Edgar Filing: GENESIS ENERGY LP

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND
MAY BE CHANGED. THIS PRELIMINARY PROSPECTUS SUPPLEMENT AND ACCOMPANYING
PROSPECTUS ARE NOT AN OFFER TO SELL THESE SECURITIES AND THEY ARE NOT SOLICITING
OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

Filed Pursuant to Rule 424(b)(5)
Registration No. 333-126482

SUBJECT TO COMPLETION, DATED DECEMBER 1, 2005

PRELIMINARY PROSPECTUS SUPPLEMENT

(TO PROSPECTUS DATED AUGUST 30, 2005)

3,400,000 COMMON UNITS

(GENESIS LOGO)

GENESIS ENERGY, L.P.
REPRESENTING LIMITED PARTNER INTERESTS
------------------
We are offering 3,400,000 common units representing limited partner
interests, as well as 271,531 common units to be offered to our general partner.
Our common units are traded on the American Stock Exchange, or AMEX, under the
symbol "GEL." On November 29, 2005, the last reported sales price of our common
units on the AMEX was $11.50 per common unit.
------------------
INVESTING IN OUR COMMON UNITS INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE S-10 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 2 OF THE ACCOMPANYING
PROSPECTUS.
------------------

PER COMMON UNIT TOTAL
---------------------- ----------------------

Public offering price................................ $ $
Underwriting discount(1)............................. $ $
Proceeds, before expenses, to Genesis Energy,
L.P. .............................................. $ $

(1) The underwriters will receive no discount or commission on the sale of
common units to our general partner.
------------------
The underwriters may also purchase up to an additional 510,000 common units
from us at the public offering price, less the underwriting discount, within 30
days from the date of this prospectus to cover over-allotments. Our general
partner may also purchase up to an additional 40,730 common units from us at the
public offering price, less the underwriting discount, allowing it to maintain
its proportionate interest in us to the extent the underwriters exercise the
over-allotment option.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The underwriters expect to deliver the common units to purchasers on or
about December , 2005.
------------------

A.G. EDWARDS RBC CAPITAL MARKETS
The date of this prospectus is , 2005.

TABLE OF CONTENTS

PAGE
----

PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary............................... S-1
Genesis Energy, L.P. ....................................... S-1
Risk Factors................................................ S-10
Use of Proceeds............................................. S-12
Capitalization.............................................. S-13
Price Range of Common Units and Distributions............... S-14
Business.................................................... S-15
Tax Considerations.......................................... S-21
Management.................................................. S-22
Reconciliation of Non-GAAP Financial Measures............... S-24
Underwriting................................................ S-26
Legal Matters............................................... S-29
Experts..................................................... S-29
Forward-Looking Statements.................................. S-29
Where You Can Find More Information......................... S-30

PROSPECTUS
About This Prospectus....................................... 1
About Genesis Energy, L.P. and Genesis Crude Oil, L.P. ..... 1
Risk Factors................................................ 2
Risks Related to Our Business............................. 2
Risks Related to Our Partnership Structure................ 8
Tax Risks to Common Unitholders........................... 12
Use of Proceeds............................................. 15
Description of Our Equity Securities........................ 16
General................................................... 16
Our Common Units.......................................... 16
Our Equity Securities Other than Common Units............. 19
Cash Distribution Policy.................................... 19
Distributions of Available Cash........................... 19
Operating Surplus and Capital Surplus..................... 20
Distributions of Available Cash from Operating Surplus.... 21
Distribution from Capital Surplus......................... 22
Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.................................... 22
Distribution of Cash Upon Liquidation..................... 23
Description of Our Partnership Agreement.................... 25
Purpose................................................... 25
Power of Attorney......................................... 25
Reimbursements of Our General Partner..................... 25
Issuance of Additional Securities......................... 25
Amendments to Our Partnership Agreement................... 26
Withdrawal or Removal of Our General Partner.............. 26
Liquidation and Distribution of Proceeds.................. 27
Change of Management Provisions........................... 27
Limited Call Right........................................ 27
Indemnification........................................... 27
Registration Rights....................................... 28

PAGE
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Material Tax Consequences................................... 29
Partnership Status........................................ 29
Limited Partner Status.................................... 30
Tax Consequences of Unit Ownership........................ 31
Tax Treatment of Operations............................... 35
Disposition of Common Units............................... 36
Uniformity of Units....................................... 38
Tax-Exempt Organizations and Other Investors.............. 38
Administrative Matters.................................... 39
State, Local and Other Tax Considerations................. 41
Investment in Genesis by Employee Benefit Plans............. 41
Plan of Distribution........................................ 43
Where You Can Find More Information......................... 43
Information Regarding Forward-Looking Statements............ 44
Legal Matters............................................... 45
Experts..................................................... 45

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT, AND THE UNDERWRITERS HAVE NOT, AUTHORIZED ANY OTHER PERSON TO PROVIDE
YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE
UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN ANY
JURISDICTION WHERE AN OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS SUPPLEMENT SUMMARY

This document is in two parts. The first part is the prospectus supplement,
which describes the specific terms of this offering of common units. The second
part is the base prospectus dated August 30, 2005, which gives more general
information, some of which may not apply to this offering. Generally, when we
refer only to the "prospectus," we are referring to the two parts combined. If
information varies between the prospectus supplement and the accompanying base
prospectus, you should rely on the information in this prospectus supplement.

This summary highlights some basic information from this prospectus
supplement and the accompanying base prospectus to help you understand the
common units. It likely does not contain all the information that is important
to you. You should read carefully the entire prospectus supplement, the
accompanying base prospectus and the other documents incorporated by reference
to understand fully the terms of the common units, as well as the tax and other
considerations that are important in making your investment decision. You should
not assume that the information provided by this prospectus supplement or the
accompanying prospectus, as well as information we previously filed with the
Securities and Exchange Commission that is incorporated by reference herein, is
accurate as of any date other than its respective date.

Unless the context otherwise requires, references in this prospectus to
"Genesis Energy, L.P.," "Genesis," "we," "our," "us" or like terms refer to
Genesis Energy, L.P. and its operating subsidiaries. Except as the context
otherwise indicates, the information in this prospectus supplement assumes no
exercise of the underwriters' over-allotment option.

This preliminary prospectus supplement presents segment margin and
available cash before reserve amounts, or ratios derived therefrom, which are
non-GAAP financial measures as used herein. For a reconciliation of non-GAAP
financial measures, please see "Reconciliation of Non-GAAP Financial Measures"
on page S-24.

GENESIS ENERGY, L.P.

OVERVIEW

We are a growth-oriented midstream energy partnership that was formed in
1996 as a master limited partnership, or MLP. We have a diverse portfolio of
customers and assets, including pipeline transportation of primarily crude oil
and, to a lesser extent, natural gas and carbon dioxide (CO(2)) in the Gulf
Coast region of the United States. In conjunction with our crude oil pipeline
transportation operations, we (1) operate a crude oil gathering and marketing
business, which (among other things) helps ensure a base supply of crude oil for
our pipelines, and (2) participate in industrial gas activities, including a
CO(2) supply business, which is associated with the CO(2) tertiary oil recovery
process being used in Mississippi by an affiliate of our general partner. We
also recently acquired a 50% interest in a joint venture that processes natural
gas to produce syngas and high-pressure steam. We attempt to minimize our
exposure to changes in the prices of energy commodities by structuring our
compensation arrangements for each service we provide in a manner that is not
directly linked to commodity prices.

We conduct our business through three primary segments:

Pipeline Transportation -- Our core business is the transportation of crude
oil for others for a fee. The rates on substantially all of our pipelines are
regulated by the Federal Energy Regulatory Commission, also known as FERC, or
the Railroad Commission of Texas. Our 230-mile Mississippi System provides
shippers of crude oil in Mississippi indirect access to refineries, pipelines,
storage, terminalling and other crude oil infrastructure located in the Midwest.
Our 90-mile Texas System extends from West Columbia to Webster, Webster to Texas
City and Webster to Houston. Our 100-mile Jay System originates in eastern
Alabama and the panhandle of Florida and extends to a point near Mobile,
Alabama. On a much smaller scale, we also transport CO(2) and natural gas for a
fee. For the nine months ended September 30, 2005, our pipeline transportation
segment margin represented 49.3% of our total segment margins.

S-1

Crude Oil Gathering and Marketing -- We conduct certain crude oil
aggregating operations, which involve purchasing, gathering and transporting by
trucks and pipelines operated by us and trucks, pipelines and barges operated by
others, and reselling, that (among other things) help ensure a base supply
source for our crude oil pipeline systems. Our profit for those services is
derived from the difference between the price at which we re-sell crude oil less
the price at which we purchase that crude oil, minus the associated costs of
aggregation and any cost of supplying credit. The most substantial component of
our aggregating costs relates to operating our fleet of leased trucks. Our crude
oil gathering and marketing activities provide us with an extensive expertise,
knowledge base and skill set that facilitates our ability to capitalize on
regional opportunities which arise from time to time in our market areas.
Usually, this segment experiences limited commodity price risk because we
generally make back-to-back purchases and sales, matching our sale and purchase
volumes on a monthly basis. For the nine months ended September 30, 2005, our
crude oil gathering and marketing segment margin represented 16.5% of our total
segment margins.

Industrial Gases -- Because of the substantial CO2 flooding tertiary
recovery operations being utilized around our Mississippi System, we became
familiar with CO2-related activities and, ultimately, began our CO2 business
in 2003. Our relationships with industrial customers who use CO2 have
expanded, which has introduced us to potential opportunities associated with
other industrial gases, such as syngas (also known as synthesis gas), which is a
combination of carbon monoxide and hydrogen.

[ ] CO2 -- We supply CO2 to industrial customers under seven long-term
contracts, with an average remaining contract life of 10 years. We
acquired those contracts, as well as the CO2 necessary to satisfy
substantially all of the obligations under those contracts, in three
separate transactions with affiliates of our general partner. Our
compensation for supplying CO2 to our industrial customers is the
effective difference between the price at which we sell our CO2
under each contract and the price at which we acquired our CO2
pursuant to our volumetric production payments (also known as VPPs),
minus transportation costs. We expect our CO2 contracts to provide
stable cash flows until they expire, at which time we will attempt to
extend or replace those contracts.

[ ] Syngas -- Through our 50% interest in a joint venture, we receive a
proportionate share of fees under a processing agreement covering a
facility that manufactures syngas and high-pressure steam. Under that
processing agreement, the joint venture receives a fee in exchange for
its sole customer (Praxair Hydrogen Supply, Inc.) receiving the
exclusive right to use the facility through at least July 31, 2016.
The results of operations relating to our syngas investment are not
reflected in our Industrial Gases Segment because we use the equity
method to account for that investment.

For the nine months ended September 30, 2005, our industrial gases segment
margin represented 34.2% of our total segment margins.

We conduct our operations through subsidiaries and joint ventures. Our
general partner is responsible for operating our business, including providing
all necessary personnel and other resources.

OUR GENERAL PARTNER AND OUR RELATIONSHIP WITH DENBURY RESOURCES INC.

We continue to benefit from our affiliation with Denbury Resources Inc.
(NYSE: DNR), which indirectly owns our general partner and a 9.25% ownership
interest in us. Denbury is a publicly traded oil and gas exploration and
production company with operations located primarily in Mississippi, Louisiana
and Texas. As a result of its emphasis on the tertiary recovery of crude oil
using CO2 flooding, Denbury has become the largest producer (based on average
barrels produced per day) of crude oil in the State of Mississippi, and owns
approximately 2.7 trillion cubic feet of proved CO2 reserves as of December
31, 2004.

In addition to its ownership interests in us, we have other significant
commercial arrangements with Denbury. Denbury (including its subsidiaries) is:

[ ] the only shipper (other than us) on our Mississippi System, utilizing
more than 85% of the current daily throughput;

S-2

[ ] the company that sold us seven long-term CO2 sales contracts with
industrial customers, along with the CO2 necessary to satisfy
substantially all of our obligations under those contracts (280.0
billion cubic feet (Bcf) of CO2 under three separate VPPs);

[ ] the operator of the fields in which our CO2 reserves are located;
and

[ ] the sole shipper on our CO2 pipeline.

To maintain Denbury's 9.25% interest in us following this offering, our general
partner has elected to exercise its preemptive right under our partnership
agreement. Accordingly, concurrently with this offering, our general partner
will purchase from us 271,531 common units for cash, as well as up to 40,730
additional common units if the underwriters exercise their over-allotment option
in full. Our general partner also is required to make a cash contribution of
approximately $0.9 million, or $1.0 million if the underwriters exercise their
over-allotment option in full, to maintain its 2% general partner interest
following this offering.

Denbury is a uniquely situated energy company. It is one of only a handful
of producers in the U.S. that possess extensive CO2 tertiary recovery
expertise, as well as large quantities of low-cost CO2 reserves. Denbury has
publicly reported that, with the drilling of four CO2 wells at its Jackson
Dome Field, it owns approximately 2.7 trillion cubic feet of proved CO2
reserves as of December 31, 2004. Denbury is conducting the largest CO2
tertiary recovery operations in the Eastern Gulf Coast of the U.S., an area with
many mature oil reservoirs that potentially contain substantial volumes of
recoverable crude oil. We believe our relationship with Denbury, as well as the
geographic proximity of our operations to Denbury's, provides us opportunities
to realize additional crude oil transportation and CO2 supply transactions
with Denbury and others.

OUR OBJECTIVE AND STRATEGY

Our objective is to operate as a growth-oriented midstream MLP with a focus
on increasing cash flow, earnings and return to our unitholders by becoming one
of the leading providers of pipeline transportation, crude oil gathering and
marketing and industrial gas services in the regions in which we operate. Our
management team is committed to increasing the amount of cash available for
distribution by executing the following strategies:

[ ] Maximizing organic growth opportunities through construction and
expansion opportunities, particularly on our Mississippi System.

[ ] Increasing volumes on our existing assets, particularly on our
Mississippi System.

[ ] Expanding our CO2 expertise and leveraging that expertise, along
with our relationship with Denbury, to create new opportunities with
Denbury and third parties.

[ ] Pursuing accretive acquisitions.

[ ] Prudently and economically leveraging our asset base, knowledge base
and skill sets to participate in businesses closely related to, or
significantly intertwined with, our existing businesses, including our
industrial gas activities.

[ ] Capitalizing on the regional crude oil supply and demand imbalances
that exist in our market areas through our marketing and distribution
expertise.

[ ] Emphasizing services for which the compensation is not linked to
commodity prices (like gathering and transportation) and managing
commodity risks by using contractual arrangements.

[ ] Maintaining a balanced and diversified portfolio of midstream energy
interests and assets.

[ ] Maintaining a sound capital structure.

[ ] Sharing capital costs and risks through joint ventures and strategic
alliances.

S-3

OUR KEY STRENGTHS

Based on the following competitive strengths, we believe we are well
positioned to execute our objective and strategy:

[ ] Quality Asset Base. We have a quality asset base characterized by:

[ ] Strategic Locations. Our Mississippi System is adjacent to several
oil fields operated by Denbury, which is the sole shipper (other
than us) on our Mississippi System. To our knowledge, our Jay
System is the only system serving the Florida panhandle and
southwest Alabama.

[ ] Additional Throughput Capacity. All of our systems have additional
throughput capacity which allows us to transport additional volumes
at minimal additional cost to us.

[ ] Cash Flow Stability. Our relatively low exposure to commodity
price fluctuations, diversified asset base and long-term contracts
associated with our industrial gases operations provide us with a
stable source of cash flows.

[ ] A Unique Platform in Industrial Gases. We believe we have the
potential to expand our CO2 business and leverage that expertise,
along with our relationship with Denbury, to create a unique growth
platform in industrial gases, an area not currently as competitive
as other midstream industry activities.

[ ] Strong Relationship with Denbury. We have a strong relationship with
Denbury, which is the indirect owner of our general partner and the
largest exploration and production company (based on average barrels
produced per day) currently operating in Mississippi. Denbury is the
sole shipper (other than us) on our Mississippi System, and its
extensive CO2 reserves and operations provided us the opportunity to
enter the industrial gases business.

[ ] Financial Flexibility and Strong Distribution Coverage. We have the
financial flexibility to pursue growth projects. After this offering
we will have no long-term debt outstanding and we will have up to $65
million of borrowing capacity under our credit facility, subject to
certain limitations. We also have strong total unit distribution
coverage (computed as available cash before reserves divided by
distributions paid during the period) at 1.7x for the nine months
ended September 30, 2005.

[ ] Experienced Management Team with Operational and Technical
Expertise. Our senior management team has extensive experience in
developing midstream systems and operating our assets. Our executive
officers have an average of 27 years of experience in the energy
industry.

[ ] Insulation from Commodity Price Risks. Many of our contractual
arrangements help insulate our operating cash flows from changes in
energy commodity prices. Our compensation arrangements include
fee-based arrangements, back-to-back purchases and sales, and
tolling-type arrangements, which in general do not vary with changes
in the price of the underlying commodity. We also use hedges from time
to time to mitigate the impact of fluctuations in energy commodity
prices on our segment margins.

[ ] Balanced and Diversified Operations. We have a balanced portfolio of
customers and assets and a proven track record of cash flow
diversification. Our operations include the pipeline transportation of
crude oil and, to a lesser extent, CO2 and natural gas in the Gulf
Coast; crude oil gathering and marketing primarily around our Gulf
Coast crude oil pipelines; and industrial gas activities.

S-4

RECENT DEVELOPMENTS

ACQUISITION OF CO2 ASSETS

On October 11, 2005, we acquired two long-term CO2 sales contracts with
industrial customers, along with the 80.0 Bcf of CO2 in the form of VPPs
necessary to satisfy substantially all of our expected obligations under those
contracts, from Denbury for $14.4 million in cash. We funded this acquisition
with borrowings under our credit facility. This acquisition further diversified
our asset base and provides a stable, long-term source of cash flow to us. Since
2003, we have acquired seven long-term CO2 sales contracts, along with three
VPPs representing in the aggregate 280.0 Bcf of CO2, from Denbury for a total
of $43.1 million in cash.

DISTRIBUTION INCREASE

On November 14, 2005, we paid a cash distribution of $0.16 per unit for the
quarter ended September 30, 2005. This distribution represented a 6.7% increase
from our distribution of $0.15 per unit for the second quarter of 2005.

THIRD QUARTER RESULTS

On November 3, 2005, we announced our third quarter and year-to-date
financial results. For the nine months ended September 30, 2005, we recorded
segment margin of $14.5 million, operating income of $3.7 million and net income
of $2.9 million.

ACQUISITION OF SYNGAS JOINT VENTURE

On April 1, 2005, we acquired from TCHI Inc., a wholly-owned subsidiary of
ChevronTexaco Global Energy Inc., a 50% partnership interest in T&P Syngas
Supply Company for $13.4 million in cash, which we funded with borrowings under
our credit facility. T&P Syngas is a partnership which owns a facility located
in Texas City, Texas that manufactures syngas and high-pressure steam. We
receive a proportionate share of fees under a long-term processing agreement
between the joint venture and its sole customer, Praxair Hydrogen Supply, Inc.
Under this processing agreement, the joint venture receives a fixed fee in
exchange for Praxair receiving the exclusive right to use the facility through
at least 2016. We expect our investment in T&P Syngas to provide another source
of stable, long-term cash flow and additional balance to our business.

PIPELINE INTEGRITY MANAGEMENT PROGRAM

We have substantially completed our 2005 objectives relating to the
Department of Transportation's Pipeline Integrity Management Program, or IMP,
which increased our operating costs and capital expenditures by $0.3 million and
$2.4 million, respectively, in 2004 and 2005. The IMP regulations required that
a baseline assessment be completed by March 31, 2009, with 50% of the mileage
assessed by September 30, 2005. Our Mississippi System IMP work is substantially
complete, on time and under budgeted costs.

IMPACT OF HURRICANES

Our results for the third quarter of 2005 were modestly affected by
hurricanes Dennis, Katrina and Rita that hit the Gulf Coast during such quarter.
We suffered minimal direct damage from the hurricanes. However, power outages
and damage to third parties' facilities created brief disruptions to our crude
oil gathering and pipeline operations, as well as our wholesale CO2
operations.

S-5

OTHER DEVELOPMENTS

RESTRUCTURING OF CERTAIN CRUDE OIL ARRANGEMENTS

We restructured some of our crude oil gathering, marketing and
transportation arrangements with Denbury in 2004 to provide for a fee-based
arrangement with Denbury under which we transport its crude oil on our regulated
pipelines in our Pipeline Transportation Segment. We effected that restructuring
by implementing an "incentive" tariff. Under our incentive tariff, the average
rate per barrel that we charge during any month decreases as our aggregate
throughput for that month increases above specified thresholds. Prior to this
restructuring, we handled most of our Mississippi arrangements with Denbury
using purchases and sales through our Crude Oil Gathering and Marketing Segment,
in which we purchase crude from others (including Denbury) and gather, transport
and re-sell that crude in the market. The new tariff arrangement improved our
rate of return and reduced our exposure to commodity prices.

INCREASED CAPACITY ON OUR MISSISSIPPI SYSTEM

Over the last several years, we have initiated and completed several
projects, including adding tankage and other equipment, which increased the
capacity of our Mississippi System. We undertook those projects in response to
increasing crude oil production in the area. We expect those production rates to
continue to increase primarily as a result of the broad-based CO2 tertiary
recovery projects that Denbury is currently undertaking and has announced it
will undertake in the future. We intend to develop other organic growth
opportunities related to our Mississippi System.

In 2004, we constructed a 10-mile, 10-inch CO2 pipeline that connects one
of Denbury's CO2 pipelines to the Brookhaven oil field and we constructed a
related 11-mile, 8-inch crude oil pipeline that parallels our CO2 pipeline.
This project cost $5.6 million, which we funded with borrowings under our credit
facility. We entered into a contract granting Denbury the exclusive right to use
that CO2 pipeline through 2012 in exchange for a monthly demand and commodity
charge.

OUR OFFICES

Our executive offices are located at 500 Dallas, Suite 2500, Houston, Texas
77002, and the phone number at this address is (713) 860-2500.

S-6

OWNERSHIP STRUCTURE

Below is a chart depicting our ownership structure after giving effect to
this offering.

[OWNERSHIP STRUCTURE CHART]
------------

(1) Our general partner owns all of our incentive distribution rights.

(2) Our general partner's 7.25% limited partner interest in us will be
represented by 960,342 common units.

(3) The public's 90.75% limited partner interest in us will be represented by
12,025,000 common units.

(4) The results of operations relating to our syngas investment are not
reflected in our Industrial Gases Segment because we use the equity method
to account for that investment.

S-7

THE OFFERING

Common units we are offering
to the public............... 3,400,000 common units, or 3,910,000 common
units if the underwriters exercise their
over-allotment option in full.

Common units we are offering
to our general partner in
a private offering
concurrently with this
offering.................... 271,531 common units, or 312,261 common units
if the underwriters exercise their
over-allotment option in full. The per unit
price for the sale to our general partner will
be equal to the per unit price offered to the
public through this prospectus supplement, less
an amount equal to any underwriting discounts
and fees that would apply if those units had
been offered to the public.

Common units to be outstanding
after this offering......... 12,985,342 common units, or 13,536,072 common
units if the underwriters exercise their
over-allotment option in full, including, in
each case, the common units to be purchased by
our general partner.

Common unit distributions..... Within approximately 45 days after the end of
each quarter, we will distribute all available
cash to unitholders of record on the applicable
record date. However, there is no guarantee
that we will pay a distribution on the common
units in any quarter, and we will be prohibited
from making any distributions to unitholders if
it would cause an event of default, or if an
event of default then exists, under our credit
facility.

Incentive distributions....... Our general partner is entitled to receive
incentive distributions if the amount we
distribute with respect to any quarter exceeds
levels specified in our partnership agreement.
Under the quarterly incentive distribution
provisions, the general partner is entitled to
receive 13.3% of any distributions in excess of
$0.25 per unit, 23.5% of any distributions in
excess of $0.28 per unit, and 49% of any
distributions in excess of $0.33 per unit,
without duplication.

Use of proceeds............... We will receive net proceeds from this
offering, our concurrent offering to our
general partner and the contribution from our
general partner to maintain its 2% general
partner interest of approximately $40.4
million. We will use the net proceeds to repay
indebtedness under our credit facility and for
general partnership purposes.

Risk factors.................. An investment in our common units involves
risk. See "Risk Factors" beginning on page S-10
of this prospectus supplement and page 2 of the
accompanying base prospectus and the materials
incorporated by reference for a more detailed
discussion of additional factors that you
should consider before purchasing our common
units.

S-8

Estimated ratio of taxable
income to distributions....... We estimate that if you own the common units
you purchase in this offering through the
record date for the distribution with respect
to the final calendar quarter of 2008, you will
be allocated, on a cumulative basis, an amount
of federal taxable income for that period that
will be 20% or less of the cash distributed to
you with respect to that period. Please read
"Tax Considerations" on page S-21 for the basis
of this estimate.

American Stock Exchange
symbol........................ "GEL"

S-9

RISK FACTORS

An investment in our common units involves risks. You should carefully
consider the discussion of risks set forth under the caption "Risk Factors"
beginning on page 2 of the accompanying base prospectus as well as the section
entitled "Risk Factors" included in our Annual Report on Form 10-K for the year
ended December 31, 2004, and the other documents incorporated by reference into
this prospectus supplement, prior to investing in our common units. If any of
these risks were to occur, our business, financial condition or results of
operations could be adversely affected, the trading price of our common units
could decline and you could lose all or part of your investment. Some of the
risks discussed in the base prospectus as well as the documents incorporated by
reference into this prospectus supplement are summarized below.

RISKS RELATED TO OUR BUSINESS

[ ] We may not have sufficient cash from operations to pay the current
level of quarterly distribution following the establishment of cash
reserves and payment of fees and expenses, including payments to our
general partner.

