31, 2022.

Martin Resource Management Corporation has approximately 1,619 employees of which 1,245 individuals, including 58 individuals represented by labor unions, provide direct support to our operations as of December 31, 2023.

Martin Resource Management Corporation employees are responsible for conducting our business and operating our assets on our behalf.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business