[ ] Our profitability and cash flow is dependent on our ability to
increase or, at a minimum, maintain our current commodity -- oil,
natural gas and CO2 -- volumes, which often depends on actions and
commitments by parties beyond our control.

[ ] Fluctuations in commodity prices could adversely affect our business.

[ ] Our operations are dependent upon demand for crude oil by refiners in
the Midwest and on the Gulf Coast.

[ ] We are exposed to the credit risk of our customers in the ordinary
course of our crude oil gathering and marketing activities.

[ ] Our indebtedness could adversely restrict our ability to operate,
affect our financial condition and prevent us from fulfilling our
obligations under our debt instruments and making distributions.

[ ] Our operations are subject to federal and state environmental and
safety regulations and laws related to environmental protection and
operational safety.

[ ] Our CO2 operations primarily relate to our volumetric production
payment interests, which are a finite resource and projected to
deplete around 2015.

[ ] Our CO2 operations are exposed to risks related to Denbury's
operation of their CO2 fields, equipment and pipeline.

[ ] Fluctuations in demand for CO2 by our industrial customers could
materially impact our profitability.

[ ] Our wholesale CO2 industrial operations are dependent on five
customers.

[ ] We may not be able to fully execute our growth strategy if we
encounter tight capital markets or increased competition for qualified
assets.

[ ] Our growth strategy may adversely affect our results of operations if
we do not successfully integrate the businesses that we acquire or if
we substantially increase our indebtedness and contingent liabilities
to make acquisitions.

[ ] Our actual construction, development and acquisition costs could
exceed our forecast, and our cash flow from construction and
development projects may not be immediate.

[ ] Fluctuations in interest rates could adversely affect our business.

[ ] Our use of derivative financial instruments could result in financial
losses.

[ ] A natural disaster, catastrophe or other interruption event involving
us could result in severe personal injury, property damage and
environmental damage, which could curtail our operations and otherwise
adversely affect our assets and cash flow.
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[ ] FERC regulation and a changing regulatory environment could affect our
cash flow.

[ ] Terrorist attacks aimed at the partnership's facilities could
adversely affect the business.

[ ] Denbury is the only shipper (other than us) on our Mississippi System.

[ ] We cannot cause our joint ventures to take or not to take certain
actions unless some or all of the joint venture participants agree.

[ ] Our syngas operations are dependent on one customer.

RISKS RELATED TO OUR PARTNERSHIP STRUCTURE

[ ] Denbury and its affiliates have conflicts of interest with us and
limited fiduciary responsibilities, which may permit them to favor
their own interests to your detriment.

[ ] Even if unitholders are dissatisfied, they cannot easily remove our
general partner.

[ ] The control of our general partner may be transferred to a third party
without unitholder consent, which could affect our strategic direction
and liquidity.

[ ] Our general partner and its affiliates may sell units or other limited
partner interests in the trading market, which could reduce the market
price of common units.

[ ] Our general partner has anti-dilution rights.

[ ] Due to our significant relationships with Denbury, adverse
developments concerning Denbury could adversely affect us, even if we
have not suffered any similar developments.

[ ] We may issue additional common units without your approval, which
would dilute your ownership interests.

[ ] Our general partner has a limited call right that may require you to
sell your common units at an undesirable time or price.

[ ] The interruption of distributions to us from our subsidiaries and
joint ventures may affect our ability to make payments on indebtedness
or cash distributions to our unitholders.

[ ] We do not have the same flexibility as other types of organizations to
accumulate cash and equity to protect against illiquidity in the
future.

TAX RISKS TO COMMON UNITHOLDERS

[ ] The IRS could treat us as a corporation for tax purposes, which would
substantially reduce the cash available for distribution to you.

[ ] A successful IRS contest of the federal income tax positions we take
may adversely affect the market for our common units, and the cost of
any IRS contest will be borne by our unitholders and our general
partner.

[ ] You may be required to pay taxes on income from us even if you do not
receive any cash distributions from us.

[ ] Tax gain or loss on disposition of common units could be different
than expected.

[ ] Tax-exempt entities, regulated investment companies and foreign
persons face unique tax issues from owning common units that may
result in adverse tax consequences to them.

[ ] We are registered as a tax shelter. This may increase the risk of an
IRS audit of us or you.

[ ] We will treat each purchaser of common units as having the same tax
benefits without regard to the units purchased. The IRS may challenge
this treatment, which could adversely affect the value of our common
units.

[ ] You will likely be subject to state and local taxes in states where
you do not live as a result of an investment in units.

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USE OF PROCEEDS

We will receive net cash proceeds (after payment of offering expenses) from
this offering ($36.5 million), our concurrent offering to our general partner
($3.0 million) and the contribution of cash from our general partner ($0.9
million) totaling approximately $40.4 million. The underwriters will receive no
discount or commission on the common units sold to our general partner. We will
use the net proceeds to repay indebtedness under our revolving credit facility
and for general partnership purposes, which may include, among other things,
acquiring assets (including purchasing businesses and constructing facilities),
paying distributions and satisfying working capital requirements.

During the last 12 months, we have used proceeds from our credit facility
for general partnership purposes, including:

[ ] acquiring and constructing pipelines and related infrastructure
facilities ($10.2 million);

[ ] acquiring a 50% interest in T&P Syngas ($13.4 million);

[ ] acquiring an additional VPP ($14.4 million); and

[ ] satisfying working capital requirements.

At September 30, 2005, the weighted average interest rate on the debt was
7.36%. Our credit facility matures on June 1, 2008.

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CAPITALIZATION

The following table sets forth as of September 30, 2005:

[ ] our consolidated historical capitalization; and

[ ] our consolidated capitalization as adjusted to reflect (1) the
aggregate net proceeds of approximately $40.4 million we expect to
receive from this offering, our concurrent offering to our general
partner and the contribution from our general partner to maintain its
2% general partner interest and (2) the use of the net proceeds as
described under "Use of Proceeds."

The table should be read in conjunction with our consolidated financial
statements and the notes to those financial statements that are incorporated by
reference in this prospectus supplement.

AS OF
SEPTEMBER 30, 2005
---------------------
ACTUAL AS ADJUSTED
------- -----------
(UNAUDITED)
(IN THOUSANDS)

CASH AND CASH EQUIVALENTS................................... $ 2,149 $ 9,919
======= =======
LONG-TERM DEBT.............................................. $32,600 $ 0
PARTNERS' CAPITAL:
Common unitholders........................................ 42,994 82,505
General partner........................................... 885 1,743
------- -------
Total partners' capital................................ 43,879 84,249
------- -------
TOTAL CAPITALIZATION.............................. $76,479 $84,249
======= =======

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PRICE RANGE OF COMMON UNITS AND DISTRIBUTIONS

We are required by our partnership agreement to distribute 100% of our
available cash within 45 days after the end of each quarter to our unitholders
of record and to our general partner. Available cash consists generally of all
of our cash receipts less cash disbursements adjusted for net changes to
reserves. Cash reserves are the amounts deemed necessary or appropriate, in the
reasonable discretion of our general partner, to provide for the proper conduct
of our business or to comply with applicable law, any of our debt instruments or
other agreements. The full definition of available cash is set forth in our
partnership agreement and amendments thereto, which is filed as an exhibit to
our Annual Report on Form 10-K for the year ended December 31, 2004. See "Where
You Can Find More Information."

Our general partner is entitled to receive incentive distributions if the
amount we distribute with respect to any quarter exceeds levels specified in our
partnership agreement. Under the quarterly incentive distribution provisions,
the general partner is entitled to receive 13.3% of any distributions in excess
of $0.25 per unit, 23.5% of any distributions in excess of $0.28 per unit, and
49% of any distributions in excess of $0.33 per unit, without duplication. The
likelihood and timing of the payment of any incentive distributions will depend
on our ability to increase the cash flow from our existing operations and to
make cash flow accretive acquisitions. In addition, our partnership agreement
authorizes us to issue additional equity interests in our partnership with such
rights, powers and preferences (which may be senior to our common units) as our
general partner may determine in its sole discretion, including with respect to
the right to share in distributions and profits and losses of the partnership.

At September 30, 2005, there were 9,313,811 common units outstanding, held
by approximately 5,000 record holders and beneficial owners (held in street
name), including 688,811 common units held by our general partner. The common
units are traded on the AMEX under the symbol "GEL." The following table sets
forth the high and low sales prices for the common units in each quarter, as
reported by the AMEX, and the declared cash distributions for the common units
in each quarter. The last reported sale price of common units on the AMEX on
November 29, 2005 was $11.50 per unit. On November 14, 2005, we paid a cash
distribution of $0.16 per unit for the quarter ended September 30, 2005. This
distribution represented a 6.7% increase from our distribution of $0.15 per unit
for the second quarter of 2005.

PRICE RANGE PER CASH
COMMON UNIT DISTRIBUTIONS
--------------- PER COMMON
HIGH LOW UNIT(1)
------ ------ -------------

FISCAL YEAR ENDING DECEMBER 31, 2005
Fourth Quarter (through November 29)............... $12.00 $ 9.61 $0.16
Third Quarter...................................... 12.15 9.22 0.15
Second Quarter..................................... 10.00 8.25 0.15
First Quarter...................................... 12.60 8.50 0.15

FISCAL YEAR ENDED DECEMBER 31, 2004
Fourth Quarter..................................... $12.80 $11.30 $0.15
Third Quarter...................................... 12.50 10.66 0.15
Second Quarter..................................... 13.19 8.80 0.15
First Quarter...................................... 12.65 9.65 0.15

FISCAL YEAR ENDED DECEMBER 31, 2003
Fourth Quarter..................................... $10.00 $ 6.70 $0.05
Third Quarter...................................... 7.60 5.10 0.05
Second Quarter..................................... 6.59 4.62 0.05
First Quarter...................................... 5.70 4.11 N/A

------------

(1) Cash distributions are shown in the quarter paid.

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BUSINESS

This Business section summarizes certain information about our business and
properties from the documents incorporated by reference, particularly the more
complete business description contained in our Annual Report on Form 10-K for
the year ended December 31, 2004. You should read carefully this and the other
documents incorporated by reference to understand fully our business and
properties. See "Where You Can Find More Information."

OVERVIEW

We are a growth-oriented midstream energy partnership that was formed in
1996 as a master limited partnership, or MLP. We have a diverse portfolio of
customers and assets, including pipeline transportation of primarily crude oil
and, to a lesser extent, natural gas and CO2 in the Gulf Coast region of the
United States. In conjunction with our crude oil pipeline transportation
operations, we (1) operate a crude oil gathering and marketing business, which
(among other things) helps ensure a base supply of crude oil for our pipelines,
and (2) participate in industrial gas activities, including a CO2 supply
business, which is associated with the CO2 tertiary oil recovery process being
used in Mississippi by an affiliate of our general partner. We also recently
acquired a 50% interest in a joint venture that processes natural gas to produce
syngas and high-pressure steam. We attempt to minimize our exposure to changes
in the prices of energy commodities by structuring our compensation arrangements
for each service we provide in a manner that is not directly linked to commodity
prices.

We conduct our business through subsidiaries and joint ventures. As is
customary with MLPs, our general partner is responsible for operating our
business, including providing all necessary personnel and other resources.

BUSINESS SEGMENTS

We conduct our business through three primary segments:

[ ] Pipeline Transportation

[ ] Crude Oil Gathering and Marketing

[ ] Industrial Gases

These segments are strategic business units that provide a variety of
energy related services. For information relating to revenues from external
customers, operating income and total assets of each segment, see the financial
statements incorporated by reference into this prospectus.

PIPELINE TRANSPORTATION

Our core business is the transportation of crude oil for others for a fee.
Our 230-mile Mississippi System provides shippers of crude oil in Mississippi
indirect access to refineries, pipelines, storage, terminalling and other crude
oil infrastructure located in the Midwest. Our 90-mile Texas System extends from
West Columbia to Webster, Webster to Texas City and Webster to Houston. Our
100-mile Jay System originates in eastern Alabama and the panhandle of Florida
and extends to a point near Mobile, Alabama. On a much smaller scale, we also
transport CO2 and natural gas for a fee.

Our regulated pipelines are open-access carriers whose tariff rates are
regulated by FERC or the Railroad Commission of Texas. Accordingly, we offer
transportation services to any shipper of crude oil, if the products tendered
for transportation satisfy the conditions and specifications contained in the
applicable tariff. Pipeline revenues are a function of the level of throughput
and the particular point where the crude oil was injected into the pipeline and
the delivery point. We also can earn revenue from pipeline loss allowance
volumes. In exchange for bearing the risk of pipeline volumetric losses, we
deduct volumetric pipeline loss allowances and crude quality deductions. Such
allowances and deductions are offset by measurement gains and losses. When the
allowances and deductions exceed measurement losses, the net pipeline loss
allowance volumes are earned and recognized as income and inventory available
for sale valued at the market price for
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the crude oil. Until the volumes are sold, we account for them as inventory and
value them at the lower of cost or market value. When we sell the inventory, we
recognize any difference between the carrying amount and the sale price as
additional pipeline revenue.

The margins from our pipeline operations are generated by the difference
between the revenues from regulated published tariffs, pipeline loss allowance
revenues and the fixed and variable costs of operating and maintaining our
pipelines.

Mississippi System. Our Mississippi System extends from Soso, Mississippi
to Liberty, Mississippi. Our Mississippi System includes tankage at various
locations with an aggregate storage capacity of 200,000 barrels. That system is
adjacent to several oil fields operated by Denbury, which is the sole shipper
(other than us) on our Mississippi System. As a result of its emphasis on the
tertiary recovery of crude oil using CO2 flooding, Denbury has become the
largest producer (based on average barrels produced per day) of crude oil in the
State of Mississippi, and it owns more developed CO2 reserves than anyone in
the Eastern Gulf Coast Region of the U.S. Denbury has publicly announced that,
as it continues to acquire old oil fields and develop them using CO2 based
tertiary recovery operations, Denbury expects to add crude oil gathering and
CO2 supply infrastructure to these fields. Any such increase in production
should create increased demand for our crude oil transportation services.

Denbury is a uniquely situated energy company. It is one of only a handful
of producers in the U.S. that possesses extensive CO2 tertiary recovery
expertise, as well as large quantities of low-cost CO2 reserves. Denbury has
publicly reported that, with the drilling of four CO2 wells at its Jackson
Dome Field, it owns approximately 2.7 trillion cubic feet of proved CO2
reserves as of December 31, 2004. Denbury is conducting the largest CO2
tertiary recovery operations in the Eastern Gulf Coast of the U.S., an area with
many mature oil reservoirs that potentially contain substantial volumes of
recoverable crude oil. We believe our relationship with Denbury, as well as the
geographic proximity of operations, leaves us well positioned to realize crude
oil transportation, CO2 and related opportunities with Denbury and others.

Over the last several years, we have initiated and completed several
projects that increased the capacity of our Mississippi System. We added tankage
and other equipment. During 2004, we constructed a 10-mile, 10-inch CO2
pipeline that is connected to Denbury's 183-mile pipeline that transports CO2
from their Jackson Dome CO2 reservoir. Our pipeline will move the CO2 to the
Brookhaven oil field to be used by Denbury in tertiary recovery. We entered into
a contract granting Denbury the exclusive right to use that CO2 pipeline
through 2012 in exchange for a monthly demand and commodity charge. We
constructed an 11-mile, 8-inch extension to our Mississippi oil pipeline next to
the CO2 pipeline to transport the crude oil from the Brookhaven field to our
existing pipeline. We also constructed a 5-mile extension from our existing
Mississippi crude oil pipeline to Denbury's Olive field during 2004. We
undertook those projects in response to increasing crude oil production in the
area. We expect those production rates to continue to increase primarily as a
result of the broad-based CO2 tertiary recovery projects that Denbury is
currently undertaking and has announced it will undertake in the future. We
intend to develop other organic growth opportunities related to our Mississippi
System.

Texas System. The active segments of our Texas System extend from West
Columbia to Webster, Webster to Texas City and Webster to Houston. Those
segments include approximately 90 miles of pipe. The Texas System receives all
of its volume from connections to other pipeline carriers. We earn a tariff for
our transportation services, with the tariff rate per barrel of crude oil
varying with the distance from injection
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point to delivery point. We entered into a joint tariff with TEPPCO to receive
oil from their system at West Columbia and a joint tariff with TEPPCO and
ExxonMobil Pipeline Company to receive oil from their systems at Webster. We
also continue to receive barrels from a connection with Seminole Pipeline
Company at Webster. We own tankage with approximately 110,000 barrels of storage
capacity associated with the Texas System. We lease an additional approximately
165,000 barrels of storage capacity for our Texas System in Webster. We have a
tank rental reimbursement agreement effective January 1, 2005 with the primary
shipper on our Texas System to reimburse us for the lease of that storage
capacity at Webster.

Jay System. Our Jay System begins near oil fields in southeastern Alabama
and the panhandle of Florida and extends to a point near Mobile, Alabama. Our
Jay System includes tankage with 230,000 barrels of storage capacity, primarily
at Jay Station. As a result of new production in the area surrounding our Jay
System, volumes have stabilized on that system. Until recently, producing wells
in the area were relatively mature and, consequently, had rapidly declining
future production curves. We do not know if this production from new wells will
be sufficient to continue to offset declining production from existing wells in
the area.

Should the production surrounding our Jay System decline such that it
becomes uneconomic to continue to operate that pipeline for crude oil service,
we believe that the best use of the Jay System may be to convert it to natural
gas service. We continue to review opportunities to effect such a conversion.
Part of the conversion process will involve finding alternative methods for us
to continue to provide crude oil transportation services in the area. While we
believe this initiative has long-term potential, it is not expected to have a
substantial impact on us during 2005 or 2006.

Natural Gas Pipeline. In January 2005, we acquired 14 natural gas pipeline
and gathering systems located in Texas, Louisiana and Oklahoma from Multifuels
Energy Asset Group, L.P. These 14 systems are comprised of 60 miles of pipeline
and related assets.

CRUDE OIL GATHERING AND MARKETING

Our crude oil gathering and marketing operations are concentrated in Texas,
Louisiana, Alabama, Florida, and Mississippi. These operations, which involve
purchasing, gathering and transporting by trucks and pipelines operated by us
and trucks, pipelines and barges operated by others, and reselling, help to
ensure (among other things) a base supply source for our crude oil pipeline
systems. Our profit for those services is derived from the difference between
the price at which we re-sell crude oil less the price at which we purchase that
crude oil, minus the associated costs of aggregation and any cost of supplying
credit. The most substantial component of our aggregating costs relates to
operating our fleet of leased trucks. Our crude oil gathering and marketing
activities provide us with an extensive expertise, knowledge base and skill set
that facilitates our ability to capitalize on regional opportunities which arise
from time to time in our market areas. Usually, this segment experiences limited
commodity price risk because we generally make back-to-back purchases and sales,
matching our sale and purchase volumes on a monthly basis.

Segment margin from our crude oil gathering and marketing operations varies
from period to period, depending, to a significant extent, upon changes in the
supply of and demand for crude oil and the resulting changes in U.S. crude oil
inventory levels. Generally, as we purchase crude oil, we simultaneously
establish a margin by selling crude oil for physical delivery to third-party
users, such as independent refiners or major oil companies. Through these
transactions, we seek to maintain a position that is substantially balanced
between crude oil purchases, on the one hand, and sales or future delivery
obligations, on the other hand. We do not acquire and hold crude oil, futures
contracts or other derivative products for the purpose of speculating on crude
oil price changes.

Usually, fluctuations in the market price of crude oil do not materially
impact us. When market prices for crude oil increase, we must pay more for crude
oil, but we normally are able to sell it for more. To the extent we have crude
oil inventories, market price changes can impact us if we do not have effective
hedges in place.

We provide crude oil gathering services through our fleet of leased trucks.
The trucking fleet generally hauls the crude oil to one of the approximately 60
pipeline injection stations owned or leased by us. We may

S-17

sell the crude oil as it exits our injection station and enters the pipeline, or
we may ship the crude oil on the pipeline to a point further along the
distribution chain. We also transport purchased crude oil on trucks, barges and
pipelines owned and operated by third parties.

INDUSTRIAL GASES

Our industrial gases segment is a natural outgrowth from our core business.
Because of the substantial CO2 flooding tertiary recovery operations being
utilized around our Mississippi System, we became familiar with CO2-related
activities and, ultimately, began our CO2 business in 2003. Our relationships
with industrial customers who use CO2 have expanded, which has introduced us
to potential opportunities associated with other industrial gases, such as
syngas (also known as synthesis gas), which is a combination of carbon monoxide
and hydrogen.

CO2. We supply CO2 to industrial customers under seven long-term CO2
sales contracts. We acquired those contracts, as well as the CO2 necessary to
satisfy substantially all of our expected obligations under those contracts, in
three separate transactions with Denbury. Since 2003, we have purchased those
contracts, along with three VPPs representing 280.0 Bcf of CO2 (in the
aggregate), from Denbury for a total of $43.1 million in cash. We sell our CO2
to customers who treat the CO2 and sell it to end users for use for beverage
carbonation and food chilling and freezing. Our compensation for supplying CO2
to our industrial customers is the effective difference between the price at
which we sell our CO2 under each contract and the price at which we acquired
our CO2 pursuant to our VPPs, minus transportation costs. We expect our CO2
contracts to provide stable cash flows until they expire, at which time we will
attempt to extend or replace those contracts.

Syngas. On April 1, 2005, we acquired from TCHI Inc., a wholly owned
subsidiary of ChevronTexaco Global Energy Inc., a 50% partnership interest in
T&P Syngas for $13.4 million in cash, which we funded with proceeds from our
credit facility. T&P Syngas is a partnership which owns a facility located in
Texas City, Texas that manufactures syngas and high-pressure steam. We receive a
proportionate share of fees under a long-term processing agreement between the
joint venture and its sole customer, Praxair Hydrogen Supply, Inc. Under that
processing agreement, the joint venture receives a fixed fee in exchange for
Praxair receiving the exclusive right to use the facility through at least 2016
(term extendable at Praxair's option for two additional five year terms).
Praxair also is our partner in the joint venture and owns the remaining 50%
interest.

The results of operations relating to our syngas investment are not
reflected in our Industrial Gases Segment because we use the equity method to
account for that investment.

PIPELINE INTEGRITY MANAGEMENT PROGRAM

Our pipeline integrity costs in the third quarter of 2005 totaled $0.7
million. Those costs related to the last major section of pipeline that needed
to be tested for the first time. In general, we expect to incur expenditures in
the future to comply with increasing levels of regulatory safety standards.
While the total amount of increased expenditures cannot be accurately estimated
at this time, we anticipate that we will expend a total of approximately $0.7
million during the remainder of 2005 and approximately $0.3 million in 2006 for
testing, repairs and improvements under regulations requiring assessment of the
integrity of crude oil pipelines. As testing is completed, we are required to
take prompt remedial action to address integrity issues raised by the
assessment.

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ENVIRONMENTAL MATTERS

Information regarding environmental-related regulations and occurrences
that may impact our business can be found in our reports filed with the
Securities and Exchange Commission (the "SEC") that are incorporated by
reference into this prospectus supplement and the accompanying base prospectus.
See "Where You Can Find More Information." In addition to the matters discussed
there, voluntary remediation of subsurface hydrocarbon contamination is in
process at the former Jay Trucking Facility. The estimated remediation and
related costs are $1.2 million, which we expect to share with other responsible
parties. We currently have no reason to believe that this remediation will have
a material financial effect on our financial position, results of operation, or
cash flow.

CREDIT FACILITY

We have a $100 million credit facility comprised of a $50 million revolving
line of credit for acquisitions and a $50 million working capital revolving
facility. The working capital portion of the credit facility is composed of two
components -- up to $15 million for loans and up to $35 million for letters of
credit. In total, we may borrow up to $65 million in loans under our credit
facility. At September 30, 2005, we had $11.8 million in loans and $5.8 million
in letters of credit (primarily for crude oil purchases in September 2005)
outstanding under our working capital facility and $20.8 million outstanding
under the acquisition facility.

Genesis Crude Oil, L.P., our operating subsidiary, is the borrower under
the credit facility, and each of our general partner and ourselves acts as
guarantor. Fleet National Bank is the administrative agent and Banc of America
Securities LLC is the sole lead arranger and sole book manager under the
facility.

Interest on amounts borrowed under the credit facility is equal to (x)
either the applicable Eurodollar settlement rate or the higher of the Federal
funds rate plus 1/2 of 1% or Fleet Bank's prime rate for the relevant period, at
the borrower's option, plus (y) the applicable margin rate. We are required to
pay our credit facility lenders a fee based upon amounts available but not
borrowed under each of the acquisition and working capital facilities, as well
as certain other fees. We may be required to make certain offsetting payments to
our lenders if there is a change in law that would increase our lenders' costs
or reduce their return on loans made under the credit facility. At September 30,
2005, the weighted average interest rate on the debt was 7.36%. Due to the
revolving nature of loans under our credit facility, additional borrowings and
periodic repayments and re-borrowings may be made until the maturity date of
June 1, 2008.

The aggregate amount that we may have outstanding at any time under our
working capital facility is subject to a borrowing base calculation. The
borrowing base is limited to $50 million and is calculated monthly. At September
30, 2005, the borrowing base was $50 million. The remaining amount available for
borrowings at September 30, 2005 was $3.2 million under our working capital
facility and $29.2 million under our acquisition facility.

We and all of our subsidiaries must comply with various affirmative and
negative covenants contained in our credit facility. Among other things, those
covenants limit our ability to:

[ ] incur additional indebtedness or liens;

[ ] make payments in respect of or redeem or acquire any debt or equity
issued by us;

[ ] sell assets;

[ ] make loans or investments;

[ ] extend credit;

[ ] acquire or be acquired by other companies;

[ ] enter into or amend certain existing agreements to the detriment of
the lenders under the credit facility; and

S-19

[ ] to maintain physical petroleum inventory for which there is not an
off-setting sale or hedging agreement, subject to specified
exceptions.

Our credit facility covenants also require us to achieve specified minimum
financial metrics. For example, before we may make distributions to our
partners, we must maintain a cash flow coverage ratio of at least 1.1 to 1.0. In
general, this calculation compares operating cash inflows, as adjusted in
accordance with the credit facility, less maintenance capital expenditures, to
the sum of interest expense and distributions. At September 30, 2005, our cash
flow coverage ratio was 1.1 to 1.0. Our credit facility also requires that the
level of operating cash inflows, as adjusted in accordance with the credit
facility, be at least $8.5 million. At September 30, 2005, our level of
operating cash inflows was $10.3 million. In addition, our credit facility
requires that we meet or exceed certain other financial ratios, such as a
current ratio, leverage ratio and funded indebtedness to capitalization ratio.
If we meet these covenants and are not otherwise in default under our credit
facility, we are otherwise not limited by our credit facility in making
distributions to our partners.

The covenants described above could prevent us from engaging in certain
transactions which might otherwise be considered beneficial to us. For example,
they could:

[ ] increase our vulnerability to general adverse economic and industry
conditions;

[ ] limit our ability to make distributions to unitholders; to fund future
working capital, capital expenditures and other general partnership
requirements; to engage in future acquisitions, construction or
development activities; or to otherwise fully realize the value of our
assets and opportunities because of the need to dedicate a substantial
portion of our cash flow from operations to payments on our
indebtedness or to comply with any restrictive terms of our
indebtedness;

[ ] limit our flexibility in planning for, or reacting to, changes in our
businesses and the industries in which we operate; and

[ ] place us at a competitive disadvantage as compared to our competitors
that have less debt.

Our credit facility contains customary events of default, including for
non-payment of principal and interest, failure to comply with any covenant and
failure to pay certain other of our indebtedness.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Historically, we have entered into transactions with Denbury and its
subsidiaries to acquire assets. We have instituted specific procedures for
evaluating and valuing our material transactions with Denbury and its
subsidiaries. Before we consider entering into a transaction with Denbury or any
of its subsidiaries, we determine whether the proposed transaction (1) would
comply with the requirements under our credit facility, (2) would comply with
substantive law, and (3) would be fair to us and our limited partners. In
addition, our general partner's board of directors utilizes a Special Conflicts
Committee comprised solely of independent directors. That committee:

[ ] evaluates and, where appropriate, negotiates the proposed transaction;

[ ] engages an independent financial advisor and independent legal counsel
to assist with its evaluation of the proposed transaction; and

[ ] determines whether to reject or approve and recommend the proposed
transaction.

We will only consummate any proposed material acquisition or disposition
with Denbury if, following our evaluation of the transaction, the Special
Conflicts Committee approves and recommends the proposed transaction and our
general partner's full Board approves the transaction.

Information concerning specific transactions with Denbury can be found in
reports filed with the SEC that are incorporated into this prospectus supplement
and the accompanying base prospectus by reference. See "Where You Can Find More
Information," below.

S-20

TAX CONSIDERATIONS

The tax consequences to you of an investment in common units will depend in
part on your own tax circumstances. For a discussion of the principal federal
income tax considerations associated with our operations and the purchase,
ownership and disposition of common units, please read "Material Tax
Consequences" beginning on page 29 of the accompanying base prospectus. You are
urged to consult your own tax advisor about the federal, state and local tax
consequences peculiar to your circumstances.

We estimate that if you purchase a common unit in this offering and hold
the unit through the record date for the distribution with respect to the final
calendar quarter of 2008 (assuming quarterly distributions on the common units
with respect to that period are equal to the current announced quarterly
distribution rate of $0.16 per common unit), you will be allocated an amount of
federal taxable income for that period that will be less than 20% of the amount
of cash distributed to you with respect to that period. This estimate is based
upon many assumptions regarding our business and operations, including
assumptions as to tariffs, capital expenditures, cash flows and anticipated cash
distributions. This estimate and the underlying assumptions are subject to,
among other things, numerous business, economic, regulatory, competitive and
political uncertainties beyond our control and to tax reporting positions that
we have adopted. The Internal Revenue Service could disagree with our tax
reporting positions, including estimates of the relative fair market values of
our assets and the validity of certain allocations. Accordingly, we cannot
assure you that the estimate will be correct. The actual percentage of
distributions that will constitute taxable income could be higher or lower than
our estimate of 20% or less, and any differences could be material and could
materially affect the value of the common units. For example, the ratio of
allocable taxable income to cash distributions could be greater, and perhaps
substantially greater, than 20% with respect to the period described above if:

[ ] gross income from operations exceeds the amount required to make the
minimum quarterly distribution on all units, yet we only distribute
the minimum quarterly distribution on all units; or

[ ] we make a future offering of common units and use the proceeds of the
offering in a manner that does not produce substantial additional
deductions during the period described above, such as to repay
indebtedness outstanding at the time of this offering or to acquire
property that is not eligible for depreciation or amortization for
federal income tax purposes or that is depreciable or amortizable at a
rate significantly slower than the rate applicable to our assets at
the time of this offering.

Ownership of common units by tax-exempt entities, regulated investment
companies and foreign investors raises issues unique to such persons. Please
read "Material Tax Consequences -- Tax-Exempt Organizations and Other Investors"
beginning on page 38 of the accompanying base prospectus.

S-21

MANAGEMENT

As is common with MLPs, we do not directly employ any persons responsible
for managing or operating our activities or for providing services relating to
day-to-day business affairs. Our general partner provides such services and is
reimbursed for its direct and indirect costs and expenses, including all
compensation and benefit costs.

The board of directors of our general partner is composed of eight members.
Four of the directors, including the Chairman of the Board, are executives of
Denbury. In addition, our Chief Executive Officer serves on the board. The three
remaining directors are "independent directors" as contemplated by the rules of
the American Stock Exchange.

DIRECTORS AND EXECUTIVE OFFICERS OF OUR GENERAL PARTNER

The following table sets forth certain information concerning the directors
and executive officers of our general partner. All executive officers serve at
the discretion of our general partner.

NAME AGE POSITION(S)
---- --- -----------

Gareth Roberts.............. 52 Director and Chairman of the Board
Mark J. Gorman.............. 51 Director, Chief Executive Officer and President
Ronald T. Evans............. 43 Director
Herbert I. Goodman.......... 82 Director
Susan O. Rheney............. 46 Director
Phil Rykhoek................ 49 Director
J. Conley Stone............. 74 Director
Mark A. Worthey............. 47 Director
Ross A. Benavides........... 52 Chief Financial Officer, General Counsel and Secretary
Kerry W. Mazoch............. 59 Vice President, Crude Oil Acquisitions
Karen N. Pape............... 47 Vice President and Controller

GARETH ROBERTS has served as a director and Chairman of the Board of the
general partner since May 2002. Mr. Roberts is President, Chief Executive
Officer and a director of Denbury Resources Inc. and has been employed by
Denbury since 1992.

MARK J. GORMAN has served as a director of the general partner since
December 1996 and as President and Chief Executive Officer since October 1999.
From December 1996 to October 1999 he served as Executive Vice President and as
Chief Operating Officer from October 1997 to October 1999. He was President of
Howell Crude Oil Company, a wholly-owned subsidiary of Howell Corporation, from
September 1992 to December 1996.

RONALD T. EVANS has served as a director of the general partner since May
2002. Mr. Evans is Senior Vice President of Reservoir Engineering of Denbury and
has been employed by Denbury since September 1999. Before joining Denbury, Mr.
Evans was employed as Engineering Manager with Matador Petroleum Corporation for
three years and employed by Enserch Exploration, Inc. for twelve years in
various positions.

HERBERT I. GOODMAN has served as a director of the general partner since
January 1997. During 2001, he served as the Chief Executive Officer of
PEPEX.NET, LLC, which provides electronic trading solutions to the international
oil industry. Since 2002 he has served as Chairman of PEPEX.NET, LLC. He was
Chairman of IQ Holdings, Inc., a manufacturer and marketer of
petrochemical-based consumer products until 2004. From 1988 until 1996 he was
Chairman and Chief Executive Officer of Applied Trading Systems, Inc., a trading
and consulting business.

SUSAN O. RHENEY became a director of the general partner in March 2002. Ms.
Rheney is a private investor and formerly was a principal of The Sterling Group,
L.P., a private financial and investment

S-22

organization, from 1992 to 2000. Ms. Rheney is a director of Cenveo, Inc., a
supplier of printing services and products, where she serves on the audit and
governance and nominating committees.

PHIL RYKHOEK has served as a director of the general partner since May
2002. Mr. Rykhoek is Chief Financial Officer, Senior Vice President, Secretary
and Treasurer of Denbury, and has been employed by Denbury since 1995.

J. CONLEY STONE has served as a director of the general partner since
January 1997. From 1987 to his retirement in 1995, he served as President, Chief
Executive Officer, Chief Operating Officer and director of Plantation Pipe Line
Company, a common carrier liquid petroleum products pipeline transporter.

MARK A. WORTHEY has served as a director of the general partner since May
2002. Mr. Worthey is Senior Vice President, Operations for Denbury and has been
employed by Denbury since September 1992.

ROSS A. BENAVIDES has served as Chief Financial Officer of the general
partner since October 1998. He has served as General Counsel and Secretary since
December 1999.

KERRY W. MAZOCH has served as Vice President, Crude Oil Acquisitions, of
the general partner since August 1997. From 1991 to 1997 he held the position of
Vice President and General Manager of Crude Oil Acquisitions at Northridge
Energy Marketing Corp., a wholly-owned subsidiary of TransCanada Pipelines
Limited.

KAREN N. PAPE was named Vice President and Controller of the general
partner effective in March 2002. Ms. Pape served as Controller and as Director
of Finance and Administration of the general partner since December 1996. From
1990 to 1996, she was Vice President and Controller of Howell Corporation.

S-23

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

We believe that investors benefit from having access to the same financial
measures being utilized by management.

Segment margin forms the basis of our internal financial reporting and is
used by senior management in deciding how to allocate capital resources among
business segments. We believe that investors benefit from having access to the
same financial measures that our management uses in evaluating segment results.
The U.S. Generally Accepted Accounting Principles, or GAAP, measure most
directly comparable to total segment margin is operating income from continuing
operations.

We define segment margin as revenues less costs of sales and operating
expenses. This measure is exclusive of depreciation and amortization, general
and administrative expenses, and any gains or losses on asset disposals. It also
excludes the effects of any adjustments for the effects of derivative
accounting, minority interests and the cumulative effect of any accounting
changes.

Segment margin was calculated as revenues less cost of sales and operations
expense. A reconciliation of segment margin (a non-GAAP performance measure) to
operating income from continuing operations (the GAAP measure) for the nine
months ended September 30, 2005 is as follows:

NINE MONTHS ENDED
SEPTEMBER 30, 2005
------------------
(IN THOUSANDS)

Segment margin excluding depreciation and amortization...... $14,489
General and administrative expenses......................... 6,536
Depreciation, amortization and impairment................... 4,695
Net gain on disposal of surplus assets...................... (482)
-------
Operating income from continuing operations................. $ 3,740
=======

Available cash is a liquidity measure used by our management to compare
cash flows generated by us to the cash distribution we pay to our limited
partners and the general partner. This is an important financial measure to our
public unitholders since it is an indicator of our ability to provide a cash
return on their investment. Specifically, this financial measure tells investors
whether or not we are generating cash flows at a level that can support a
quarterly cash distribution to our partners. Lastly, available cash (also
referred to as distributable cash flow) is a quantitative standard used
throughout the investment community with respect to publicly-traded
partnerships.

Several adjustments to net income are required to calculate available cash.
These adjustments include: (1) the addition of non-cash expenses such as
depreciation and amortization expense; (2) miscellaneous non-cash adjustments
such as the addition of decreases or the subtraction of increases in the accrual
for our stock appreciation rights plan expense and the value of financial
instruments; and (3) the subtraction of maintenance capital expenditures.
Maintenance capital expenditures are capital expenditures (as defined by GAAP)
to replace or enhance partially or fully depreciated assets in order to sustain
the existing operating capacity or efficiency of our assets and extend their
useful lives.

S-24

The reconciliation of available cash (a non-GAAP liquidity measure) to cash
flow from operating activities (the GAAP measure) for the nine months ended
September 30, 2005, is as follows:

NINE MONTHS ENDED
SEPTEMBER 30, 2005
------------------
(IN THOUSANDS)

Cash flows from operating activities........................ $ 4,243
Adjustments to reconcile operating cash flows to Available
Cash:
Maintenance capital expenditures.......................... (1,125)
Proceeds from sales of certain assets..................... 1,581
Amortization of credit facility issuance fees............. (279)
Cash effects of stock appreciation rights plan............ (59)
Effect of distributions from T&P Syngas................... 563
Net effect of changes in working capital accounts not
included in calculation of Available Cash.............. 2,139
-------
Available Cash before reserves.............................. $ 7,063
=======

S-25

UNDERWRITING

The underwriters named below have severally agreed, subject to the terms
and conditions of the underwriting agreement between the underwriters and us, to
purchase from us the respective number of common units indicated in the
following table at the public offering price less the underwriting discount set
forth on the cover page of this prospectus supplement.

UNDERWRITER COMMON UNITS
----------- ------------

A.G. Edwards & Sons, Inc. ..................................
RBC Capital Markets Corporation.............................
---------
Total.................................................. 3,400,000
=========

Our general partner will purchase an aggregate of 271,531 common units, or
312,261 common units if the underwriters exercise their over-allotment option in
full, concurrently with this offering directly from us at a price equal to the
public offering price, less an amount equal to any underwriting discounts and
fees that would apply if those units had been offered to the public. The
underwriters will not receive any discount or commission on the sale of these
common units.

The underwriting agreement provides that the obligations of the
underwriters to purchase the common units depend on the satisfaction of the
conditions contained in the underwriting agreement, which include:

[ ] the representations and warranties made by us to the underwriters are
true;

[ ] there has been no material adverse change in our condition or in the
financial markets; and

[ ] we deliver to the underwriters customary closing documents.

The underwriters are obligated to take and pay for all of the common units
offered by this prospectus supplement, other than those covered by the
over-allotment option described below, if any are taken.

The underwriters have advised us that they propose initially to offer the
common units to the public at the public offering price set forth on the cover
page of this prospectus supplement and to certain dealers at such price less a
concession not in excess of $ per unit. The underwriters may allow, and such
dealers may re-allow, a concession not in excess of $ per unit to certain
other dealers. After the offering, the offering price and other selling terms
may be changed by the underwriters, but any such changes will not affect the net
proceeds to be received by us in the offering.

We have granted to the underwriters an option, exercisable for 30 days
after the date of this prospectus supplement, to purchase up to an additional
510,000 common units at the public offering price, less the underwriting
discount and commissions set forth on the cover page of this prospectus
supplement. The underwriters may exercise such option solely to cover
over-allotments, if any, made in connection with the sale of common units that
the underwriters have agreed to purchase.

To the extent the underwriters exercise such option, the underwriters will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional units as the number set forth next to such
underwriter's name in the preceding table bears to the total number of units in
the table, and we will be obligated, pursuant to the option, to sell such units
to the underwriters.

We, our general partner and certain of the directors and executive officers
of our general partner have agreed that during the 90 days following the date of
this prospectus, we and they will not, without the prior written consent of A.G.
Edwards & Sons, Inc., directly or indirectly, offer for sale, sell, pledge,
grant any option, right or warrant with respect to, enter into any derivative
transaction with similar effect as a sale or otherwise dispose of any common
units, any securities convertible into or exchangeable for common units, other
than in specified cases pursuant to employee benefit plans as in existence as of
the date of this prospectus, pursuant to options, rights or warrants outstanding
on the date of this prospectus, and in connection with the acquisition of assets
or businesses by us or our subsidiaries and in private-placement

S-26

offerings (so long as the recipients of the common units in such acquisition
transactions or private-placement offerings enter into lock-up arrangements
substantially the same as those described above).

A.G. Edwards & Sons, Inc. may, in its sole discretion, allow any of these
parties to offer for sale, sell, pledge, grant any option, right or warrant with
respect to, enter into any derivative transaction with similar effect as a sale
or otherwise dispose of any common units, any securities convertible into or
exchangeable for, common units or any other rights to acquire such common units
prior to the expiration of such 90-day period in whole or in part at anytime
without notice. A.G. Edwards & Sons, Inc. has informed us that in the event that
consent to a waiver of these restrictions is requested by us or any other
person, A.G. Edwards & Sons, Inc., in deciding whether to grant its consent,
will consider the unitholder's reasons for requesting the release, the number of
units for which the release is being requested and market conditions at the time
of the request for such release. However, A.G. Edwards & Sons, Inc. has informed
us that as of the date of this prospectus there are no agreements between A.G.
Edwards & Sons, Inc. and any party that would allow such party to transfer any
common units, nor does it have any present intention of releasing any of the
common units subject to the lock-up agreements prior to the expiration of the
lock-up period at this time. The 90-day lock up period will be extended if:

[ ] during the last 17 days of the 90-day period we issue an earnings
release or material news or a material event relating to our
partnership occurs; or

[ ] prior to the expiration of the 90-day period, we announce that we will
release earnings results during the 16 day period beginning on the
last day of the 90-day period;

in which case the restrictions described in this paragraph will continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.

The following table summarizes the discounts that we will pay to the
underwriters in connection with the offering. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase
additional common units.

TOTAL
---------------------------
PER COMMON UNIT NO EXERCISE FULL EXERCISE
--------------- ----------- -------------

Underwriting discount paid by us...... $ $ $

We expect to incur expenses, other than underwriting discounts and
commissions, of approximately $600,000 in connection with this offering.

We, our general partner and Genesis Crude Oil, L.P. have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments that may be required with
respect to these liabilities.

Our common units are listed on the American Stock Exchange under the symbol
"GEL."

Until the distribution of the common units is completed, rules of the SEC
may limit the ability of the underwriters and certain selling group members to
bid for and purchase the common units. As an exception to these rules, the
underwriters are permitted to engage in certain transactions that stabilize,
maintain or otherwise affect the price of the common units.

In connection with this offering, the underwriters may engage in
stabilizing transactions, over-allotment transactions, syndicate covering
transactions and penalty bids in accordance with Regulation M under the
Securities Exchange Act of 1934.

[ ] Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.

[ ] Over-allotment transactions involve sales by the underwriters of the
common units in excess of the number of units the underwriters are
obligated to purchase, which creates a syndicate short position. The
short position may be either a covered short position or a naked short
position. In a covered

S-27

short position, the number of units over-allotted by the underwriters
is not greater than the number of units they may purchase in the
over-allotment option. In a naked short position, the number of units
involved is greater than the number of units in the over-allotment
option. The underwriters may close out any short position by either
exercising their over-allotment option and/or purchasing common units
in the open market.

[ ] Syndicate covering transactions involve purchases of the common units
in the open market after the distribution has been completed in order
to cover syndicate short positions. In determining the source of the
common units to close out the short position, the underwriters will
consider, among other things, the price of common units available for
purchase in the open market as compared to the price at which they may
purchase common units through the over-allotment option. If the
underwriters sell more common units than could be covered by the
over-allotment option, resulting in a naked short position, the
position can only be closed out by buying common units in the open
market. A naked short position is more likely to be created if the
underwriters are concerned that there could be downward pressure on
the price of the common units in the open market after pricing that
could adversely affect investors who purchase in the offering.

[ ] Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the common units originally
sold by the syndicate member are purchased in a stabilizing or
syndicate covering transaction to cover syndicate short positions.

Similar to other purchase transactions, the underwriters' purchases to
cover the syndicate short sales may have the effect of raising or maintaining
the market price of the common units or preventing or retarding a decline in the
market price of the common units. As a result, the price of the common units may
be higher than the price that might otherwise exist in the open market. These
transactions may be effected on the American Stock Exchange or otherwise.

The underwriters will deliver a prospectus to all purchasers of common
units in the short sales. The purchasers of common units in short sales are
entitled to the same remedies under the federal securities laws as any other
purchaser of common units covered by this prospectus.

Neither we nor any of the underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common units. In addition, neither
we nor any of the underwriters make any representation that the underwriters
will engage in the transactions or that the transactions, once commenced, will
not be discontinued without notice.

A prospectus in electronic format may be made available on Internet sites
or through other online services maintained by the underwriters and/or selling
group members participating in this common unit offering, or by their
affiliates. In those cases, prospective investors may view offering terms online
and, depending upon the particular underwriters or selling group members,
prospective investors may be allowed to place orders online. The underwriters
may agree with us to allocate a specific number of common units for sale to
online brokerage account holders. Any such allocation for online distributions
will be made by underwriters on the same basis as other allocations.

Other than the prospectus in electronic format, the information on the
underwriters' or selling group members' website and any information contained in
any other website maintained by the underwriters or selling group members is not
part of the prospectus or the registration statement of which this prospectus
forms a part, has not been approved and/or endorsed by us or the underwriters or
selling group members in their capacity as underwriters or selling group members
and should not be relied upon by investors.

Because the National Association of Securities Dealers, Inc., or the NASD,
views the common units offered hereby as interests in a direct participation
program, the offering is being made in compliance with Rule 2810 of the NASD's
Conduct Rules. Investor suitability with respect to the common units should be
judged similarly to the suitability with respect to other securities that are
listed for trading on a national securities exchange.

S-28

In no event will the maximum amount of compensation to be paid to NASD
members in connection with this offering exceed 10% of the gross proceeds (plus
0.5% for bona fide, accountable due diligence expenses).

No sales to accounts over which any underwriter exercises discretionary
authority may be made without the prior written approval of the customer.

LEGAL MATTERS

The validity of the common units being offered and certain tax matters
relating to those units will be passed upon for us by Akin Gump Strauss Hauer &
Feld LLP, Houston, Texas. Certain legal matters with respect to the legality of
the common units being offered will be passed upon for the underwriters by Baker
Botts L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements and management's report on the
effectiveness of internal control over financial reporting incorporated in this
prospectus by reference from the Company's Annual Report on Form 10-K/A have
been audited by Deloitte & Touche LLP, an independent registered public
accounting firm, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.

The balance sheet at December 31, 2004 of Genesis Energy, Inc. incorporated
in this prospectus by reference has been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing in the Current Report
on Form 8-K of Genesis Energy, L.P. filed on July 26, 2005, and has been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

The financial statements of T&P Syngas Supply Company as of and for the
years ended December 31, 2004 and 2003, incorporated in this prospectus by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing in the Current Report on Form 8-K/A of Genesis
Energy, L.P. filed on June 16, 2005, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.

FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying base prospectus contain or
incorporate by reference forward-looking statements within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934. Where any
forward-looking statement includes a statement of the assumptions or bases
underlying the forward-looking statement, we caution that, while we believe
these assumptions or bases to be reasonable and made in good faith, assumed
facts or bases almost always vary from the actual results, and the differences
between assumed facts or bases and actual results can be material, depending
upon the circumstances. Where, in any forward-looking statement, we or our
management express an expectation or belief as to future results, such
expectation or belief is expressed in good faith and is believed to have a
reasonable basis. We cannot assure you, however, that the statement of
expectation or expressions may identify forward-looking statements. These
statements relate to analyses and other information which are based on forecasts
of future results and estimates of amounts not yet determinable. These
statements also relate to our future prospects, developments and business
strategies. These forward-looking statements are identified by their use of
terms and phrases such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "predict," "project," "will," and similar
terms and phrases, including references to assumptions. These statements are
contained in the sections entitled "Genesis Energy, L.P." and "Risk Factors" and
other sections of this prospectus supplement, the accompanying base prospectus
and in the documents we have incorporated by reference. These forward-looking
statements involve risks and uncertainties that may cause our actual future
activities and results of operations to be materially different from those
suggested or described in this prospectus supplement, the accompanying base
prospectus or the documents

S-29

we have incorporated by reference. These risks include the risks that are
identified in this prospectus supplement in the "Risk Factors" section, as well
as the section entitled "Risk Factors" included in our Annual Report on Form
10-K for the year ended December 31, 2004, and the other documents incorporated
by reference. These risks may also be specifically described in our Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and 8-K/A and other documents
we have filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future or otherwise. If one or more of these
risks or uncertainties materialize, or if underlying assumptions prove
incorrect, our actual results may vary materially from those expected, estimated
or projected.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and other reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
room at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-732-0330 for further information on their public reference room. Our SEC
filings are also available at the SEC's website at http://www.sec.gov. You can
also obtain information about us at the offices of the American Stock Exchange,
86 Trinity Place, New York, New York 10006.

The SEC allows us to incorporate by reference information we file with it.
This procedure means that we can disclose important information to you by
referring you to documents filed with the SEC. The information we incorporate by
reference is part of this prospectus supplement and the accompanying base
prospectus, and later information that we file under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, and which is deemed to be "filed,"
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below:

[ ] Annual Report on Form 10-K and 10-K/A for the year ended December 31,
2004;

[ ] Quarterly Reports on Form 10-Q for the quarters ended March 31, 2004,
June 30, 2005 and September 30, 2005; and

[ ] Current Reports on Form 8-K and 8-K/A dated January 19, 2005, February
7, 2005, April 7, 2005, June 6, 2005, June 15, 2005, June 16, 2005,
July 26, 2005, October 13, 2005 and November 3, 2005.

You may request a copy of these filings at no cost by making written or
telephone requests for copies to:

Investor Relations
Genesis Energy, L.P.
500 Dallas, Suite 2500
Houston, Texas 77002
(713) 860-2500 or
(800) 284-3365

We also make available free of charge on our internet website at
http://www.genesiscrudeoil.com our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to
those reports, as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC. Information contained on our
website is not part of this prospectus.

You should rely only on the information incorporated by reference or
provided in this prospectus supplement and the accompanying base prospectus. We
have not authorized anyone else to provide you with any information. You should
not assume that the information incorporated by reference or provided in this
prospectus supplement and the accompanying base prospectus is accurate as of any
date other than the date on the front of each document.

S-30

PROSPECTUS

GENESIS ENERGY, L.P.

------------------

$250,000,000 OF EQUITY SECURITIES

------------------

We may offer one or more classes or series of equity securities, as
described in this prospectus, in one or more separate offerings under this
prospectus. This prospectus describes the general terms of these equity
securities and the general manner in which we will offer the equity securities.

We may offer and sell equity securities using this prospectus only if it is
accompanied by a prospectus supplement. We will include the specific terms of
any equity securities we offer in a supplement to this prospectus. The
prospectus supplement will also describe the specific manner in which we will
offer the equity securities. You should read this prospectus and the prospectus
supplement carefully.

We may sell these equity securities to underwriters or dealers, or we may
sell them directly to other purchasers. See "Plan of Distribution." The
prospectus supplement will list any underwriters and the compensation they will
receive. The prospectus supplement will also show you the total amount of money
that we will receive from selling these equity securities, after we pay certain
expenses of the offering.

Our common units are listed on the American Stock Exchange under the symbol
"GEL."

INVESTING IN OUR EQUITY SECURITIES INVOLVES RISKS. LIMITED PARTNERSHIPS ARE
INHERENTLY DIFFERENT FROM CORPORATIONS. YOU SHOULD CAREFULLY CONSIDER THE RISK
FACTORS BEGINNING ON PAGE 2 OF THIS PROSPECTUS BEFORE YOU MAKE AN INVESTMENT IN
OUR EQUITY SECURITIES.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE EQUITY SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The date of this prospectus is August 30, 2005.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS....................................... 1
ABOUT GENESIS ENERGY, L.P. AND GENESIS CRUDE OIL, L.P. ..... 1
RISK FACTORS................................................ 2
Risks Related to Our Business............................. 2
Risks Related to Our Partnership Structure................ 8
Tax Risks to Common Unitholders........................... 12
USE OF PROCEEDS............................................. 15
DESCRIPTION OF OUR EQUITY SECURITIES........................ 16
General................................................... 16
Our Common Units.......................................... 16
Our Equity Securities Other Than Common Units............. 19
CASH DISTRIBUTION POLICY.................................... 19
Distributions of Available Cash........................... 19
Operating Surplus and Capital Surplus..................... 20
Distributions of Available Cash from Operating Surplus.... 21
Distributions from Capital Surplus........................ 22
Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.................................... 22
Distributions of Cash Upon Liquidation.................... 23
DESCRIPTION OF OUR PARTNERSHIP AGREEMENT.................... 25
Purpose................................................... 25
Power of Attorney......................................... 25
Reimbursements of Our General Partner..................... 25
Issuance of Additional Securities......................... 25
Amendments to Our Partnership Agreement................... 26
Withdrawal or Removal of Our General Partner.............. 26
Liquidation and Distribution of Proceeds.................. 27
Change of Management Provisions........................... 27
Limited Call Right........................................ 27
Indemnification........................................... 27
Registration Rights....................................... 28
MATERIAL TAX CONSEQUENCES................................... 29
Partnership Status........................................ 29
Limited Partner Status.................................... 30
Tax Consequences of Unit Ownership........................ 31
Tax Treatment of Operations............................... 35
Disposition of Common Units............................... 36
Uniformity of Units....................................... 38
Tax-Exempt Organizations and Other Investors.............. 38
Administrative Matters.................................... 39
State, Local and Other Tax Considerations................. 41
INVESTMENT IN GENESIS BY EMPLOYEE BENEFIT PLANS............. 41
PLAN OF DISTRIBUTION........................................ 43
WHERE YOU CAN FIND MORE INFORMATION......................... 43
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS............ 44
LEGAL MATTERS............................................... 45
EXPERTS..................................................... 45

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS, ANY
PROSPECTUS SUPPLEMENT AND THE DOCUMENTS WE HAVE INCORPORATED BY REFERENCE. WE
HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE EQUITY SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. WE WILL DISCLOSE ANY MATERIAL CHANGES IN OUR AFFAIRS IN AN AMENDMENT
TO THIS PROSPECTUS, A PROSPECTUS SUPPLEMENT OR A FUTURE FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION INCORPORATED BY REFERENCE IN THIS PROSPECTUS
AND ANY PROSPECTUS SUPPLEMENT. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS.
i

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-3 that we
have filed with the Securities and Exchange Commission or the "Commission,"
using a "shelf " registration process. Under this shelf registration process, we
may sell one or more series or classes of equity securities, more particularly
described in this prospectus, in one or more offerings up to an aggregate
offering price of $250,000,000. This prospectus generally describes Genesis
Energy, L.P. and Genesis Crude Oil, L.P. and our equity securities, including
our common units. Each time we sell equity securities with this prospectus, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add to,
update or change information in this prospectus. The information in this
prospectus is accurate as of the date on the cover page. You should carefully
read both this prospectus and any prospectus supplement, together with
additional information described under the heading "Where You Can Find More
Information" before you invest in our equity securities.

ABOUT GENESIS ENERGY, L.P. AND GENESIS CRUDE OIL, L.P.

Genesis Energy, L.P., a Delaware limited partnership, was formed in
December 1996. We conduct our operations through our operating subsidiary,
Genesis Crude Oil, L.P. and its subsidiaries, Genesis Pipeline Texas, L.P.,
Genesis Pipeline USA, L.P., Genesis Natural Gas Pipeline, L.P., Genesis CO(2)
Pipeline, L.P. and Genesis Syngas Investments, L.P. We are engaged in three
operations -- crude oil gathering and marketing; crude oil, natural gas and
carbon dioxide (CO(2)) pipeline transportation; and CO(2) operations.

We are an independent gatherer and marketer of crude oil. Our gathering and
marketing operations are concentrated in Texas, Louisiana, Alabama, Florida, and
Mississippi. Our gathering and marketing margins are generated by buying crude
oil at competitive prices, efficiently transporting or exchanging the crude oil
and marketing the crude oil to customers. We utilize our trucking fleet of 54
leased tractor-trailers and our gathering lines to transport crude oil. We also
transport purchased crude oil on trucks, barges and pipelines owned and operated
by third parties.

Our pipeline transportation operations primarily relate to the
transportation of crude oil at regulated published tariffs on our three common
carrier pipeline systems. Those systems are the Texas System, the Jay System
extending between Florida and Alabama, and the Mississippi System. The Jay and
Mississippi pipeline systems have numerous points where the crude oil owned by
the shipper can be injected into the pipeline for delivery to or transfer to
connecting pipelines. The Texas pipeline system receives all of its volume from
connections to other carriers. We earn a tariff for the transportation services,
with the tariff rate per barrel of crude oil varying with the distance from
injection point to delivery point. We also transport natural gas and carbon
dioxide on various small gathering and pipeline systems located in Texas,
Louisiana and Mississippi.

In November 2003, we entered the CO(2) business. During 2003 and 2004, we
acquired volumetric production payments from Denbury Resources Inc. or Denbury
Resources, to provide us with 200.5 billion cubic feet (Bcf) of CO(2). We also
acquired from Denbury Resources five of its long-term industrial supply
contracts for CO(2). We ship the CO(2) from its source to customers on a
pipeline owned by Denbury Resources and sell the CO(2) to the customers. These
sales contracts extend through 2015.

Genesis Energy, Inc. serves as our sole general partner. Our general
partner is owned by Denbury Gathering & Marketing, Inc., a subsidiary of Denbury
Resources. Our general partner was acquired by Denbury Resources from Salomon
Smith Barney Holdings Inc. and Salomon Brothers Holding Company Inc. in May
2002.

Our executive offices are located at 500 Dallas, Suite 2500, Houston, Texas
77002 and our telephone number is (713) 860-2500.

As used in this prospectus, "we," "us," "our" and "Genesis" means Genesis
Energy, L.P. and, where the context requires, our operating company, Genesis
Crude Oil, L.P. and its subsidiaries.

RISK FACTORS

An investment in our equity securities involves risks. You should consider
carefully the following risk factors, together with all of the other information
included in, or incorporated by reference into, this prospectus and any
prospectus supplement in evaluating an investment in our equity securities. This
prospectus also contains forward-looking statements that involve risks and
uncertainties. Please read "Forward-Looking Statements." Our actual results
could differ materially from those anticipated in the forward-looking statements
as a result of certain factors, including the risks described below and
elsewhere in this prospectus. If any of these risks occur, our business,
financial condition or results of operation could be adversely affected.

RISKS RELATED TO OUR BUSINESS

WE MAY NOT HAVE SUFFICIENT CASH FROM OPERATIONS TO PAY THE CURRENT LEVEL OF
QUARTERLY DISTRIBUTION FOLLOWING THE ESTABLISHMENT OF CASH RESERVES AND PAYMENT
OF FEES AND EXPENSES, INCLUDING PAYMENTS TO OUR GENERAL PARTNER.

The amount of cash we distribute on our units principally depends upon
margins we generate from our crude oil gathering and marketing operations,
margins from the pipeline transportation operations and sales of CO(2), which
will fluctuate from quarter to quarter based on, among other things:

[ ] the prices at which we purchase and sell crude oil;

[ ] the volumes of crude oil we transport;

[ ] the volumes of CO(2) we sell;

[ ] the level of our operating costs;

[ ] the level of our general and administrative costs; and

[ ] prevailing economic conditions.

In addition, the actual amount of cash we will have available for
distribution will depend on other factors that include:

[ ] the level of capital expenditures we make, including the cost of
acquisitions (if any);

[ ] our debt service requirements;

[ ] fluctuations in our working capital;

[ ] restrictions on distributions contained in our debt instruments;

[ ] our ability to borrow under our working capital facility to pay
distributions; and

[ ] the amount of cash reserves established by our general partner in its
sole discretion in the conduct of our business.

You should also be aware that our ability to pay quarterly distributions
each quarter depends primarily on our cash flow, including cash flow from
financial reserves and working capital borrowings, and is not solely a function
of profitability, which will be affected by non-cash items. As a result, we may
make cash distributions during periods when we record losses and we may not make
distributions during periods when we record net income.

OUR INDEBTEDNESS COULD ADVERSELY RESTRICT OUR ABILITY TO OPERATE, AFFECT OUR
FINANCIAL CONDITION, PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER OUR DEBT
INSTRUMENTS AND MAKING DISTRIBUTIONS.

We have outstanding indebtedness and the ability to incur more
indebtedness. As of December 31, 2004, we had approximately $15.3 million
outstanding of senior secured indebtedness and approximately $75.4 million
outstanding of accounts payable.

We and all of our subsidiaries must comply with various affirmative and
negative covenants contained in our credit facilities. Among other things, these
covenants limit the ability of us and our subsidiaries to:

[ ] incur additional indebtedness or liens;

[ ] make payments in respect of or redeem or acquire any debt or equity
issued by us;

[ ] sell assets;

[ ] make loans or investments;

[ ] extend credit;

[ ] acquire or be acquired by other companies; and

[ ] amend some of our contracts.

The restrictions under our indebtedness may prevent us from engaging in
certain transactions which might otherwise be considered beneficial to us and
could have other important consequences to you. For example, they could:

[ ] increase our vulnerability to general adverse economic and industry
conditions;

[ ] limit our flexibility in planning for, or reacting to, changes in our
businesses and the industries in which we operate; and

[ ] place us at a competitive disadvantage as compared to our competitors
that have less debt.

We may incur additional indebtedness (public or private) in the future,
either under our existing credit facilities, by issuing debt instruments, under
new credit agreements, under joint venture credit agreements, under capital
leases or synthetic leases, on a project finance or other basis, or a
combination of any of these. If we incur additional indebtedness in the future,
it likely would be under our existing credit facility or under arrangements
which may have terms and conditions at least as restrictive as those contained
in our existing credit facilities. Failure to comply with the terms and
conditions of any existing or future indebtedness would constitute an event of
default. If an event of default occurs, the lenders will have the right to
accelerate the maturity of such indebtedness and foreclose upon the collateral,
if any, securing that indebtedness. If an event of default occurs under our
joint ventures' credit facilities, we may be required to repay amounts
previously distributed to us and our subsidiaries. In addition, if there is a
change of control as described in our credit facility, that would be an event of
default, unless our creditors agreed otherwise, under our credit facility. Any
such event could limit our ability to fulfill our obligations under our debt
instruments and to make cash distributions to unitholders which could adversely
affect the market price of our securities.

OUR PROFITABILITY AND CASH FLOW IS DEPENDENT ON OUR ABILITY TO INCREASE OR, AT
A MINIMUM, MAINTAIN OUR CURRENT COMMODITY -- OIL, NATURAL GAS AND
CO(2) -- VOLUMES, WHICH OFTEN DEPENDS ON ACTIONS AND COMMITMENTS BY PARTIES
BEYOND OUR CONTROL.

Our profitability and cash flow is dependent on our ability to increase or,
at a minimum, maintain our current commodity -- oil, natural gas and
CO(2) -- volumes. We access commodity volumes through two sources, producers and
service providers (including gatherers, shippers, marketers and other
aggregators). Depending on the needs of each customer and the market in which it
operates, we can either provide a service for a fee (as in the case of our
pipeline transportation operations) or we can purchase the commodity from our
customer and resell it to another party (as in the case of oil marketing and
CO(2) operations).

Our source of volumes depends on successful exploration and development of
additional oil and natural gas reserves by others and other matters beyond our
control.

The oil, natural gas and other products available to us are derived from
reserves produced from existing wells, which reserves naturally decline over
time. In order to offset this natural decline, our energy infrastructure assets
must access additional reserves. Additionally, some of the projects we have
planned or recently completed are dependent on reserves that we expect to be
produced from newly discovered properties that producers are currently
developing.

Finding and developing new reserves is very expensive, requiring large
capital expenditures by producers for exploration and development drilling,
installing production facilities and constructing pipeline extensions to reach
the new wells. Many economic and business factors out of our control can
adversely affect the decision by any producer to explore for and develop new
reserves. These factors include the prevailing market price of the commodity,
the capital budgets of producers, the depletion rate of existing reservoirs, the
success of new wells drilled, environmental concerns, regulatory initiatives,
cost and availability of equipment, capital budget limitations or the lack of
available capital, and other matters beyond our control. Additional reserves, if
discovered, may not be developed in the near future or at all. We cannot assure
you that production will rise to sufficient levels to allow us to maintain or
increase the commodity volumes we are experiencing.

We face intense competition to obtain commodity volumes.

Our competitors -- gatherers, transporters, marketers, brokers and other
aggregators -- include independents and major integrated energy companies, as
well as their marketing affiliates, who vary widely in size, financial resources
and experience. Some of these competitors have capital resources many times
greater than ours and control substantially greater supplies of crude oil.

Even if reserves exist in the areas accessed by our facilities and are
ultimately produced, we may not be chosen by the producers to gather, transport,
store or otherwise handle any of these reserves. We compete with others for any
such volumes on the basis of many factors, including:

[ ] geographic proximity to the production;

[ ] costs of connection;

[ ] available capacity;

[ ] rates; and

[ ] access to markets.

Additionally, third-party shippers do not have long-term contractual
commitments to ship crude oil on our pipelines. A decision by a shipper to
substantially reduce or cease to ship volumes of crude oil on our pipelines
could cause a significant decline in our revenues. In Mississippi, we are
dependent on interconnections with other pipelines to provide shippers with a
market for their crude oil, and in Texas, we are dependent on interconnections
with other pipelines to provide shippers with transportation to our pipeline.
Any reduction of throughput available to our shippers on these interconnecting
pipelines as a result of testing, pipeline repair, reduced operating pressures
or other causes could result in reduced throughput on our pipelines that would
adversely affect our cash flows and results of operations.

Fluctuations in demand for crude oil, such as those caused by refinery
downtime or shutdowns, can negatively affect our operating results. Reduced
demand in areas we service with our pipelines can result in less demand for our
transportation services. In addition, certain of our field and pipeline
operating costs and expenses are fixed and do not vary with the volumes we
gather and transport. These costs and expenses may not decrease ratably or at
all should we experience a reduction in our volumes gathered by truck or
transmitted by our pipelines. As a result, we may experience declines in our
margin and profitability if our volumes decrease.

FLUCTUATIONS IN COMMODITY PRICES COULD ADVERSELY AFFECT OUR BUSINESS.

Oil, natural gas, other petroleum product and CO(2) prices are volatile and
could have an adverse effect on a portion of our profits and cash flow. Our
operations are affected by price reductions. Price reductions can materially
reduce the level of exploration, production and development operations, as well
as pipeline and marketing volumes.

Prices for commodities can fluctuate in response to changes in supply,
market uncertainty and a variety of additional factors that are beyond our
control.

OUR OPERATIONS ARE DEPENDENT UPON DEMAND FOR CRUDE OIL BY REFINERS IN THE
MIDWEST AND ON THE GULF COAST.

Any decrease in this demand for crude oil by the refineries or connecting
carriers to which we deliver could adversely affect our business. Those
refineries' need for crude oil also is dependent on the competition from other
refineries, the impact of future economic conditions, fuel conservation
measures, alternative fuel requirements, government regulation or technological
advances in fuel economy and energy generation devices, all of which could
reduce demand for our services.

WE ARE EXPOSED TO THE CREDIT RISK OF OUR CUSTOMERS IN THE ORDINARY COURSE OF
OUR CRUDE OIL GATHERING AND MARKETING ACTIVITIES.

When we market crude oil, we must determine the amount, if any, of the line
of credit we will extend to any given customer. Since typical sales transactions
can involve tens of thousands of barrels of crude oil, the risk of nonpayment
and nonperformance by customers is an important consideration in our business.
In those cases where we provide division order services for crude oil purchased
at the wellhead, we may be responsible for distribution of proceeds to all
parties. In other cases, we pay all of or a portion of the production proceeds
to an operator who distributes these proceeds to the various interest owners.
These arrangements expose us to operator credit risk. As a result, we must
determine that operators have sufficient financial resources to make such
payments and distributions and to indemnify and defend us in case of a protest,
action or complaint. Even if our credit review and analysis mechanisms work
properly, there can be no assurance that we will not experience losses in
dealings with other parties.

OUR OPERATIONS ARE SUBJECT TO FEDERAL AND STATE ENVIRONMENTAL AND SAFETY
REGULATIONS AND LAWS RELATED TO ENVIRONMENTAL PROTECTION AND OPERATIONAL
SAFETY.

Our gathering and pipeline operations are subject to the risk of incurring
substantial environmental and safety related costs and liabilities. These costs
and liabilities could rise under increasingly strict environmental and safety
laws, including regulations and enforcement policies, or claims for damages to
property or persons resulting from our operations. If we are unable to recover
such resulting costs through increased rates or insurance reimbursements, our
cash flows and distributions to our unitholders could be materially affected.

The transportation and storage of crude oil involves a risk that crude oil
and related hydrocarbons may be suddenly or gradually released into the
environment, which may result in substantial expenditures for a response action,
significant government penalties, liability to government agencies for natural
resources damages, liability to private parties for personal injury or property
damages, and significant business interruption.

OUR CO(2) OPERATIONS PRIMARILY RELATE TO OUR VOLUMETRIC PRODUCTION PAYMENT,
WHICH IS A FINITE RESOURCE PROJECTED TO TERMINATE AROUND 2015.

The cash flow from our CO(2) operations primarily relates to our volumetric
production payment, which is projected to terminate around 2015. Unless we are
able to obtain a replacement supply of CO(2) and enter into sales arrangements
that generate substantially similar economics, our cash flow could decline
significantly around 2015.

OUR CO(2) OPERATIONS ARE EXPOSED TO RISKS RELATED TO DENBURY RESOURCES'
OPERATION OF THEIR CO(2) FIELDS, EQUIPMENT AND PIPELINE.

Because Denbury Resources produces the CO(2) and transports the CO(2) to
our customers, any major failure of its operations could have an impact on our
ability to meet our obligations to our CO(2) customers. We have no other supply
of CO(2) or method to transport it to our customers.

The CO(2) supplied by Denbury Resources to us for our sale to our customers
could fail to meet the quality standards in the contracts due to impurities or
water vapor content. If the CO(2) were below specifications, we could be
contractually obligated to provide compensation to our customers for the costs
incurred in raising the CO(2) quality to serviceable levels required by our
contracts.

FLUCTUATIONS IN DEMAND FOR CO(2) BY OUR INDUSTRIAL CUSTOMERS COULD MATERIALLY
IMPACT OUR PROFITABILITY.

Our customers are not obligated to purchase volumes in excess of specified
minimum amounts in our contracts. As a result, fluctuations in our customers'
demand due to market forces or operational problems could result in a reduction
in our revenues from our sales of CO(2).

OUR WHOLESALE CO(2) INDUSTRIAL OPERATIONS ARE DEPENDENT ON THREE CUSTOMERS.

If one or more of those customers experience financial difficulties such
that they fail to purchase their required minimum take-or-pay volumes, our cash
flows could be adversely affected. We believe these three customers are credit
worthy, but we cannot assure you that an unanticipated deterioration in their
ability to meet their obligations to us might not occur.

WE MAY NOT BE ABLE TO FULLY EXECUTE OUR GROWTH STRATEGY IF WE ENCOUNTER TIGHT
CAPITAL MARKETS OR INCREASED COMPETITION FOR QUALIFIED ASSETS.

Our strategy contemplates substantial growth through the development and
acquisition of a wide range of midstream and other energy infrastructure assets
while maintaining a strong balance sheet. This strategy includes constructing
and acquiring additional assets and businesses to enhance our ability to compete
effectively, diversify our asset portfolio and, thereby, provide more stable
cash flow. We regularly consider and enter into discussions regarding, and are
currently contemplating, additional potential joint ventures, stand-alone
projects and other transactions that we believe will present opportunities to
realize synergies, expand our role in the energy infrastructure business, and
increase our market position and, ultimately, increase distributions to
unitholders.

We will need new capital to finance the future development and acquisition
of assets and businesses. Limitations on our access to capital will impair our
ability to execute this strategy. Expensive capital will limit our ability to
develop or acquire accretive assets. Although we intend to continue to expand
our business, this strategy may require substantial capital, and we may not be
able to raise the necessary funds on satisfactory terms, if at all.

In addition, we are experiencing increased competition for the assets we
purchase or contemplate purchasing. Increased competition for a limited pool of
assets could result in our not being the successful bidder more often or our
acquiring assets at a higher relative price than that which we have paid
historically. Either occurrence would limit our ability to fully execute our
growth strategy. Our ability to execute our growth strategy may impact the
market price of our securities.

OUR GROWTH STRATEGY MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS IF WE DO
NOT SUCCESSFULLY INTEGRATE THE BUSINESSES THAT WE ACQUIRE OR IF WE
SUBSTANTIALLY INCREASE OUR INDEBTEDNESS AND CONTINGENT LIABILITIES TO MAKE
ACQUISITIONS.

We may be unable to integrate successfully businesses we acquire. We may
incur substantial expenses, delays or other problems in connection with our
growth strategy that could negatively impact our results of operations.
Moreover, acquisitions and business expansions involve numerous risks,
including:

[ ] difficulties in the assimilation of the operations, technologies,
services and products of the acquired companies or business segments;

[ ] inefficiencies and complexities that can arise because of
unfamiliarity with new assets and the businesses associated with them,
including unfamiliarity with their markets; and

[ ] diversion of the attention of management and other personnel from
day-to-day business to the development or acquisition of new
businesses and other business opportunities.

If consummated, any acquisition or investment also likely would result in
the incurrence of indebtedness and contingent liabilities and an increase in
interest expense and depreciation, depletion and amortization expenses. A
substantial increase in our indebtedness and contingent liabilities could have a
material adverse effect on our business, as discussed above.

OUR ACTUAL CONSTRUCTION, DEVELOPMENT AND ACQUISITION COSTS COULD EXCEED OUR
FORECAST, AND OUR CASH FLOW FROM CONSTRUCTION AND DEVELOPMENT PROJECTS MAY NOT
BE IMMEDIATE.

Our forecast contemplates significant expenditures for the development,
construction or other acquisition of energy infrastructure assets, including
some construction and development projects with technological challenges. We may
not be able to complete our projects at the costs currently estimated. If we
experience material cost overruns, we will have to finance these overruns using
one or more of the following methods:

[ ] using cash from operations;

[ ] delaying other planned projects;

[ ] incurring additional indebtedness; or

[ ] issuing additional debt or equity.

Any or all of these methods may not be available when needed or may
adversely affect our future results of operations.

FLUCTUATIONS IN INTEREST RATES COULD ADVERSELY AFFECT OUR BUSINESS.

In addition to our exposure to commodity prices, we also have exposure to
movements in interest rates. The interest rates on our indebtedness outstanding
on the date of this prospectus, like our credit facility, are variable. Our
results of operations and our cash flow, as well as our access to future capital
and our ability to fund our growth strategy, could be adversely affected by
significant increases or decreases in interest rates.

OUR USE OF DERIVATIVE FINANCIAL INSTRUMENTS COULD RESULT IN FINANCIAL LOSSES.

We use financial derivative instruments and other hedging mechanisms from
time to time to limit a portion of the adverse effects resulting from changes in
commodity prices, although there are times when we do not have any hedging
mechanisms in place. To the extent we hedge our commodity price exposure, we
forego the benefits we would otherwise experience if commodity prices were to
increase. In addition, we could experience losses resulting from our hedging and
other derivative positions. Such losses could occur under various circumstances,
including if our counterparty does not perform its obligations under the hedge
arrangement, our hedge is imperfect, or our hedging policies and procedures are
not followed.

A NATURAL DISASTER, CATASTROPHE OR OTHER INTERRUPTION EVENT INVOLVING US COULD
RESULT IN SEVERE PERSONAL INJURY, PROPERTY DAMAGE AND ENVIRONMENTAL DAMAGE,
WHICH COULD CURTAIL OUR OPERATIONS AND OTHERWISE ADVERSELY AFFECT OUR ASSETS
AND CASH FLOW.

Some of our operations involve higher risks of severe personal injury,
property damage and environmental damage, any of which could curtail our
operations and otherwise expose us to liability and adversely affect our cash
flow. Virtually all of our operations are exposed to the elements, including
tornadoes, storms, floods and earthquakes.

If one or more facilities that are owned by us or that connect to us is
damaged or otherwise affected by severe weather or any other disaster, accident,
catastrophe or event, our operations could be significantly interrupted. Similar
interruptions could result from damage to production or other facilities that
supply our facilities or other stoppages arising from factors beyond our
control. These interruptions might involve significant damage to people,
property or the environment, and repairs might take from a week or less for a
minor incident to six months or more for a major interruption. Any event that
interrupts the fees generated by our energy infrastructure assets, or which
causes us to make significant expenditures not covered by insurance, could
reduce our cash available for paying our interest obligations as well as
unitholder distributions and, accordingly, adversely impact the market price of
our securities. Additionally, the proceeds of any property insurance maintained
by us may not be paid in a timely manner or be in an amount sufficient to meet
our needs if such an event were to occur, and we may not be able to renew it or
obtain other desirable insurance on commercially reasonable terms, if at all.

FERC REGULATION AND A CHANGING REGULATORY ENVIRONMENT COULD AFFECT OUR CASH
FLOW.

The FERC extensively regulates certain of our energy infrastructure assets.
This regulation extends to such matters as:

[ ] rate structures;

[ ] rates of return on equity;

[ ] recovery of costs;

[ ] the services that our regulated assets are permitted to perform;

[ ] the acquisition, construction and disposition of assets; and

[ ] to an extent, the level of competition in that regulated industry.

Given the extent of this regulation, the extensive changes in FERC policy
over the last several years, the evolving nature of regulation and the
possibility for additional changes, the current regulatory regime may change and
affect our financial position, results of operations or cash flows.

TERRORIST ATTACKS AIMED AT THE PARTNERSHIP'S FACILITIES COULD ADVERSELY AFFECT
THE BUSINESS.

On September 11, 2001, the United States was the target of terrorist
attacks of unprecedented scale. Since the September 11 attacks, the U.S.
government has issued warnings that energy assets, specifically the nation's
pipeline infrastructure, may be the future targets of terrorist organizations.
These developments have subjected our operations to increased risks. Any future
terrorist attack at our facilities, those of our customers and, in some cases,
those of other pipelines, could have a material adverse effect on our business.

RISKS RELATED TO OUR PARTNERSHIP STRUCTURE

DENBURY RESOURCES AND ITS AFFILIATES HAVE CONFLICTS OF INTEREST WITH US AND
LIMITED FIDUCIARY RESPONSIBILITIES, WHICH MAY PERMIT THEM TO FAVOR THEIR OWN
INTERESTS TO YOUR DETRIMENT.

Denbury Resources indirectly owns and controls our general partner.
Conflicts of interest may arise between Denbury Resources and its affiliates,
including our general partner, on the one hand, and us and our unitholders, on
the other hand. As a result of these conflicts, our general partner may favor
its own interest

and the interest of its affiliates or others over the interest of our
unitholders. These conflicts include, among others, the following situations:

[ ] neither our partnership agreement nor any other agreement requires
Denbury Resources to pursue a business strategy that favors us or
utilizes our assets. Denbury Resources' directors and officers have a
fiduciary duty to make these decisions in the best interest of the
stockholders of Denbury Resources;

[ ] Denbury Resources may compete with us. Denbury Resources owns the
largest reserves of CO(2) used for tertiary oil recovery east of the
Mississippi River and may manage these reserves in a manner that could
adversely affect our CO(2) business;

[ ] our general partner is allowed to take into account the interest of
parties other than us, such as Denbury Resources, in resolving
conflicts of interest;

[ ] our general partner may limit its liability and reduce its fiduciary
duties, while also restricting the remedies available to our
unitholders for actions that, without the limitations, might
constitute breaches of fiduciary duty;

[ ] our general partner determines the amount and timing of asset
purchases and sales, capital expenditures, borrowings, including for
incentive distributions, issuance of additional partnership
securities, reimbursements and enforcement of obligations to the
general partner and its affiliates, retention of counsel, accountants
and service providers, and cash reserves, each of which can also
affect the amount of cash that is distributed to our unitholders;

[ ] our general partner determines which costs incurred by it and its
affiliates are reimbursable by us and the reimbursement of these costs
and of any services provided by our general partner could adversely
affect our ability to pay cash distributions to our unitholders;

[ ] our general partner controls the enforcement of obligations owed to us
by our general partner and its affiliates;

[ ] our general partner decides whether to retain separate counsel,
accountants or others to perform services for us; and

[ ] in some instances, our general partner may cause us to borrow funds in
order to permit the payment of distributions even if the purpose or
effect of the borrowing is to make incentive distributions.

We expect to continue to enter into substantial transactions and other
activities with Denbury Resources and its subsidiaries because of the businesses
and areas in which we and Denbury Resources currently operate, as well as those
in which we plan to operate in the future. Some more recent transactions in
which we, on the one hand, and Denbury Resources and its subsidiaries, on the
other hand, had a conflict of interest include:

[ ] transportation services;

[ ] pipeline monitoring services; and

[ ] CO(2) volumetric production payment.

In addition, Denbury Resources' beneficial ownership interest in our
outstanding partnership interests could have a substantial effect on the outcome
of some actions requiring partner approval. Accordingly, subject to legal
requirements, Denbury Resources makes the final determination regarding how any
particular conflict of interest is resolved.

EVEN IF UNITHOLDERS ARE DISSATISFIED, THEY CANNOT EASILY REMOVE OUR GENERAL
PARTNER.

Unlike the holders of common stock in a corporation, unitholders have only
limited voting rights on matters affecting our business and, therefore, limited
ability to influence management's decisions regarding our business.

Unitholders did not elect our general partner or its board of directors and
will have no right to elect our general partner or its board of directors on an
annual or other continuing basis. The board of directors of our general partner
is chosen by the stockholders of our general partner. In addition, if the
unitholders are dissatisfied with the performance of our general partner, they
will have little ability to remove our general partners. As a result of these
limitations, the price at which the common units trade could be diminished
because of the absence or reduction of a takeover premium in the trading price.

The vote of the holders of at least a majority of all outstanding units
(excluding any units held by our general partner and its affiliates) is required
to remove the general partner without cause. For the definition of "cause,"
please see "Description of Our Partnership Agreement" in this prospectus. If our
general partner is removed without cause, (i) Denbury Resources will have the
option to acquire a substantial portion of our Mississippi pipeline system at
110% of its then fair market value, and (ii) our general partner will have the
option to convert its interest in us (other than its common units) into common
units or to require our replacement general partner to purchase such interest
for cash at its then fair market value. In addition, unitholders' voting rights
are further restricted by our partnership agreement provision providing that any
units held by a person that owns 20% or more of any class of units then
outstanding, other than the general partner, its affiliates, their transferees,
and persons who acquired such units with the prior approval of the board of
directors of the general partner, cannot vote on any matter. Our partnership
agreement also contains provisions limiting the ability of unitholders to call
meetings or to acquire information about our operations, as well as other
provisions limiting the unitholders' ability to influence the manner of
direction of management.

As a result of these provisions, the price at which our common units trade
may be lower because of the absence or reduction of a takeover premium.

THE CONTROL OF OUR GENERAL PARTNER MAY BE TRANSFERRED TO A THIRD PARTY WITHOUT
UNITHOLDER CONSENT, WHICH COULD EFFECT OUR STRATEGIC DIRECTION AND LIQUIDITY.

Our general partner may transfer its general partner interest to a third
party in a merger or in a sale of all or substantially all of its assets without
the consent of the unitholders. Furthermore, there is no restriction in our
partnership agreement on the ability of the owner of our general partner from
transferring its ownership interest in the general partner to a third party. The
new owner of the general partner would then be in a position to replace the
board of directors and officers of the general partner with its own choices and
to control the decisions taken by the board of directors and officers.

In addition, unless our creditors agreed otherwise, we would be required to
repay the amounts outstanding under our credit facilities upon the occurrence of
any change of control described therein. We may not have sufficient funds
available or be permitted by our other debt instruments to fulfill these
obligations upon such occurrence. A change of control could have other
consequences to us depending on the agreements and other arrangements we have in
place from time to time, including employment compensation arrangements.

OUR GENERAL PARTNER AND ITS AFFILIATES MAY SELL UNITS OR OTHER LIMITED PARTNER
INTERESTS IN THE TRADING MARKET, WHICH COULD REDUCE THE MARKET PRICE OF COMMON
UNITS.

As of December 31, 2004, our general partner and its affiliates own 688,811
(approximately 7%) of our common units. In the future, they may acquire
additional interest or dispose of some or all of their interest. If they dispose
of a substantial portion of their interest in the trading markets, the sale
could reduce the market price of common units. Our partnership agreement, and
other agreements to which we are party, allow our general partner and certain of
its subsidiaries to cause us to register for sale the partnership interests held
by such persons, including common units. These registration rights allow our
general partner and its subsidiaries to request registration of those
partnership interests and to include any of those securities in a registration
of other capital securities by us.

OUR GENERAL PARTNER HAS ANTI-DILUTION RIGHTS.

Whenever we issue equity securities to any person other than our general
partner and its affiliates, our general partner and its affiliates have the
right to purchase an additional amount of those equity securities on

the same terms as they are issued to the other purchasers. This allows our
general partner and its affiliates to maintain their percentage partnership
interest in us. No other unitholder has a similar right. Therefore, only our
general partner may protect itself against dilution caused by the issuance of
additional equity securities.

DUE TO OUR SIGNIFICANT RELATIONSHIPS WITH DENBURY RESOURCES, ADVERSE
DEVELOPMENTS CONCERNING DENBURY RESOURCES COULD ADVERSELY AFFECT US, EVEN IF
WE HAVE NOT SUFFERED ANY SIMILAR DEVELOPMENTS.

Through its subsidiaries, Denbury Resources owns 100 percent of our general
partner and has historically, with its affiliates, employed the personnel who
operate our businesses. Denbury Resources is a significant stakeholder in our
limited partner interests, and as with many other energy companies, is a
significant customer of ours.

WE MAY ISSUE ADDITIONAL COMMON UNITS WITHOUT YOUR APPROVAL, WHICH WOULD DILUTE
YOUR OWNERSHIP INTERESTS.

We may issue an unlimited number of limited partners interests of any type
without the approval of our unitholders.

The issuance of additional common units or other equity securities of equal
or senior rank will have the following effects:

[ ] our unitholders' proportionate ownership interest in us will decrease;

[ ] the amount of cash available for distribution on each unit may
decrease;

[ ] the relative voting strength of each previously outstanding unit may
be diminished; and

[ ] the market price of our common units may decline.

OUR GENERAL PARTNER HAS A LIMITED CALL RIGHT THAT MAY REQUIRE YOU TO SELL YOUR
COMMON UNITS AT AN UNDESIRABLE TIME OR PRICE.

If at any time our general partner and its affiliates own more than 80% of
the common units, our general partner will have the right, but not the
obligation, which it may assign to any of its affiliates or to us, to acquire
all, but not less than all, of the common units held by unaffiliated persons at
a price not less than their then-current market price. As a result, you may be
required to sell your common units at an undesirable time or price and may not
receive any return on your investment. You may also incur a tax liability upon a
sale of your units.

THE INTERRUPTION OF DISTRIBUTIONS TO US FROM OUR SUBSIDIARIES AND JOINT
VENTURES MAY AFFECT OUR ABILITY TO MAKE PAYMENTS ON INDEBTEDNESS OR CASH
DISTRIBUTIONS TO OUR UNITHOLDERS.

We are a holding company. As such, our primary assets are the equity
interests in our subsidiaries and joint ventures. Consequently, our ability to
fund our commitments (including payments on our indebtedness) and to make cash
distributions depends upon the earnings and cash flow of our subsidiaries and
joint ventures and the distribution of that cash to us. Distributions from our
joint ventures are subject to the discretion of their respective management
committees. Further, each joint venture's charter documents typically vest in
its management committee sole discretion regarding distributions. Accordingly,
our joint ventures may not continue to make distributions to us at current
levels or at all.

WE CANNOT CAUSE OUR JOINT VENTURES TO TAKE OR NOT TO TAKE CERTAIN ACTIONS
UNLESS SOME OR ALL OF THE JOINT VENTURE PARTICIPANTS AGREE.

Due to the nature of joint ventures, each participant (including us) in our
joint venture, T & P Syngas Supply Company, has made substantial investments
(including contributions and other commitments) in that joint venture and,
accordingly, has required that the relevant charter documents contain certain
features designed to provide each participant with the opportunity to
participate in the management of the joint venture and to protect its investment
in that joint venture, as well as any other assets which may be

substantially dependent on or otherwise affected by the activities of that joint
venture. These participation and protective features include a corporate
governance structure that consists of a management committee composed of four
members, only two of which are appointed by us. In addition, Praxair, the other
50% owner, operates the joint venture facilities. Thus, without the concurrence
of the other joint venture participant, we cannot cause our joint venture to
take or not to take certain actions, even though those actions may be in the
best interest of the joint venture or us. As of April 1, 2005, our aggregate
investment in T & P Syngas Supply Company totaled $13.5 million.

OUR SYNGAS OPERATIONS ARE DEPENDENT ON ONE CUSTOMER.

Our joint venture has dedicated 100% of its syngas processing capacity to
one customer pursuant to a processing contract. The contract term expires in
2016, unless our customer elects to extend the contract for two additional five
year terms. If our customer reduces or discontinues its business with us, or if
we are not able to successfully negotiate a replacement contract with our sole
customer after the expiration of such contract, or if the replacement contract
is on less favorable terms, the effect on us will be adverse. In addition, if
our sole customer for syngas processing were to experience financial
difficulties such that it failed to provide volumes to process, our cash flow
from the syngas joint venture could be adversely affected. We believe this
customer is creditworthy, but we cannot assure you that unanticipated
deterioration of their abilities to meet their obligations to the syngas joint
venture might not occur.

WE DO NOT HAVE THE SAME FLEXIBILITY AS OTHER TYPES OF ORGANIZATIONS TO
ACCUMULATE CASH AND EQUITY TO PROTECT AGAINST ILLIQUIDITY IN THE FUTURE.

Unlike a corporation, our partnership agreement requires us to make
quarterly distributions to our unitholders of all available cash reduced by any
amounts reserved for commitments and contingencies, including capital and
operating costs and debt service requirements. The value of our units and other
limited partner interests will decrease in direct correlation with decreases in
the amount we distribute per unit. Accordingly, if we experience a liquidity
problem in the future, we may not be able to issue more equity to recapitalize.

TAX RISKS TO COMMON UNITHOLDERS

You should read "Material Tax Consequences" for a full discussion of the
expected material federal income tax consequences of owning and disposing of
common units.

THE IRS COULD TREAT US AS A CORPORATION FOR TAX PURPOSES, WHICH WOULD
SUBSTANTIALLY REDUCE THE CASH AVAILABLE FOR DISTRIBUTION TO YOU.

The after-tax economic benefit of an investment in the common units depends
largely on our being treated as a partnership for federal income tax purposes.
We have not requested, and do not plan to request, a ruling from the IRS on this
or any other tax matter affecting us.

If we were treated as a corporation for federal income tax purposes, we
would pay federal income tax on our income at the corporate tax rate, which is
currently a maximum of 35%. Distributions to you may be taxed again as corporate
dividends, and no income, gains, losses or deductions would flow through to you.
Because a tax would be imposed upon us as a corporation, our cash available for
distribution to you would be substantially reduced. If we were treated as a
corporation, there would be a material reduction in the after-tax return to the
unitholders, likely causing a substantial reduction in the value of our common
units.

Current law may change so as to cause us to be treated as a corporation for
federal income tax purposes or otherwise subject us to entity-level taxation. In
addition, because of widespread state budget deficits, several states are
evaluating ways to subject partnerships to entity-level taxation through the
imposition of state income, franchise or other forms of taxation. If any state
were to impose a tax upon us as an entity, the cash available for distribution
to you would be reduced. The partnership agreement provides that if a law is
enacted or existing law is modified or interpreted in a manner that subjects us
to taxation as a corporation or otherwise subjects us to entity-level taxation
for federal, state or local income tax purposes, the minimum

quarterly distribution amount and the target distribution amounts will be
adjusted to reflect the impact of that law on us.

A SUCCESSFUL IRS CONTEST OF THE FEDERAL INCOME TAX POSITIONS WE TAKE MAY
ADVERSELY AFFECT THE MARKET FOR OUR COMMON UNITS, AND THE COST OF ANY IRS
CONTEST WILL BE BORNE BY OUR UNITHOLDERS AND OUR GENERAL PARTNER.

We have not requested a ruling from the IRS with respect to our treatment
as a partnership for federal income tax purposes or any other matter affecting
us. The IRS may adopt positions that differ from the conclusions of our counsel
expressed in this prospectus or from the positions we take. It may be necessary
to resort to administrative or court proceedings to sustain some or all of our
counsel's conclusions or the positions we take. A court may not agree with some
or all of our counsel's conclusions or positions we take. Any contest with the
IRS may materially and adversely impact the market for our common units and the
price at which they trade. In addition, our costs of any contest with the IRS
will be borne indirectly by our unitholders and our general partner, and these
costs will reduce our cash available for distribution.

YOU MAY BE REQUIRED TO PAY TAXES ON INCOME FROM US EVEN IF YOU DO NOT RECEIVE
ANY CASH DISTRIBUTIONS FROM US.

You will be required to pay any federal income taxes and, in some cases,
state and local income taxes on your share of our taxable income even if you
receive no cash distributions from us. You may not receive cash distributions
from us equal to your share of our taxable income or even the tax liability that
results from that income.

TAX GAIN OR LOSS ON DISPOSITION OF COMMON UNITS COULD BE DIFFERENT THAN
EXPECTED.

If you sell your common units, you will recognize a gain or loss equal to
the difference between the amount realized and your tax basis in those common
units. Prior distributions to you in excess of the total net taxable income you
were allocated for a common unit, which decreased your tax basis in that common
unit, will, in effect, become taxable income to you if the common unit is sold
at a price greater than your tax basis in that common unit, even if the price is
less than your original cost. A substantial portion of the amount realized,
whether or not representing gain, may be ordinary income. In addition, if you
sell your units, you may incur a tax liability in excess of the amount of cash
you receive from the sale.

TAX-EXEMPT ENTITIES, REGULATED INVESTMENT COMPANIES AND FOREIGN PERSONS FACE
UNIQUE TAX ISSUES FROM OWNING COMMON UNITS THAT MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO THEM.

Investment in common units by tax-exempt entities, such as individual
retirement accounts (known as IRAs), regulated investment companies (known as
mutual funds) and non U.S. persons raises issues unique to them. For example, a
significant amount of our income allocated to organizations exempt from federal
income tax, including individual retirement accounts and other retirement plans,
may be unrelated business taxable income and will be taxable to such a
unitholder. Recent legislation treats net income derived from the ownership of
certain publicly traded partnerships (including us) as qualifying income to a
regulated investment company. However, this legislation is only effective for
taxable years beginning after October 22, 2004, the date of enactment. For
taxable years beginning prior to the date of enactment, very little of our
income will be qualifying income to a regulated investment company.
Distributions to non-U.S. persons will be reduced by withholding tax at the
highest effective tax rate applicable to individuals, and non U.S. unitholders
will be required to file federal income tax returns and pay tax on their share
of our taxable income.

WE ARE REGISTERED AS A TAX SHELTER. THIS MAY INCREASE THE RISK OF AN IRS AUDIT
OF US OR YOU.

We are registered with the IRS as a "tax shelter." Our tax shelter
registration number is 97043000153. The federal income tax laws require that
some types of entities, including some partnerships, register as tax shelters in
response to the perception that they claim tax benefits that may be unwarranted.
As a result, we

may be audited by the IRS and tax adjustments may be made. Any unitholder owning
less than a 1% profit interest in us has very limited rights to participate in
the income tax audit process. Further, any adjustments in our tax returns will
lead to adjustments in your tax returns and may lead to audits of your tax
returns and adjustments of items unrelated to us. You would bear the cost of any
expense incurred in connection with an examination of your tax return.

WE WILL TREAT EACH PURCHASER OF COMMON UNITS AS HAVING THE SAME TAX BENEFITS
WITHOUT REGARD TO THE UNITS PURCHASED. THE IRS MAY CHALLENGE THIS TREATMENT,
WHICH COULD ADVERSELY AFFECT THE VALUE OF OUR COMMON UNITS.

Because we cannot match transferors and transferees of common units, we
adopt depreciation and amortization positions that may not conform with all
aspects of applicable Treasury regulations. A successful IRS challenge to those
positions could adversely affect the amount of tax benefits available to a
common unitholder. It also could affect the timing of these tax benefits or the
amount of gain from a sale of common units and could have a negative impact on
the value of the common units or result in audit adjustments to the common
unitholder's tax returns.

YOU WILL LIKELY BE SUBJECT TO STATE AND LOCAL TAXES IN STATES WHERE YOU DO NOT
LIVE AS A RESULT OF AN INVESTMENT IN UNITS.

In addition to federal income taxes, you will likely be subject to other
taxes, including foreign, state and local taxes, unincorporated business taxes
and estate inheritance or intangible taxes that are imposed by the various
jurisdictions in which we do business or own property, even if you do not live
in any of those jurisdictions. You will likely be required to file foreign,
state and local income tax returns and pay state and local income taxes in some
or all of these jurisdictions. Further, you may be subject to penalties for
failure to comply with those requirements. We own assets and do business in
Texas, Louisiana, Mississippi, Alabama, Florida, and Oklahoma. Louisiana,
Mississippi, Alabama, Florida, and Oklahoma currently impose a personal income
tax. It is your responsibility to file all United States federal, foreign, state
and local tax returns. Our counsel has not rendered an opinion on the state or
local tax consequences of an investment in the common units.

USE OF PROCEEDS

Unless otherwise specified in an accompanying prospectus supplement, we
will use the net proceeds we receive from the sale of the equity securities
described in this prospectus for general partnership purposes, which may
include, among other things, repayment of indebtedness, the acquisition of
businesses and other capital expenditures, payment of distributions and
additions to working capital. The exact amounts to be used and when the net
proceeds will be applied will depend on a number of factors, including our
funding requirements and the availability of alternative funding sources.

DESCRIPTION OF OUR EQUITY SECURITIES

GENERAL

As of the date of this prospectus, we have outstanding only common units.
In the future we may issue additional common units and one or more series or
classes of other equity securities, including, without limitation, subordinated
securities, preference securities, senior securities, deferred participation
securities or warrant securities, in one or more series or classes. Those equity
securities may have rights to distributions and allocations junior, equal or
superior to our common units. Our general partner can determine the voting
powers, designations, preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions of any series or
class and the number constituting any series or class of equity securities.

OUR COMMON UNITS

Our common units represent limited partner interests in Genesis Energy,
L.P. that entitle the holders to participate in our cash distributions and to
exercise the rights or privileges available to limited partners under our
partnership agreement. For a description of the relative rights and preferences
of holders of common units and our general partner in and to partnership
distributions, see "Cash Distribution Policy" in this prospectus.

Our outstanding common units are listed on the American Stock Exchange
under the symbol "GEL."

The transfer agent and registrar for our common units is American Stock
Transfer & Trust Company.

Status as Limited Partner or Assignee. Except as described under
"-- Limited Liability," the common units will be fully paid, and the unitholders
will not be required to make additional capital contributions to us.

Transfer of Common Units. Each purchaser of common units offered by this
prospectus must execute a transfer application. By executing and delivering a
transfer application, the purchaser of common units:

[ ] becomes the record holder of the common units and is an assignee
until admitted into our partnership as a substituted limited
partner;

[ ] automatically requests admission as a substituted limited partner
in our partnership;

[ ] agrees to be bound by the terms and conditions of, and executes,
our partnership agreement;

[ ] represents that he has the capacity, power and authority to enter
into the partnership agreement;

[ ] grants powers of attorney to officers of the general partner and
any liquidator of our partnership as specified in the partnership
agreement; and

[ ] makes the consents and waivers contained in the partnership
agreement.

An assignee will become a substituted limited partner of our partnership
for the transferred common units upon the consent of our general partner and the
recording of the name of the assignee on our books and records. The general
partner may withhold its consent in its sole discretion.

Transfer applications may be completed, executed and delivered by a
purchaser's broker, agent or nominee. We are entitled to treat the nominee
holder of a common unit as the absolute owner. In that case, the beneficial
holders' rights are limited solely to those that it has against the nominee
holder as a result of any agreement between the beneficial owner and the nominee
holder.

Common units are securities and are transferable according to the laws
governing transfer of securities. In addition to other rights acquired, the
purchaser has the right to request admission as a substituted limited

partner in our partnership for the purchased common units. A purchaser of common
units who does not execute and deliver a transfer application obtains only:

[ ] the right to assign the common unit to a purchaser or transferee;
and

[ ] the right to transfer the right to seek admission as a substituted
limited partner in our partnership for the purchased common units.

Thus, a purchaser of common units who does not execute and deliver a
transfer application:

[ ] will not receive cash distributions or federal income tax
allocations, unless the common units are held in a nominee or
"street name" account and the nominee or broker has executed and
delivered a transfer application; and

[ ] may not receive some federal income tax information or reports
furnished to record holders of common units.

Until a common unit has been transferred on our books, we and the transfer
agent, notwithstanding any notice to the contrary, may treat the record holder
of the unit as the absolute owner for all purposes, except as otherwise required
by law or stock exchange regulations.

Limited Liability. Assuming that a limited partner does not participate in
the control of our business within the meaning of the Delaware Revised Uniform
Limited Partnership Act (the "Delaware Act") and that he otherwise acts in
conformity with the provisions of our partnership agreement, his liability under
the Delaware Act will be limited, subject to possible exceptions, to the amount
of capital he is obligated to contribute to us for his common units plus his
share of any undistributed profits and assets. If it were determined, however,
that the right or exercise of the right by the limited partners as a group:

[ ] to remove or replace the general partner;

[ ] to approve some amendments to our partnership agreement; or

[ ] to take other action under our partnership agreement

constituted "participation in the control" of our business for the purposes of
the Delaware Act, then the limited partners could be held personally liable for
our obligations under Delaware law, to the same extent as the general partner.
This liability would extend to persons who transact business with us and who
reasonably believe that the limited partner is a general partner. Neither our
partnership agreement nor the Delaware Act specifically provides for legal
recourse against our general partner if a limited partner were to lose limited
liability through any fault of the general partner. While this does not mean
that a limited partner could not seek legal recourse, we have found no precedent
for this type of a claim in Delaware case law.

Under the Delaware Act, a limited partnership may not make a distribution
to a partner if after the distribution all liabilities of the limited
partnership, other than liabilities to partners on account of their partnership
interests and liabilities for which the recourse of creditors is limited to
specific property of our partnership, exceed the fair value of the assets of the
limited partnership. For the purpose of determining the fair value of the assets
of a limited partnership, the Delaware Act provides that the fair value of
property subject to liability for which recourse of creditors is limited shall
be included in the assets of the limited partnership only to the extent that the
fair value of that property exceeds the nonrecourse liability. The Delaware Act
provides that a limited partner who receives a distribution and knew at the time
of the distribution that the distribution was in violation of the Delaware Act
shall be liable to the limited partnership for the amount of the distribution
for three years. Under the Delaware Act, an assignee who becomes a substituted
limited partner of a limited partnership is liable for the obligations of his
assignor to make contributions to our partnership, except the assignee is not
obligated for liabilities unknown to him at the time he became a limited partner
and which could not be ascertained from our partnership agreement.

Meetings; Voting. Except as described below regarding a person or group
owning 20% or more of any class of units then outstanding, unitholders or
assignees who are record holders of units on the record date will be entitled to
notice of, and to vote at, meetings of our limited partners and to act upon
matters for which

approvals may be solicited. Common units that are owned by an assignee who is a
record holder, but who has not yet been admitted as a limited partner, will be
voted by our general partner at the written direction of the record holder.
Absent direction of this kind, the common units will not be voted, except that,
in the case of common units held by our general partner on behalf of non-citizen
assignees, our general partner will distribute the votes on those common units
in the same ratios as the votes of limited partners on other units are cast.

Our general partner does not anticipate that any meeting of unitholders
will be called in the foreseeable future. Any action that is required or
permitted to be taken by the unitholders may be taken either at a meeting of the
unitholders or without a meeting if consents in writing describing the action so
taken are signed by holders of the number of units as would be necessary to
authorize or take that action at a meeting. Meetings of the unitholders may be
called by our general partner or by unitholders owning at least 20% of the
outstanding units of the class for which a meeting is proposed. Unitholders may
vote either in person or by proxy at meetings. The holders of a majority of the
outstanding units of the class or classes for which a meeting has been called
represented in person or by proxy shall constitute a quorum unless any action by
the unitholders requires approval by holders of a greater percentage of the
units, in which case the quorum shall be the greater percentage.

Each record holder of a unit has a vote according to his percentage
interest in our partnership, although additional limited partner interests
having special voting rights could be issued. However, if at any time any person
or group, other than our general partner and its affiliates, or a direct or
subsequently approved transferee of our general partner or its affiliates or a
person or group who acquires the units with the prior approval of the board of
directors, acquires, in the aggregate, beneficial ownership of 20% or more of
any class of units then outstanding, the person or group will lose voting rights
on all of its units and the units may not be voted on any matter and will not be
considered to be outstanding when sending notices of a meeting of unitholders,
calculating required votes, determining the presence of a quorum or for other
similar purposes. Common units held in nominee or street name account will be
voted by the broker or other nominee in accordance with the instruction of the
beneficial owner unless the arrangement between the beneficial owner and his
nominee provides otherwise.

Any notice, demand, request, report or proxy material required or permitted
to be given or made to record holders of common units under our partnership
agreement will be delivered to the record holder by us or by the transfer agent.

Books and Reports. Our general partner is required to keep appropriate
books of our business at our principal office. The books will be maintained for
both tax and financial reporting purposes on an accrual basis. For tax and
fiscal reporting purposes, our fiscal year is the calendar year.

We will furnish or make available to record holders of common units, within
120 days after the close of each fiscal year, an annual report containing
audited financial statements and a report on those financial statements by our
independent public accountants. Except for our fourth quarter, we will also
furnish or make available unaudited financial information within 90 days after
the close of each quarter.

We will furnish each record holder of a unit with information reasonably
required for tax reporting purposes within 90 days after the close of each
calendar year. This information is expected to be furnished in summary form so
that some complex calculations normally required of partners can be avoided. Our
ability to furnish this summary information to unitholders will depend on the
cooperation of unitholders in supplying us with specific information. Every
unitholder will receive information to assist him in determining his federal and
state tax liability and filing his federal and state income tax returns,
regardless of whether he supplies us with information.

Our partnership agreement provides that a limited partner can, for a
purpose reasonably related to his interest as a limited partner, upon reasonable
demand and at his own expense, have furnished to him:

[ ] a current list of the name and last known address of each partner;

[ ] a copy of our tax returns;

[ ] information as to the amount of cash, and a description and
statement of the agreed value of any other property or services,
contributed or to be contributed by each partner and the date on
which each became a partner;

[ ] copies of our partnership agreement, the certificate of limited
partnership of the partnership, related amendments and powers of
attorney under which they have been executed;

[ ] information regarding the status of our business and financial
condition; and

[ ] any other information regarding our affairs as is just and
reasonable.

Our general partner may, and intends to, keep confidential from the limited
partners trade secrets or other information the disclosure of which our general
partner believes in good faith is not in our best interests or which we are
required by law or by agreements with third parties to keep confidential.

Summary of Partnership Agreement. For a summary of the important
provisions of our partnership agreement, many of which apply to holders of
common units, see "Description of Our Partnership Agreement" in this prospectus.

OUR EQUITY SECURITIES OTHER THAN COMMON UNITS

Except as set forth below, our partnership agreement authorizes us to issue
an unlimited number of additional equity securities for the consideration and
with the rights, preferences and privileges established by our general partner
in its sole discretion without the approval of any of our limited partners. In
accordance with Delaware Law and the provisions of that partnership agreement,
we may also issue additional equity securities that, in the sole discretion of
our general partner, have special voting rights to which our common units are
not entitled. Accordingly, in the future, we may issue one or more series or
classes of equity securities other than common units, including, without
limitation, subordinated securities, preference securities, senior securities,
deferred participation securities or warrant securities.

Should we offer equity securities other than common units under this
prospectus, a prospectus supplement relating to the particular equity securities
offered will include the specific terms of those equity securities, including
the following:

[ ] the designation, stated value, liquidation preference and number of
the equity securities offered;

[ ] the initial public offering price at which those particular equity
securities will be issued;

[ ] the conversion or exchange provisions of those particular equity
securities;

[ ] any redemption or sinking fund provisions of those particular
equity securities;

[ ] the distribution rights of those particular equity securities, if
any;

[ ] a discussion of material federal income tax considerations, if any,
regarding those particular equity securities; and

[ ] any additional rights, preferences, privileges, limitations and
restrictions of those particular equity securities.

CASH DISTRIBUTION POLICY

DISTRIBUTIONS OF AVAILABLE CASH

General. Within approximately 45 days after the end of each quarter,
Genesis Energy, L.P. will distribute all available cash to unitholders of record
on the applicable record date. However, there is no guarantee that we will pay a
distribution on the common units in any quarter, and we will be prohibited from
making any distributions to unitholders if it would cause an event of default,
or if an event of default then exists, under our credit facility.

Definition of Available Cash. Available cash generally means, for each
fiscal quarter, all cash on hand at the end of the quarter:

[ ] less the amount of cash reserves that the general partner determines
in its reasonable discretion is necessary or appropriate to:

[ ] provide for the proper conduct of our business;

[ ] comply with applicable law, any of our debt instruments, or other
agreements; or

[ ] provide funds for distributions to our unitholders and to our general
partner for any one or more of the next four quarters;

[ ] plus all cash on hand on the date of determination of available cash
for the quarter resulting from working capital borrowings. Working
capital borrowings are generally borrowings that are made under our
credit facility and in all cases are used solely for working capital
purposes or to pay distributions to partners.

OPERATING SURPLUS AND CAPITAL SURPLUS

General. All cash distributed to unitholders will be characterized either
as operating surplus or capital surplus. We distribute available cash from
operating surplus differently than available cash from capital surplus.

Maintenance capital expenditures are capital expenditures made to maintain,
over the long term, the operating capacity of our assets as they existed at the
time of the expenditure. Expansion capital expenditures are capital expenditures
made to increase over the long term the operating capacity of our assets as they
existed at the time of the expenditure. The general partner has the discretion
to determine how to allocate a capital expenditure for the acquisition or
expansion of our pipeline systems, storage facilities and related assets between
maintenance capital expenditures and expansion capital expenditures, and its
good faith allocation will be conclusive. Maintenance capital expenditures
reduce operating surplus, from which we pay the minimum quarterly distribution,
but expansion capital expenditures do not.

Definition of Operating Surplus. For any period, operating surplus
generally means:

[ ] our cash balance on the closing date of our initial public offering;
plus

[ ] $20.0 million (as described below); plus

[ ] all of our cash receipts since the closing of our initial public
offering, excluding cash from borrowings that are not working capital
borrowings, sales of equity and debt securities and sales or other
dispositions of assets outside the ordinary course of business; plus

[ ] working capital borrowings made after the end of a quarter but before
the date of determination of operating surplus for that quarter; less

[ ] all of our operating expenses since the closing of our initial public
offering, including the repayment of working capital borrowings and
the payment of capital expenditures, other than:

-- repayments of indebtedness that are required in connection with the
sale or other disposition of assets or that are made in connection
with the refinancing or refunding of indebtedness with the proceeds
from new indebtedness or from the sale of equity securities;

-- expansion capital expenditures;

-- transaction expenses relating to borrowings or refinancings of
indebtedness (other than for working capital purposes), sales of debt
or equity securities or sales or other dispositions of assets other
than in the ordinary course of business; less

[ ] the amount of cash reserves that the general partner deems necessary
or advisable to provide funds for future operating expenditures.

Definition of Capital Surplus. Capital surplus will generally be generated
only by:

[ ] borrowings other than working capital borrowings;

[ ] sales of debt and equity securities; or

[ ] sales or other disposition of assets for cash, other than inventory,
accounts receivable and other current assets sold in the ordinary
course of business or as part of normal retirements or replacements of
assets.

Characterization of Cash Distributions. We will treat all available cash
distributed as coming from operating surplus until the sum of all available cash
distributed since we began operations equals the operating surplus as of the
most recent date of determination of available cash. We will treat any amount
distributed in excess of operating surplus, regardless of its source, as capital
surplus. We do not anticipate that we will make any distributions from capital
surplus. As reflected above, operating surplus includes $20.0 million in
addition to our cash balance on the closing date of our initial public offering,
cash receipts from our operations and cash from working capital borrowings. This
amount does not reflect actual cash on hand at closing that is available for
distribution to our unitholders. Rather, it is a provision that will enable us,
if we choose, to distribute as operating surplus up to $20 million of cash we
receive in the future from non-operating sources, such as assets sales,
issuances of securities and long-term borrowings, which would otherwise be
considered distributions of capital surplus. Any distributions of capital
surplus would trigger certain adjustment provisions in our partnership agreement
as described below. See "-- Distributions From Capital Surplus" and
"-- Adjustment to the Minimum Quarterly Distribution and Target Distribution
Levels."

DISTRIBUTIONS OF AVAILABLE CASH FROM OPERATING SURPLUS

We will make distributions of available cash from operating surplus in the
following manner:

[ ] First, 98% to all unitholders, pro rata, and 2% to the general partner
until we distribute for each outstanding unit an amount equal to the
minimum quarterly distribution for that quarter; and

[ ] Thereafter, in the manner described under "-- Incentive Distribution
Rights" below

INCENTIVE DISTRIBUTION RIGHTS

Incentive distribution rights represent the right to receive an increasing
percentage of quarterly distributions of available cash from operating surplus
after the minimum quarterly distribution and the target distribution levels have
been achieved. Our general partner holds all of the incentive distribution
rights. There are no restrictions on the ability of our general partner to
transfer the incentive distribution rights.

If for any quarter we have distributed available cash from operating
surplus to the common unitholders in an amount equal to the minimum quarterly
distribution, then we will distribute any additional available cash from
operating surplus for that quarter among the unitholders and the general partner
in the following manner:

[ ] First, 98% to all unitholders, pro rata, and 2% to the general
partner, until each unitholder receives a total of $0.25 per unit for
that quarter (the "first target distribution");

[ ] Second, 84.74% to all unitholders, pro rata, 13.26% to the holder of
the incentive distribution rights and 2% to the general partner, until
each unitholder receives a total of $0.28 per unit for that quarter
(the "second target distribution");

[ ] Third, 74.26% to all unitholders, pro rata, 23.74% to the holder of
the incentive distribution rights and 2% to the general partner, until
each unitholder receives a total of $0.33 per unit for that quarter
(the "third target distribution"); and

[ ] Thereafter, 49.02% to all unitholders, pro rata, 48.98% to the holder
of the incentive distribution rights and 2% to the general partner.

PERCENTAGE ALLOCATIONS OF AVAILABLE CASH FROM OPERATING SURPLUS

The following table illustrates the percentage allocations of the
additional available cash from operating surplus between the unitholders and our
general partner up to the various target distribution levels. The amounts set
forth under "Marginal Percentage Interest in Distributions" are the percentage
interests of our general partner and the unitholders in any available cash from
operating surplus we distribute up to and including the corresponding amount in
the column "Total Quarterly Distribution Target Amount," until available cash
from operating surplus we distribute reaches the next target distribution level,
if any. The percentage interests shown for the unitholders and the general
partner for the minimum quarterly distribution are also applicable to quarterly
distribution amounts that are less than the minimum quarterly distribution.

MARGINAL PERCENTAGE
INTEREST IN DISTRIBUTIONS
-------------------------------------
HOLDER OF
TOTAL QUARTERLY INCENTIVE
DISTRIBUTION GENERAL DISTRIBUTION
TARGET AMOUNT UNITHOLDERS PARTNER RIGHTS
----------------------- ------------ ------- ------------

Minimum Quarterly
Distribution.................. up to $0.20 98% 2 % --
First Target Distribution....... above $0.20 up to $0.25 98% 2 % --
Second Target Distribution...... above $0.25 up to $0.28 84.74 % 2 % 13.26 %
Third Target Distribution....... above $0.28 up to $0.33 74.26 % 2 % 23.74 %
Thereafter...................... above $0.33 49.02 % 2 % 48.98 %

DISTRIBUTIONS FROM CAPITAL SURPLUS

We will make distributions of available cash from capital surplus, if any,
in the following manner:

[ ] First, 98% to all unitholders, pro rata, and 2% to the general
partner, until we distribute for each common unit that was issued in
the initial public offering, an amount of available cash from capital
surplus equal to the initial public offering price; and

[ ] Thereafter, we will make all distributions of available cash from
capital surplus as if they were from operating surplus.

Effect of a Distribution from Capital Surplus. The partnership agreement
treats a distribution of capital surplus as the repayment of the initial unit
price from the initial public offering, which is a return of capital. The
initial public offering price less any distributions of capital surplus per unit
is referred to as the unrecovered initial unit price. Each time a distribution
of capital surplus is made, the minimum quarterly distribution and the target
distribution levels will be reduced in the same proportion as the corresponding
reduction in the unrecovered initial unit price. Because distributions of
capital surplus will reduce the minimum quarterly distribution, after any of
these distributions are made, it may be easier for the general partner to
receive incentive distributions.

Once we distribute capital surplus on a unit in an amount equal to the
initial unit price, we will reduce the minimum quarterly distribution and the
target distribution levels to zero and we will make all future distributions
from operating surplus, with 49.02% being paid to the unitholders and 50.98% to
the general partner.

ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET DISTRIBUTION LEVELS

In addition to adjusting the minimum quarterly distribution and target
distribution levels to reflect a distribution of capital surplus, if we combine
our units into fewer units or subdivide our units into a greater number of
units, we will proportionately adjust:

[ ] the minimum quarterly distribution;

[ ] the target distribution levels; and

[ ] the unrecovered initial unit price.

For example, if a two-for-one split of the common units should occur, the
minimum quarterly distribution, the target distribution levels and the
unrecovered initial unit price would each be reduced to 50% of its initial
level. We will not make any adjustment by reason of the issuance of additional
units for cash or property.

In addition, if legislation is enacted or if existing law is modified or
interpreted in a manner that causes us to become taxable as a corporation or
otherwise subject to taxation as an entity for federal, state or local income
tax purposes, we will reduce the minimum quarterly distribution and the target
distribution levels by multiplying the same by one minus the sum of the highest
marginal federal corporate income tax rate that could apply and the effective
overall state and local income tax rates. For example, if we became subject to a
maximum marginal federal, and effective state and local income tax rate of 38%,
then the minimum quarterly distribution and the target distributions levels
would each be reduced to 62% of their previous levels.

DISTRIBUTIONS OF CASH UPON LIQUIDATION

If we dissolve in accordance with our partnership agreement, we will sell
or otherwise dispose of our assets in a process called a liquidation. We will
first apply the proceeds of liquidation to the payment of our creditors. We will
distribute any remaining proceeds to the unitholders and the general partner, in
accordance with their capital account balances, as adjusted to reflect any gain
or loss upon the sale or other disposition of our assets in liquidation.

Manner of Adjustment for Gain. The manner of the adjustment is set forth
in the partnership agreement. Upon liquidation, we will allocate any gain to the
partners in the following manner:

[ ] First, to our general partner and the holders of units who have
negative balances in their capital accounts to the extent of and in
proportion to those negative balances;

[ ] Second, 98% to the common unitholders, pro rata, and 2% to the general
partner, until the capital account for each common unit is equal to
the sum of:

(1) the unrecovered initial unit price; plus

(2) the amount of the minimum quarterly distribution for the quarter
during which our liquidation occurs;

[ ] Third, 98% to all unitholders, pro rata, and 2% to the general
partner, pro rata, until we allocate under this paragraph an amount
per unit equal to:

(1) the sum of the excess of the first target distribution per unit over
the minimum quarterly distribution per unit for each quarter of our
existence; less

(2) the cumulative amount per unit of any distributions of available
cash from operating surplus in excess of the minimum quarterly distribution
per unit that was distributed 98% to the units, pro rata, and 2% to the
general partner, pro rata, for each quarter of our existence;

[ ] Fourth, 84.74% to all unitholders, pro rata, 13.26% to the holder of
the incentive distribution rights and 2% to the general partner, until
we allocate under this paragraph an amount per unit equal to:

(1) the sum of the excess of the second target distribution per unit
over the first target distribution per unit for each quarter of our
existence; less

(2) the cumulative amount per unit of any distributions of available
cash from operating surplus in excess of the first target distribution per
unit that was distributed 84.74% to the unitholders, pro rata, 13.26% to
the holder of the incentive distribution rights and 2% to the general
partner for each quarter of our existence;

[ ] Fifth, 74.26% to all unitholders, pro rata, 23.74% to the holder of
the incentive distribution rights and 2% to the general partner, until
we allocate under this paragraph an amount per unit equal to:

(1) the sum of the excess of the third target distribution per unit over
the second target distribution per unit for each quarter of our existence;
less

(2) the cumulative amount per unit of any distributions of available
cash from operating surplus in excess of the second target distribution per
unit that was distributed 74.26% to the unitholders, pro rata, 23.74% to
the holder of the incentive distribution rights and 2% to the general
partner for each quarter of our existence;

[ ] Thereafter, 49.02% to all unitholders, pro rata, 48.98% to the holder
of the incentive distribution rights and 2% to the general partner.

Manner of Adjustment for Losses. Upon our liquidation, we will generally
allocate any loss to the general partner and the unitholders in the following
manner:

[ ] First, 98% to the holders of common units in proportion to the
positive balances in their capital accounts and 2% to the general
partner until the capital accounts of the common unitholders have been
reduced to zero; and

[ ] Thereafter, 100% to the general partner.

Adjustments to Capital Accounts Upon the Issuance of Additional Units. We
will make adjustments to capital accounts upon the issuance of additional units.
In doing so, we will allocate any gain or loss resulting from the adjustments to
the unitholders and the general partner in the same manner as we allocate gain
or loss upon liquidation. In the event that we make positive interim adjustments
to the capital accounts, we will allocate any later negative adjustments to the
capital accounts resulting from the issuance of additional units or
distributions of property or upon liquidation in a manner which results, to the
extent possible, in the capital account balance of the general partner equaling
the amount which would have been in its capital account if no earlier positive
adjustments to the capital accounts had been made.

DESCRIPTION OF OUR PARTNERSHIP AGREEMENT

The following is a summary of the material provisions of our partnership
agreement. Our partnership agreement has been filed with the Securities and
Exchange Commission, and is incorporated by reference in this prospectus. The
following provisions of our partnership agreement are summarized elsewhere in
this prospectus:

[ ] allocations of taxable income and other tax matters are described
under "Material Tax Consequences"; and

[ ] rights of holders of common units are described under "Description of
Our Common Units."

PURPOSE

Our purpose under our partnership agreement is to engage directly or
indirectly in any business activity that is approved by our general partner and
that may be lawfully conducted by a limited partnership under the Delaware Act.
All of our operations are conducted through our operating company, Genesis Crude
Oil, L.P., and its subsidiaries.

POWER OF ATTORNEY

Each limited partner, and each person who acquires a unit from a unitholder
and executes and delivers a transfer application, grants to our general partner
and, if appointed, a liquidator, a power of attorney to, among other things,
execute and file documents required for our qualification, continuance or
dissolution. The power of attorney also grants the general partner the authority
to amend, and to make consents and waivers under, our partnership agreement.

REIMBURSEMENTS OF OUR GENERAL PARTNER

Our general partner does not receive any compensation for its services as
our general partner. It is, however, entitled to be reimbursed for all of its
costs incurred in managing and operating our business. Our partnership agreement
provides that our general partner will determine the expenses that are allocable
to us in any reasonable manner determined by our general partner in its sole
discretion.

ISSUANCE OF ADDITIONAL SECURITIES

Our partnership agreement authorizes us to issue an unlimited number of
additional partner securities and rights to buy partnership securities that are
equal in rank with or junior to our common units on terms and conditions
established by our general partner in its sole discretion without the approval
of the unitholders.

It is possible that we will fund acquisitions through the issuance of
additional common units or other equity securities. Holders of any additional
common units we issue will be entitled to share equally with the then-existing
holders of common units in our distributions of available cash. In addition, the
issuance of additional equity securities may dilute the value of the interests
of the then-existing holders of common units in our net assets.

In accordance with Delaware law and the provisions of our partnership
agreement, we may also issue additional equity securities that, in the sole
discretion of our general partner, may have special voting rights to which
common units are not entitled.

Our general partner has the right, which it may from time to time assign in
whole or in part to any of its affiliates, to purchase common units or other
equity securities whenever, and on the same terms that, we issue those
securities to persons other than our general partner and its affiliates, to the
extent necessary to maintain its percentage interest, including its interest
represented by common units, that existed immediately prior to the issuance. The
holders of common units will not have preemptive rights to acquire additional
common units or other partnership securities.

AMENDMENTS TO OUR PARTNERSHIP AGREEMENT

Amendments to our partnership agreement may be proposed only by or with the
consent of our general partner. Any amendment that materially and adversely
affects the rights or preferences of any type or class of limited partner
interests in relation to other types or classes of limited partner interests or
our general partner interest will require the approval of at least a majority of
the type or class of limited partner interests or general partner interests so
affected.

However, in some circumstances, more particularly described in our
partnership agreement, our general partner may make amendments to our
partnership agreement without the approval of our limited partners or assignees.

WITHDRAWAL OR REMOVAL OF OUR GENERAL PARTNER

Our general partner has agreed not to withdraw voluntarily as our general
partner prior to December 31, 2006 without obtaining the approval of the holders
of a majority of our outstanding common units and furnishing an opinion of
counsel regarding limited liability and tax matters. On or after December 31,
2006, our general partner may withdraw as general partner without first
obtaining approval of any unitholder by giving 90 days' written notice, and that
withdrawal will not constitute a violation of our partnership agreement. In
addition, our general partner may withdraw without unitholder approval upon 90
days' notice to our limited partners if at least 50% of our outstanding common
units are held or controlled by one person and its affiliates other than our
general partner and its affiliates.

Upon the voluntary withdrawal of our general partner, the holders of a
majority of our outstanding common units may elect a successor to the
withdrawing general partner. If a successor is not elected, or is elected but an
opinion of counsel regarding limited liability and tax matters cannot be
obtained, we will be dissolved, wound up and liquidated, unless within 180 days
after that withdrawal, the holders of a majority of our outstanding common units
agree in writing to continue our business and to appoint a successor general
partner.

Our general partner may be removed with or without cause. "Cause" means
that a court of competent jurisdiction has entered a final, non-appealable
judgment finding our general partner liable for actual fraud, gross negligence
or willful or wanton misconduct in its capacity as our general partner. If cause
exists, our general partner may not be removed unless that removal is approved
by the vote of the holders of not less than two-thirds of our outstanding units,
including units held by our general partner and its affiliates. If no cause
exists, our general partner may not be removed unless that removal is approved
by the vote of the holders of not less than a majority of our outstanding units,
excluding units held by our general partner and its affiliates. Any removal of
our general partner by the unitholders is also subject to the approval of a
successor general partner by the vote of the holders of a majority of our
outstanding common units and the receipt of an opinion of counsel regarding
limited liability and tax matters. If a proposed removal is without cause, and
the general partner to be removed is an affiliate of Denbury Resources, then, if
an affiliate of Denbury Resources is not proposed as a successor general
partner, any such action for removal must also provide for Denbury Resources to
be granted an option immediately upon the effectiveness of the removal to
purchase all of our ownership interest in our Mississippi pipeline system at
110% of its fair market value, as determined by independent appraisal in the
manner set forth in our partnership agreement. Denbury Resources' option will be
exercisable for a period of 45 days following the determination of such fair
market value. Additionally, upon removal of the general partner without cause,
our general partner will have the option to convert its interest in us (other
than its common units) into common units or to require our replacement general
partner to purchase such interest for cash at its then fair market value.

While our partnership agreement limits the ability of our general partner
to withdraw, it allows the general partner interest to be transferred to an
affiliate or to a third party in conjunction with a merger or sale of all or
substantially all of the assets of our general partner. In addition, our
partnership agreement expressly permits the sale, in whole or in part, of the
ownership of our general partner. Our general partner may also transfer, in
whole or in part, the common units and any other partnership securities it owns,
including the incentive distribution rights.

LIQUIDATION AND DISTRIBUTION OF PROCEEDS

Upon our dissolution, unless we are reconstituted and continued as a new
limited partnership, the person authorized to wind up our affairs (the
liquidator) will, acting with all the powers of our general partner that the
liquidator deems necessary or desirable in its judgment, liquidate our assets.
The proceeds of the liquidation will be applied as follows:

[ ] first, towards the payment of all of our creditors; and

[ ] then, to our unitholders and our general partner in accordance with
the positive balance in their respective capital accounts.

The liquidator may defer liquidation of our assets for a reasonable period
or distribute assets to our partners in kind if it determines that a sale would
be impractical or would cause undue loss to our partners.

CHANGE OF MANAGEMENT PROVISIONS

Our partnership agreement contains the following specific provisions that
are intended to discourage a person or group from attempting to remove our
general partner or otherwise change management:

[ ] any units held by a person that owns 20% or more of any class of units
then outstanding, other than our general partner and its affiliates,
cannot be voted on any matter; and

[ ] the partnership agreement contains provisions limiting the ability of
unitholders to call meetings or to acquire information about our
operations, as well as other provisions limiting the unitholders'
ability to influence the manner or direction of management.

LIMITED CALL RIGHT

If at any time our general partner and its affiliates own more than 80% of
the issued and outstanding limited partner interests of any class, our general
partner will have the right to acquire all, but not less than all, of the
outstanding limited partner interests of that class that are held by
non-affiliated persons. The record date for determining ownership of the limited
partner interests would be selected by our general partner on at least ten but
not more than 60 days notice. The purchase price in the event of a purchase
under these provisions would be the greater of (1) the current market price (as
defined in our partnership agreement) of the limited partner interests of the
class as of the date three days prior to the date that notice is mailed to the
limited partners as provided in the partnership agreement and (2) the highest
cash price paid by our general partner or any of its affiliates for any
partnership securities of the class purchased within the 90 days preceding the
date our general partner first mails notice of its election to purchase those
partnership securities.

INDEMNIFICATION

Under our partnership agreement, in most circumstances, we will indemnify
our general partner, its affiliates and their officers and directors to the
fullest extent permitted by law, from and against all losses, claims or damages
any of them may suffer by reason of their status as general partner, officer or
director, as long as the person seeking indemnity acted in good faith and in a
manner believed to be in or not opposed to our best interest. Any
indemnification under these provisions will only be out of our assets. Our
general partner and its affiliates shall not be personally liable for, or have
any obligation to contribute or loan funds or assets to us to enable us to
effectuate any indemnification. We are authorized to purchase insurance against
liabilities asserted against and expenses incurred by persons for our
activities, regardless of whether we would have the power to indemnify the
person against liabilities under our partnership agreement.

REGISTRATION RIGHTS

Under our partnership agreement, we have agreed to register for resale
under the Securities Act and applicable state securities laws any common units
or other partnership securities proposed to be sold by our general partner or
any of its affiliates or their assignees if an exemption from the registration
requirements is not otherwise available. We are obligated to pay all expenses
incidental to the registration, excluding underwriting discounts and
commissions.

MATERIAL TAX CONSEQUENCES

This section is a summary of the material tax consequences that may be
relevant to prospective unitholders who are individual citizens or residents of
the United States and, unless otherwise noted in the following discussion,
expresses the opinion of Akin Gump Strauss Hauer & Feld LLP, counsel to the
general partner and us, insofar as it relates to federal income tax matters.
This section is based upon current provisions of the Internal Revenue Code,
existing and proposed regulations and current administrative rulings and court
decisions, all of which are subject to change. Later changes in these
authorities may cause the tax consequences to vary substantially from the
consequences described below. Unless the context otherwise requires, references
in this section to "us," "we," "our," and "ours" are references to Genesis
Energy, L.P. and its subsidiaries.

This section does not comment on all federal income tax matters affecting
us or our unitholders. Moreover, the discussion focuses on unitholders who are
individual citizens or residents of the United States and has only limited
application to corporations, estates, trusts, nonresident aliens or other
unitholders subject to specialized tax treatment, such as tax-exempt
institutions, foreign persons, individual retirement accounts (IRAs), real
estate investment trusts (REITs) or mutual funds. Accordingly, we recommend that
each prospective unitholder consult, and depend on, his own tax advisor in
analyzing the federal, state, local and foreign tax consequences particular to
him of the ownership or disposition of common units.

All statements as to matters of law and legal conclusions, but not as to
factual matters, contained in this section, unless otherwise noted, are the
opinion of Akin Gump Strauss Hauer & Feld LLP and are based on the accuracy of
the representations made by us and our general partner. No ruling has been or
will be requested from the IRS regarding any matter affecting us or prospective
unitholders. Instead, we rely on opinions and advice of Akin Gump Strauss Hauer
& Feld LLP. Unlike a ruling, an opinion of counsel represents only that
counsel's best legal judgment and does not bind the IRS or the courts.
Accordingly, the opinions and statements made here may not be sustained by a
court if contested by the IRS. Any contest of this sort with the IRS may
materially and adversely impact the market for the common units and the prices
at which common units trade. In addition, the costs of any contest with the IRS
will be borne directly or indirectly by the unitholders and the general partner.
Furthermore, the tax treatment of us, or of an investment in us, may be
significantly modified by future legislative or administrative changes or court
decisions. Any modifications may or may not be retroactively applied.

For the reasons described below, Akin Gump Strauss Hauer & Feld LLP has not
rendered an opinion with respect to the following specific federal income tax
issues:

(1) the treatment of a unitholder whose common units are loaned to a
short seller to cover a short sale of common units (please read "-- Tax
Consequences of Unit Ownership -- Treatment of Short Sales" in this
prospectus);

(2) whether our monthly convention for allocating taxable income and
losses is permitted by existing Treasury Regulations (please read
"-- Disposition of Common Units -- Allocations Between Transferors and
Transferees" in this prospectus); and

(3) whether our method for depreciating Section 743 adjustments is
sustainable (please read "-- Tax Consequences of Unit Ownership -- Section
754 Election" in this prospectus).

PARTNERSHIP STATUS

A partnership is not a taxable entity and incurs no federal income tax
liability. Instead, each partner of a partnership is required to take into
account his share of items of income, gain, loss and deduction of the
partnership in computing his federal income tax liability, regardless of whether
cash distributions are made to him by the partnership. Distributions by a
partnership to a partner are generally not taxable unless the amount of cash
distributed is in excess of the partner's adjusted basis in his partnership
interest.

Section 7704 of the Internal Revenue Code provides that publicly-traded
partnerships will, as a general rule, be taxed as corporations. However, an
exception, referred to as the "Qualifying Income Exception,"

exists with respect to publicly-traded partnerships of which 90% or more of the
gross income for every taxable year consists of "qualifying income." Qualifying
income includes income and gains derived from the transportation, storage and
processing of crude oil, natural gas and products thereof and fertilizer. Other
types of qualifying income include interest (other than from a financial
business), dividends, gains from the sale of real property and gains from the
sale or other disposition of assets held for the production of income that
otherwise constitutes qualifying income. We estimate that less than 4% of our
current income is not qualifying income; however, this estimate could change
from time to time. Based upon and subject to this estimate, the factual
representations made by us and the general partner and a review of the
applicable legal authorities, Akin Gump Strauss Hauer & Feld LLP is of the
opinion that at least 90% of our current gross income constitutes qualifying
income.

No ruling has been or will be sought from the IRS and the IRS has made no
determination as to our status as a partnership for federal income tax purposes
or whether our operations generate "qualifying income" under Section 7704 of the
Code. Instead, we will rely on the opinion of Akin Gump Strauss Hauer & Feld LLP
that, based upon the Internal Revenue Code, its regulations, published revenue
rulings and court decisions and the representations described below, we will be
classified as a partnership for federal income tax purposes.

In rendering its opinion, Akin Gump Strauss Hauer & Feld LLP has relied on
factual representations made by us and our general partner. The representations
made by us and our general partner upon which counsel has relied are:

(a) Neither we nor the operating company has elected or will elect to be
treated as a corporation; and

(b) For each taxable year, more than 90% of our gross income has been
and will be income from sources that Akin Gump Strauss Hauer & Feld LLP has
opined or will opine is "qualifying income" within the meaning of Section
7704(d) of the Internal Revenue Code.

If we fail to meet the Qualifying Income Exception, other than a failure
which is determined by the IRS to be inadvertent and that is cured within a
reasonable time after discovery, we will be treated as if we had transferred all
of our assets, subject to liabilities, to a newly formed corporation, on the
first day of the year in which we fail to meet the Qualifying Income Exception,
in return for stock in that corporation, and then distributed that stock to the
unitholders in liquidation of their interests in us. This contribution and
liquidation should be tax-free to unitholders and us so long as we, at that
time, do not have liabilities in excess of the tax basis of our assets.
Thereafter, we would be treated as a corporation for federal income tax
purposes.

If we were taxable as a corporation in any taxable year, either as a result
of a failure to meet the Qualifying Income Exception or otherwise, our items of
income, gain, loss and deduction would be reflected only on our tax return
rather than being passed through to our unitholders, and our net income would be
taxed to us at corporate rates. In addition, any distribution made to a
unitholder would be treated as either taxable dividend income, to the extent of
our current or accumulated earnings and profits, or, in the absence of earnings
and profits, a nontaxable return of capital, to the extent of the unitholder's
tax basis in his common units, or taxable capital gain, after the unitholder's
tax basis in his common units is reduced to zero. Accordingly, taxation as a
corporation would result in a material reduction in a unitholder's cash flow and
after-tax return and thus would likely result in a substantial reduction of the
value of the units.

The remainder of this section is based on Akin Gump Strauss Hauer & Feld
LLP's opinion that we will be classified as a partnership for federal income tax
purposes.

LIMITED PARTNER STATUS

Unitholders who have become limited partners of Genesis will be treated as
partners of Genesis for federal income tax purposes. Also:

(a) assignees who have executed and delivered transfer applications, and
are awaiting admission as limited partners, and

(b) unitholders whose common units are held in street name or by a
nominee and who have the right to direct the nominee in the exercise of all
substantive rights attendant to the ownership of their common units,

will be treated as partners of Genesis for federal income tax purposes. As there
is no direct authority addressing assignees of common units who are entitled to
execute and deliver transfer applications and become entitled to direct the
exercise of attendant rights, but who fail to execute and deliver transfer
applications, the opinion of Akin Gump Strauss Hauer & Feld LLP does not extend
to these persons. Furthermore, a purchaser or other transferee of common units
who does not execute and deliver a transfer application may not receive some
federal income tax information or reports furnished to record holders of common
units unless the common units are held in a nominee or street name account and
the nominee or broker has executed and delivered a transfer application for
those common units.

A beneficial owner of common units whose units have been transferred to a
short seller to complete a short sale would appear to lose his status as a
partner with respect to those units for federal income tax purposes. Please read
"-- Tax Consequences of Unit Ownership -- Treatment of Short Sales" in this
prospectus.

Income, gain, deductions or losses would not appear to be reportable by a
unitholder who is not a partner for federal income tax purposes, and any cash
distributions received by a unitholder who is not a partner for federal income
tax purposes would therefore be fully taxable as ordinary income. These holders
are urged to consult their own tax advisors with respect to their status as
partners in Genesis for federal income tax purposes.

TAX CONSEQUENCES OF UNIT OWNERSHIP

Flow-through of Taxable Income. We will not pay any federal income tax.
Instead, each unitholder will be required to report on his income tax return his
share of our income, gains, losses and deductions without regard to whether
corresponding cash distributions are received by him. Consequently, we may
allocate income to a unitholder even if he has not received a cash distribution.
Each unitholder will be required to include in income his allocable share of our
income, gains, losses and deductions for our taxable year ending with or within
his taxable year. Our taxable year ends on December 31.

Treatment of Distributions. Distributions by us to a unitholder generally
will not be taxable to the unitholder for federal income tax purposes to the
extent of his tax basis in his common units immediately before the distribution.
Our cash distributions in excess of a unitholder's tax basis generally will be
considered to be gain from the sale or exchange of the common units, taxable in
accordance with the rules described under "-- Disposition of Common Units"
below. Any reduction in a unitholder's share of our liabilities for which no
partner, including the general partner, bears the economic risk of loss, known
as "nonrecourse liabilities," will be treated as a distribution of cash to that
unitholder. To the extent our distributions cause a unitholder's "at risk"
amount to be less than zero at the end of any taxable year, he must recapture
any losses deducted in previous years. Please read "-- Limitations on
Deductibility of Losses."

A decrease in a unitholder's percentage interest in us because of our
issuance of additional common units will decrease his share of our nonrecourse
liabilities, and thus will result in a corresponding deemed distribution of
cash. A non-pro rata distribution of money or property may result in ordinary
income to a unitholder, regardless of his tax basis in his common units, if the
distribution reduces the unitholder's share of our "unrealized receivables,"
including depreciation recapture, and/or substantially appreciated "inventory
items," both as defined in Section 751 of the Internal Revenue Code, and
collectively, "Section 751 Assets." To that extent, he will be treated as having
been distributed his proportionate share of the Section 751 Assets and having
exchanged those assets with us in return for the non-pro rata portion of the
actual distribution made to him. This latter deemed exchange will generally
result in the unitholder's realization of ordinary income. That income will
equal the excess of (1) the non-pro rata portion of that distribution over (2)
the unitholder's tax basis for the share of Section 751 Assets deemed
relinquished in the exchange.

Basis of Common Units. A unitholder's initial tax basis for his common
units will be the amount he paid for the common units plus his share of our
nonrecourse liabilities. That basis will be increased by his share of our income
and by any increases in his share of our nonrecourse liabilities. That basis
will be decreased, but not below zero, by distributions from us, by the
unitholder's share of our losses, by any decreases in his share of our
nonrecourse liabilities and by his share of our expenditures that are not
deductible in computing taxable income and are not required to be capitalized. A
unitholder will have no share of our debt which is recourse to the general
partner, but will have a share, generally based on his share of profits, of our
nonrecourse liabilities. Please read "-- Disposition of Common
Units -- Recognition of Gain or Loss."

Limitations on Deductibility of Losses. The deduction by a unitholder of
his share of our losses will be limited to the tax basis in his units and, in
the case of an individual unitholder or a corporate unitholder, if more than 50%
of the value of the corporate unitholder's stock is owned directly or indirectly
by five or fewer individuals or some tax-exempt organizations, to the amount for
which the unitholder is considered to be "at risk" with respect to our
activities, if that is less than his tax basis. A unitholder must recapture
losses deducted in previous years to the extent that distributions cause his at
risk amount to be less than zero at the end of any taxable year. Losses
disallowed to a unitholder or recaptured as a result of these limitations will
carry forward and will be allowable to the extent that his tax basis or at risk
amount, whichever is the limiting factor, is subsequently increased. Upon the
taxable disposition of a unit, any gain recognized by a unitholder can be offset
by losses that were previously suspended by the at risk limitation but may not
be offset by losses suspended by the basis limitation. Any excess loss above
that gain previously suspended by the at risk or basis limitations is no longer
utilizable.

In general, a unitholder will be at risk to the extent of the tax basis of
his units, excluding any portion of that basis attributable to his share of our
nonrecourse liabilities, reduced by any amount of money he borrows to acquire or
hold his units, if the lender of those borrowed funds owns an interest in us, is
related to the unitholder or can look only to the units for repayment. A
unitholder's at risk amount will increase or decrease as the tax basis of the
unitholder's units increases or decreases, other than tax basis increases or
decreases attributable to increases or decreases in his share of our nonrecourse
liabilities.

The passive loss limitations generally provide that individuals, estates,
trusts and some closely-held corporations and personal service corporations can
deduct losses from passive activities, which are generally activities in which
the taxpayer does not materially participate, only to the extent of the
taxpayer's income from those passive activities. The passive loss limitations
are applied separately with respect to each publicly-traded partnership.
Consequently, any losses we generate will only be available to offset our
passive income generated in the future and will not be available to offset
income from other passive activities or investments, including our investments
or investments in other publicly-traded partnerships, or salary or active
business income. Passive losses that are not deductible because they exceed a
unitholder's share of income we generate may be deducted in full when such
unitholder disposes of his entire investment in us in a fully taxable
transaction with an unrelated party. The passive activity loss rules are applied
after other applicable limitations on deductions, including the at risk rules
and the basis limitation.

A unitholder's share of our net income may be offset by any suspended
passive losses, but it may not be offset by any other current or carryover
losses from other passive activities, including those attributable to other
publicly-traded partnerships.

Limitations on Interest Deductions. The deductibility of a non-corporate
taxpayer's "investment interest expense" is generally limited to the amount of
that taxpayer's "net investment income." Investment interest expense includes:

[ ] interest on indebtedness properly allocable to property held for
investment;

[ ] our interest expense attributed to portfolio income; and

[ ] the portion of interest expense incurred to purchase or carry an
interest in a passive activity to the extent attributable to portfolio
income.

The computation of a unitholder's investment interest expense will take
into account interest on any margin account borrowing or other loan incurred to
purchase or carry a unit. Net investment income includes gross income from
property held for investment and amounts treated as portfolio income under the
passive loss rules, less deductible expenses, other than interest, directly
connected with the production of investment income, but generally does not
include gains attributable to the disposition of property held for investment.
The IRS has indicated that net passive income from a publicly-traded partnership
constitutes investment income for purposes of the limitations on the
deductibility of investment interest. In addition, the unitholder's share of our
portfolio income will be treated as investment income.

Entity-Level Collections. If we are required or elect under applicable law
to pay any federal, state or local income tax on behalf of any unitholder or the
general partner or any former unitholder, we are authorized to pay those taxes
from our funds. That payment, if made, will be treated as a distribution of cash
to the partner on whose behalf the payment was made. If the payment is made on
behalf of a person whose identity cannot be determined, we are authorized to
treat the payment as a distribution to all current unitholders. We are
authorized to amend the partnership agreement in the manner necessary to
maintain uniformity of intrinsic tax characteristics of units and to adjust
later distributions, so that after giving effect to these distributions, the
priority and characterization of distributions otherwise applicable under the
partnership agreement is maintained as nearly as is practicable. Payments by us
as described above could give rise to an overpayment of tax on behalf of an
individual partner in which event the partner would be required to file a claim
in order to obtain a credit or refund.

Allocation of Income, Gain, Loss and Deduction. In general, if we have a
net profit, our items of income, gain, loss and deduction will be allocated
among the general partner and the unitholders in accordance with their
percentage interests in us. At any time that incentive distributions are made to
the general partner, gross income will be allocated to the recipients to the
extent of these distributions. If we have a net loss for the entire year, that
loss will be allocated first to the general partner and the unitholders in
accordance with their percentage interests in us to the extent of their positive
capital accounts and, second, to the general partner.

Specified items of our income, gain, loss and deduction will be allocated
to account for the difference between the tax basis and fair market value of our
assets at the time of an offering, referred to in this discussion as
"Contributed Property." The effect of these allocations to a unitholder
purchasing common units in our offering will be essentially the same as if the
tax basis of our assets were equal to their fair market value at the time of the
offering. In addition, items of recapture income will be allocated to the extent
possible to the partner who was allocated the deduction giving rise to the
treatment of that gain as recapture income in order to minimize the recognition
of ordinary income by some unitholders. Finally, although we do not expect that
our operations will result in the creation of negative capital accounts, if
negative capital accounts nevertheless result, items of our income and gain will
be allocated in an amount and manner to eliminate the negative balance as
quickly as possible.

An allocation of items of our income, gain, loss or deduction, other than
an allocation required by the Internal Revenue Code to eliminate the difference
between a partner's "book" capital account, credited with the fair market value
of Contributed Property, and "tax" capital account, credited with the tax basis
of Contributed Property, referred to in this discussion as the "Book-Tax
Disparity," will generally be given effect for federal income tax purposes in
determining a partner's share of an item of income, gain, loss or deduction only
if the allocation has substantial economic effect. In any other case, a
partner's share of an item will be determined on the basis of his interest in
us, which will be determined by taking into account all the facts and
circumstances, including his relative contributions to us, the interests of all
the partners in profits and losses, the interest of all the partners in cash
flow and other nonliquidating distributions and rights of all the partners to
distributions of capital upon liquidation.

Akin Gump Strauss Hauer & Feld LLP is of the opinion that, with the
exception of the issues described in "-- Tax Consequences of Unit
Ownership -- Section 754 Election" and "-- Disposition of Common
Units -- Allocations Between Transferors and Transferees," in this prospectus
allocations under our partner-

ship agreement will be given effect for federal income tax purposes in
determining a partner's share of an item of income, gain, loss or deduction.

Treatment of Short Sales. A unitholder whose units are loaned to a "short
seller" to cover a short sale of units may be considered as having disposed of
those units. If so, he would no longer be a partner for those units during the
period of the loan and may recognize gain or loss from the disposition. As a
result, during this period:

[ ] any of our income, gain, loss or deduction with respect to those units
would not be reportable by the unitholder;

[ ] any cash distributions received by the unitholder as to those units
would be fully taxable; and

[ ] all of these distributions would appear to be ordinary income.

Akin Gump Strauss Hauer & Feld LLP has not rendered an opinion regarding
the treatment of a unitholder where common units are loaned to a short seller to
cover a short sale of common units; therefore, unitholders desiring to assure
their status as partners and avoid the risk of gain recognition from a loan to a
short seller should modify any applicable brokerage account agreements to
prohibit their brokers from borrowing their units. The IRS has announced that it
is actively studying issues relating to the tax treatment of short sales of
partnership interests. Please also read "-- Disposition of Common
Units -- Recognition of Gain or Loss."

Alternative Minimum Tax. Each unitholder will be required to take into
account his distributive share of any items of our income, gain, loss or
deduction for purposes of the alternative minimum tax. The current minimum tax
rate for noncorporate taxpayers is 26% on the first $175,000 of alternative
minimum taxable income in excess of the exemption amount and 28% on any
additional alternative minimum taxable income. Prospective unitholders are urged
to consult with their tax advisors as to the impact of an investment in units on
their liability for the alternative minimum tax.

Tax Rates. In general, the highest effective United States federal income
tax rate for individuals currently is 35% and the maximum United States federal
income tax rate for net capital gains of an individual currently is 15% if the
asset disposed of was held for more than 12 months at the time of disposition.

Section 754 Election. We have made the election permitted by Section 754
of the Internal Revenue Code. That election is irrevocable without the consent
of the IRS. The election will generally permit us to adjust a common unit
purchaser's tax basis in our assets ("inside basis") under Section 743(b) of the
Internal Revenue Code to reflect his purchase price. This election does not
apply to a person who purchases common units directly from us. The Section
743(b) adjustment belongs to the purchaser and not to other partners. For
purposes of this discussion, a partner's inside basis in our assets will be
considered to have two components: (1) his share of our tax basis in our assets
("common basis") and (2) his Section 743(b) adjustment to that basis.

Treasury regulations under Section 743 of the Internal Revenue Code
require, if the remedial allocation method is adopted (which we have adopted), a
portion of the Section 743(b) adjustment attributable to recovery property to be
depreciated over the remaining cost recovery period for the Section 704(c)
built-in gain. Under Treasury Regulation Section 1.167(c)-l(a)(6), a Section
743(b) adjustment attributable to property subject to depreciation under Section
167 of the Internal Revenue Code rather than cost recovery deductions under
Section 168 is generally required to be depreciated using either the
straight-line method or the 150% declining balance method. Under our partnership
agreement, the general partner is authorized to take a position to preserve the
uniformity of units even if that position is not consistent with these Treasury
regulations. Please read "-- Tax Treatment of Operations -- Uniformity of Units"
in this prospectus.

Although Akin Gump Strauss Hauer & Feld LLP is unable to opine as to the
validity of this approach because there is no clear authority on this issue, we
intend to depreciate the portion of a Section 743(b) adjustment attributable to
unrealized appreciation in the value of Contributed Property, to the extent of
any unamortized Book-Tax Disparity, using a rate of depreciation or amortization
derived from the depreciation or amortization method and useful life applied to
the common basis of the property, or treat that portion as

non-amortizable to the extent attributable to property the common basis of which
is not amortizable. This method is consistent with the regulations under Section
743 but is arguably inconsistent with Treasury Regulation Section
1.167(c)-1(a)(6), which is not expected to directly apply to a material portion
of our assets. To the extent this Section 743(b) adjustment is attributable to
appreciation in value in excess of the unamortized Book-Tax Disparity, we will
apply the rules described in the Treasury regulations and legislative history.
If we determine that this position cannot reasonably be taken, we may take a
depreciation or amortization position under which all purchasers acquiring units
in the same month would receive depreciation or amortization, whether
attributable to common basis or a Section 743(b) adjustment, based upon the same
applicable rate as if they had purchased a direct interest in our assets. This
kind of aggregate approach may result in lower annual depreciation or
amortization deductions than would otherwise be allowable to some unitholders.
Please read "-- Tax Treatment of Operations -- Uniformity of Units" in this
prospectus.

A Section 754 election is advantageous if the transferee's tax basis in his
units is higher than the units' share of the aggregate tax basis of our assets
immediately prior to the transfer. In that case, as a result of the election,
the transferee would have, among other items, a greater amount of depreciation
and depletion deductions and his share of any gain on a sale of our assets would
be less. Conversely, a Section 754 election is disadvantageous if the
transferee's tax basis in his units is lower than those units' share of the
aggregate tax basis of our assets immediately prior to the transfer. Thus, the
fair market value of the units may be affected either favorably or unfavorably
by the election.

The calculations involved in the Section 754 election are complex and will
be made on the basis of assumptions as to the value of our assets and other
matters. For example, the allocation of the Section 743(b) adjustment among our
assets must be made in accordance with the Internal Revenue Code. The IRS could
seek to reallocate some or all of any Section 743(b) adjustment we allocated to
our tangible assets to goodwill instead. Goodwill, as an intangible asset, is
generally amortizable over a longer period of time or under a less accelerated
method than our tangible assets. We cannot assure you that the determinations we
make will not be successfully challenged by the IRS and that the deductions
resulting from them will not be reduced or disallowed altogether. Should the IRS
require a different basis adjustment to be made, and should, in our opinion, the
expense of compliance exceed the benefit of the election, we may seek permission
from the IRS to revoke our Section 754 election. If permission is granted, a
subsequent purchaser of units may be allocated more income than he would have
been allocated had the election not been revoked.

TAX TREATMENT OF OPERATIONS

Accounting Method and Taxable Year. We use the year ending December 31 as
our taxable year and the accrual method of accounting for federal income tax
purposes. Each unitholder will be required to include in income his share of our
income, gain, loss and deduction for our taxable year ending within or with his
taxable year. In addition, a unitholder who has a taxable year ending on a date
other than December 31 and who disposes of all of his units following the close
of our taxable year but before the close of his taxable year must include his
share of our income, gain, loss and deduction in income for his taxable year,
with the result that he will be required to include in income for his taxable
year his share of more than one year of our income, gain, loss and deduction.
Please read "-- Disposition of Common Units -- Allocations Between Transferors
and Transferees" in this prospectus.

Tax Basis, Depreciation and Amortization. The tax basis of our assets will
be used for purposes of computing depreciation and cost recovery deductions and,
ultimately, gain or loss on the disposition of these assets. The federal income
tax burden associated with the difference between the fair market value of our
assets and their tax basis immediately prior to an offering will be borne by the
general partner, its affiliates and our other unitholders as of that time.
Please read "-- Tax Consequences of Unit Ownership -- Allocation of Income,
Gain, Loss and Deduction" in this prospectus.

To the extent allowable, we may elect to use the depreciation and cost
recovery methods that will result in the largest deductions being taken in the
early years after assets are placed in service. We were not entitled to any
amortization deductions with respect to any goodwill conveyed to us on
formation. Property we

subsequently acquire or construct may be depreciated using accelerated methods
permitted by the Internal Revenue Code.

If we dispose of depreciable property by sale, foreclosure, or otherwise,
all or a portion of any gain, determined by reference to the amount of
depreciation previously deducted and the nature of the property, may be subject
to the recapture rules and taxed as ordinary income rather than capital gain.
Similarly, a partner who has taken cost recovery or depreciation deductions with
respect to property we own will likely be required to recapture some or all of
those deductions as ordinary income upon a sale of his interest in us. Please
read "-- Tax Consequences of Unit Ownership -- Allocation of Income, Gain, Loss
and Deduction" and "-- Disposition of Common Units -- Recognition of Gain or
Loss" in this prospectus.

The costs incurred in selling our units (called "syndication expenses")
must be capitalized and cannot be deducted currently, ratably or upon our
termination. There are uncertainties regarding the classification of costs as
organization expenses, which we may amortize, and as syndication expenses, which
we may not amortize. The underwriting discounts and commissions we incur will be
treated as syndication expenses.

Valuation and Tax Basis of Our Properties. The federal income tax
consequences of the ownership and disposition of units will depend in part on
our estimates of the relative fair market values, and the tax bases, of our
assets. Although we may from time to time consult with professional appraisers
regarding valuation matters, we will make many of the relative fair market value
estimates ourselves. These estimates of basis are subject to challenge and will
not be binding on the IRS or the courts. If the estimates of fair market value
or basis are later found to be incorrect, the character and amount of items of
income, gain, loss or deductions previously reported by unitholders might
change, and unitholders might be required to adjust their tax liability for
prior years and incur interest and penalties with respect to those adjustments.

DISPOSITION OF COMMON UNITS

Recognition of Gain or Loss. Gain or loss will be recognized on a sale of
units equal to the difference between the amount realized and the unitholder's
tax basis for the units sold. A unitholder's amount realized will be measured by
the sum of the cash or the fair market value of other property he receives plus
his share of our nonrecourse liabilities. Because the amount realized includes a
unitholder's share of our nonrecourse liabilities, the gain recognized on the
sale of units could result in a tax liability in excess of any cash received
from the sale.

Prior distributions from us in excess of cumulative net taxable income for
a common unit that decreased a unitholder's tax basis in that common unit will,
in effect, become taxable income if the common unit is sold at a price greater
than the unitholder's tax basis in that common unit, even if the price received
is less than his original cost.

Except as noted below, gain or loss recognized by a unitholder, other than
a "dealer" in units, on the sale or exchange of a unit held for more than one
year will generally be taxable as capital gain or loss. Capital gain recognized
by an individual on the sale of units held more than 12 months will generally be
taxed at a maximum rate of 15%. A portion of this gain or loss, which will
likely be substantial, however, will be separately computed and taxed as
ordinary income or loss under Section 751 of the Internal Revenue Code to the
extent attributable to assets giving rise to depreciation recapture or other
"unrealized receivables" or to "inventory items" we own. The term "unrealized
receivables" includes potential recapture items, including depreciation
recapture. Ordinary income attributable to unrealized receivables, inventory
items and depreciation recapture may exceed net taxable gain realized upon the
sale of a unit and may be recognized even if there is a net taxable loss
realized on the sale of a unit. Thus, a unitholder may recognize both ordinary
income and a capital loss upon a sale of units. Net capital loss may offset
capital gains and no more than $3,000 of ordinary income, in the case of
individuals, and may only be used to offset capital gain in the case of
corporations.

The IRS has ruled that a partner who acquires interests in a partnership in
separate transactions must combine those interests and maintain a single
adjusted tax basis for all those interests. Upon a sale or other disposition of
less than all of those interests, a portion of that tax basis must be allocated
to the interests sold

using an "equitable apportionment" method. Treasury regulations under Section
1223 of the Internal Revenue Code allow a selling unitholder who can identify
common units transferred with an ascertainable holding period to elect to use
the actual holding period of the common units transferred. Thus, according to
the ruling, a common unitholder will be unable to select high or low basis
common units to sell as would be the case with corporate stock, but, according
to the regulations, may designate specific common units sold for purposes of
determining the holding period of units transferred. A unitholder electing to
use the actual holding period of common units transferred must consistently use
that identification method for all subsequent sales or exchanges of common
units. A unitholder considering the purchase of additional units or a sale of
common units purchased in separate transactions is urged to consult his tax
advisor as to the possible consequences of this ruling and application of the
Treasury regulations.

Specific provisions of the Internal Revenue Code affect the taxation of
some financial products and securities, including partnership interests, by
treating a taxpayer as having sold an "appreciated" partnership interest, one in
which gain would be recognized if it were sold, assigned or terminated at its
fair market value, if the taxpayer or related persons enter(s) into:

[ ] a short sale;

[ ] an offsetting notional principal contract; or

[ ] a futures or forward contract with respect to the partnership interest
or substantially identical property.

Moreover, if a taxpayer has previously entered into a short sale, an
offsetting notional principal contract or a futures or forward contract with
respect to the partnership interest, the taxpayer will be treated as having sold
that position if the taxpayer or a related person then acquires the partnership
interest or substantially identical property. The Secretary of Treasury is also
authorized to issue regulations that treat a taxpayer that enters into
transactions or positions that have substantially the same effect as the
preceding transactions as having constructively sold the financial position.

Allocations Between Transferors and Transferees. In general, our taxable
income and losses will be determined annually, will be prorated on a monthly
basis and will be subsequently apportioned among the unitholders in proportion
to the number of units owned by each of them as of the opening of the applicable
exchange on the first business day of the month (the "Allocation Date").
However, gain or loss realized on a sale or other disposition of our assets
other than in the ordinary course of business will be allocated among the
unitholders on the Allocation Date in the month in which that gain or loss is
recognized. As a result, a unitholder transferring units may be allocated
income, gain, loss and deduction realized after the date of transfer.

The use of this method may not be permitted under existing Treasury
regulations. Accordingly, Akin Gump Strauss Hauer & Feld LLP is unable to opine
on the validity of this method of allocating income and deductions between
unitholders. If this method is not allowed under the Treasury regulations, or
only applies to transfers of less than all of the unitholder's interest, our
taxable income or losses might be reallocated among the unitholders. We are
authorized to revise our method of allocation between unitholders to conform to
a method permitted under future Treasury regulations.

A unitholder who owns units at any time during a quarter and who disposes
of them prior to the record date set for a cash distribution for that quarter
will be allocated items of our income, gain, loss and deductions attributable to
that quarter but will not be entitled to receive that cash distribution.

Notification Requirements. A purchaser of units from another unitholder is
required to notify us in writing of that purchase within 30 days after the
purchase. We are required to notify the IRS of that transaction and to furnish
specified information to the transferor and transferee. However, these reporting
requirements do not apply to a sale by an individual who is a citizen of the
United States and who effects the sale or exchange through a broker.

Constructive Termination. We will be considered to have been terminated
for tax purposes if there is a sale or exchange of 50% or more of the total
interests in our capital and profits within a 12-month period. A

constructive termination results in the closing of our taxable year for all
unitholders. In the case of a unitholder reporting on a taxable year other than
a fiscal year ending December 31, the closing of our taxable year may result in
more than 12 months of our taxable income or loss being includable in his
taxable income for the year of termination. We would be required to make new tax
elections after a termination, including a new election under Section 754 of the
Internal Revenue Code, and a termination would result in a deferral of our
deductions for depreciation. A termination could also result in penalties if we
were unable to determine that the termination had occurred. Moreover, a
termination might either accelerate the application of, or subject us to, any
tax legislation enacted before the termination.

UNIFORMITY OF UNITS

Because we cannot match transferors and transferees of units, we must
maintain uniformity of the economic and tax characteristics of the units to a
purchaser of these units. In the absence of uniformity, we may be unable to
completely comply with a number of federal income tax requirements, both
statutory and regulatory. A lack of uniformity can result from a literal
application of Treasury Regulation Section 1.167(c)-1(a)(6). Any non-uniformity
could have a negative impact on the value of the units. Please read "-- Tax
Consequences of Unit Ownership -- Section 754 Election" in this prospectus.

We intend to depreciate the portion of a Section 743(b) adjustment
attributable to unrealized appreciation in the value of Contributed Property, to
the extent of any unamortized Book-Tax Disparity, using a rate of depreciation
or amortization derived from the depreciation or amortization method and useful
life applied to the common basis of that property, or treat that portion as
nonamortizable, to the extent attributable to property the common basis of which
is not amortizable, consistent with the regulations under Section 743, even
though that position may be inconsistent with Treasury Regulation Section
1.167(c)-1(a)(6) which is not expected to apply directly to a material portion
of our assets. Please read "-- Tax Consequences of Unit Ownership -- Section 754
Election" in this prospectus. To the extent that the Section 743(b) adjustment
is attributable to appreciation in value in excess of the unamortized Book-Tax
Disparity, we will apply the rules described in the Treasury regulations and
legislative history. If we determine that this position cannot reasonably be
taken, we may adopt a depreciation and amortization position under which all
purchasers acquiring units in the same month would receive depreciation and
amortization deductions, whether attributable to a common basis or Section
743(b) adjustment, based upon the same applicable rate as if they had purchased
a direct interest in our property. If this position is adopted, it may result in
lower annual depreciation and amortization deductions than would otherwise be
allowable to some unitholders and risk the loss of depreciation and amortization
deductions not taken in the year that these deductions are otherwise allowable.
This position will not be adopted if we determine that the loss of depreciation
and amortization deductions will have a material adverse effect on the
unitholders. If we choose not to utilize this aggregate method, we may use any
other reasonable depreciation and amortization method to preserve the uniformity
of the intrinsic tax characteristics of any units that would not have a material
adverse effect on the unitholders. The IRS may challenge any method of
depreciating the Section 743(b) adjustment described in this paragraph. If this
challenge were sustained, the uniformity of units might be affected, and the
gain from the sale of units might be increased without the benefit of additional
deductions. Please read "-- Disposition of Common Units -- Recognition of Gain
or Loss" in this prospectus.

TAX-EXEMPT ORGANIZATIONS AND OTHER INVESTORS

Ownership of units by employee benefit plans, other tax-exempt
organizations, non-resident aliens, foreign corporations, other foreign persons
and regulated investment companies raises issues unique to those investors and,
as described below, may have substantially adverse tax consequences to them.

Employee benefit plans and most other organizations exempt from federal
income tax, including individual retirement accounts and other retirement plans,
are subject to federal income tax on unrelated business taxable income.
Virtually all of our income allocated to a unitholder which is a tax-exempt
organization will be unrelated business taxable income and will be taxable to
them.

A regulated investment company or "mutual fund" is required to derive 90%
or more of its gross income from interest, dividends and gains from the sale of
stocks or securities or foreign currency or specified related sources. It is not
anticipated that any significant amount of our gross income will include that
type of income. Recent legislation also includes net income derived from the
ownership of an interest in a "qualified publicly traded partnership" as
qualified income to a regulated investment company. We expect that we will meet
the definition of a qualified publicly traded partnership. However, this
legislation is only effective for taxable years beginning after October 22,
2004.

Non-resident aliens and foreign corporations, trusts or estates that own
units will be considered to be engaged in business in the United States because
of the ownership of units. As a consequence they will be required to file
federal tax returns to report their share of our income, gain, loss or deduction
and pay federal income tax at regular rates on their share of our net income or
gain. Under rules applicable to publicly traded partnerships, we will withhold
tax, at the highest effective rate applicable to individuals, from cash
distributions made quarterly to foreign unitholders. Each foreign unitholder
must obtain a taxpayer identification number from the IRS and submit that number
to our transfer agent on a Form W-8 BEN or applicable substitute form in order
to obtain credit for these withholding taxes. A change in applicable law may
require us to change these procedures.

In addition, because a foreign corporation that owns units will be treated
as engaged in a United States trade or business, that corporation may be subject
to the United States branch profits tax at a rate of 30%, in addition to regular
federal income tax, on its share of our income and gain, as adjusted for changes
in the foreign corporation's "U.S. net equity," which is effectively connected
with the conduct of a United States trade or business. That tax may be reduced
or eliminated by an income tax treaty between the United States and the country
in which the foreign corporate unitholder is a "qualified resident." In
addition, this type of unitholder is subject to special information reporting
requirements under Section 6038C of the Internal Revenue Code.

Under a ruling of the IRS, a foreign unitholder who sells or otherwise
disposes of a unit will be subject to federal income tax on gain realized on the
sale or disposition of that unit to the extent that this gain is effectively
connected with a United States trade or business of the foreign unitholder.
Apart from the ruling, a foreign unitholder will not be taxed or subject to
withholding upon the sale or disposition of a unit if he has owned less than 5%
in value of the units during the five-year period ending on the date of the
disposition and if the units are regularly traded on an established securities
market at the time of the sale or disposition.

ADMINISTRATIVE MATTERS

Information Returns and Audit Procedures. We intend to furnish to each
unitholder, within 90 days after the close of each calendar year, specific tax
information, including a Schedule K-1, which describes his share of our income,
gain, loss and deduction for our preceding taxable year. In preparing this
information, which will not be reviewed by counsel, we will take various
accounting and reporting positions, some of which have been mentioned earlier,
to determine his share of income, gain, loss and deduction. We cannot assure you
that those positions will yield a result that conforms to the requirements of
the Internal Revenue Code, regulations or administrative interpretations of the
IRS. Neither we nor counsel can assure prospective unitholders that the IRS will
not successfully contend in court that those positions are impermissible. Any
challenge by the IRS could negatively affect the value of the units.

The IRS may audit our federal income tax information returns. Adjustments
resulting from an IRS audit may require each unitholder to adjust a prior year's
tax liability, and possibly may result in an audit of his own return. Any audit
of a unitholder's return could result in adjustments not related to our returns
as well as those related to our returns.

Partnerships generally are treated as separate entities for purposes of
federal tax audits, judicial review of administrative adjustments by the IRS and
tax settlement proceedings. The tax treatment of partnership items of income,
gain, loss and deduction are determined in a partnership proceeding rather than
in separate proceedings with the partners. The Internal Revenue Code requires
that one partner be designated as the

"Tax Matters Partner" for these purposes. The partnership agreement names our
general partner as our Tax Matters Partner.

The Tax Matters Partner will make some elections on our behalf and on
behalf of unitholders. In addition, the Tax Matters Partner can extend the
statute of limitations for assessment of tax deficiencies against unitholders
for items in our returns. The Tax Matters Partner may bind a unitholder with
less than a 1% profits interest in us to a settlement with the IRS unless that
unitholder elects, by filing a statement with the IRS, not to give that
authority to the Tax Matters Partner. The Tax Matters Partner may seek judicial
review, by which all the unitholders are bound, of a final partnership
administrative adjustment and, if the Tax Matters Partner fails to seek judicial
review, judicial review may be sought by any unitholder having at least a 1%
interest in profits or by any group of unitholders having in the aggregate at
least a 5% interest in profits. However, only one action for judicial review
will go forward, and each unitholder with an interest in the outcome may
participate.

A unitholder must file a statement with the IRS identifying the treatment
of any item on his federal income tax return that is not consistent with the
treatment of the item on our return. Intentional or negligent disregard of this
consistency requirement may subject a unitholder to substantial penalties.

Nominee Reporting. Persons who hold an interest in us as a nominee for
another person are required to furnish to us:

(a) the name, address and taxpayer identification number of the
beneficial owner and the nominee;

(b) whether the beneficial owner is

(1) a person that is not a United States person,

(2) a foreign government, an international organization or any wholly
owned agency or instrumentality of either of the foregoing, or

(3) a tax-exempt entity;

(d) specific information including the dates of acquisitions and
transfers, means of acquisitions and transfers, and acquisition cost for
purchases, as well as the amount of net proceeds from sales.

Brokers and financial institutions are required to furnish additional
information, including whether they are United States persons and specific
information on units they acquire, hold or transfer for their own account. A
penalty of $50 per failure, up to a maximum of $100,000 per calendar year, is
imposed by the Internal Revenue Code for failure to report that information to
us. The nominee is required to supply the beneficial owner of the units with the
information furnished to us.

Accuracy-related and Assessable Penalties. An additional tax equal to 20%
of the amount of any portion of an underpayment of tax that is attributable to
one or more specified causes, including negligence or disregard of rules or
regulations, substantial understatements of income tax and substantial valuation
misstatements, is imposed by the Internal Revenue Code. No penalty will be
imposed, however, for any portion of an underpayment if it is shown that there
was a reasonable cause for that portion and that the taxpayer acted in good
faith regarding that portion.

A substantial understatement of income tax in any taxable year exists if
the amount of the understatement exceeds the greater of 10% of the tax required
to be shown on the return for the taxable year or $5,000 ($10,000 for most
corporations). The amount of any understatement subject to penalty generally is
reduced if any portion is attributable to a position adopted on the return:

(1) for which there is, or was, "substantial authority," or

(2) as to which there is a reasonable basis and the pertinent facts of
that position are disclosed on the return.

More stringent rules, including additional penalties and extended statutes
of limitations, may apply as a result of our participation in "listed
transactions" or "reportable transactions with a significant tax avoidance
purpose." While we do not anticipate participating in such transactions, if any
item of income, gain, loss or deduction included in the distributive shares of
unitholders might result in that kind of an "understatement" of income relating
to such a transaction, we must disclose the pertinent facts on our return. In
addition, we will make a reasonable effort to furnish sufficient information for
unitholders to make adequate disclosure on their returns and to take other
actions as may be appropriate to permit unitholders to avoid liability for
penalties.

A substantial valuation misstatement exists if the value of any property,
or the adjusted basis of any property, claimed on a tax return is 200% or more
of the amount determined to be the correct amount of the valuation or adjusted
basis. No penalty is imposed unless the portion of the underpayment attributable
to a substantial valuation misstatement exceeds $5,000 ($10,000 for most
corporations). If the valuation claimed on a return is 400% or more than the
correct valuation, the penalty imposed increases to 40%.

STATE, LOCAL AND OTHER TAX CONSIDERATIONS

In addition to federal income taxes, you will be subject to other taxes,
including state and local income taxes, unincorporated business taxes, and
estate, inheritance or intangible taxes that may be imposed by the various
jurisdictions in which we do business or own property or in which you are a
resident. We currently do business or own property in 8 states, most of which
impose income taxes. We may also own property or do business in other states in
the future. Although an analysis of those various taxes is not presented here,
each prospective unitholder is urged to consider their potential impact on his
investment in us. You may not be required to file a return and pay taxes in some
states because your income from that state falls below the filing and payment
requirement. You will be required, however, to file state income tax returns and
to pay state income taxes in many of the states in which we do business or own
property, and you may be subject to penalties for failure to comply with those
requirements. In some states, tax losses may not produce a tax benefit in the
year incurred and also may not be available to offset income in subsequent
taxable years. Some of the states may require us, or we may elect, to withhold a
percentage of income from amounts to be distributed to a unitholder who is not a
resident of the state. Withholding, the amount of which may be greater or less
than a particular unitholder's income tax liability to the state, generally does
not relieve a nonresident unitholder from the obligation to file an income tax
return. Amounts withheld may be treated as if distributed to unitholders for
purposes of determining the amounts distributed by us. Please read "-- Tax
Consequences of Unit Ownership -- Entity-Level Collections" in this prospectus.

IT IS THE RESPONSIBILITY OF EACH UNITHOLDER TO INVESTIGATE THE LEGAL AND
TAX CONSEQUENCES, UNDER THE LAWS OF PERTINENT STATES AND LOCALITIES, OF HIS
INVESTMENT IN US. ACCORDINGLY, WE STRONGLY RECOMMEND THAT EACH PROSPECTIVE
UNITHOLDER CONSULT, AND DEPEND UPON, HIS OWN TAX COUNSEL OR OTHER ADVISOR WITH
REGARD TO THOSE MATTERS. FURTHER, IT IS THE RESPONSIBILITY OF EACH UNITHOLDER TO
FILE ALL STATE AND LOCAL, AS WELL AS UNITED STATES FEDERAL TAX RETURNS, THAT MAY
BE REQUIRED OF HIM. AKIN GUMP STRAUSS HAUER & FELD LLP HAS NOT RENDERED AN
OPINION ON THE STATE OR LOCAL TAX CONSEQUENCES OF AN INVESTMENT IN US.

INVESTMENT IN GENESIS BY EMPLOYEE BENEFIT PLANS

An investment in Genesis by an employee benefit plan is subject to certain
additional considerations because persons with discretionary control of assets
of such plans (a "fiduciary") are subject to the fiduciary responsibility
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and transactions are subject to restrictions imposed by Section 4975
of the Code. As used in this prospectus, the term "employee benefit plan"
includes, but is not limited to, qualified pension, profit-sharing and stock
bonus plans, Keogh plans, Simplified Employee Pension Plans, and tax deferred
annuities or Individual Retirement Accounts ("IRAs") established or maintained
by an employer or employee organization. Among

other things, consideration should be given to (1) whether such investment is
prudent under Section 404(a)(1)(B) of ERISA, (2) whether in making such
investment such plan will satisfy the diversification requirement of Section
404(a)(1)(C) of ERISA, and (3) whether such investment will result in
recognition of unrelated business taxable income by such plan. Please read
"Material Tax Consequences -- Tax-Exempt Organizations and Other Investors."
Fiduciaries should determine whether an investment in Genesis is authorized by
the appropriate governing instrument and is an appropriate investment for such
plan.

In addition, a fiduciary of an employee benefit plan should consider
whether such plan will, by investing in Genesis, be deemed to own an undivided
interest in the assets of Genesis, with the result that the general partner
would also be a fiduciary of such plan and Genesis would be subject to the
regulatory restrictions of ERISA, including its prohibited transaction rules, as
well as the prohibited transaction rules of the Code.

Section 406 of ERISA and Section 4975 of the Code (which also applies to
IRAs that are not considered part of an employee benefit plan; i.e., IRAs
established or maintained by individuals rather than an employer or employee
organization) prohibit an employee benefit plan from engaging in certain
transactions involving "plan assets" with parties who are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to the plan.
Under Department of Labor regulations the assets of an entity in which employee
benefit plans acquire equity interests would not be deemed "plan assets" if,
among other things, (1) the equity interests acquired by employee benefit plans
are publicly offered securities -- i.e., the equity interests are widely held by
100 or more investors independent of the issuer and each other, freely
transferable and registered pursuant to certain provisions of the federal
securities law, (2) the entity is an "operating company" -- i.e., it is
primarily engaged in the production or sale of a product or service other than
the investment of capital, or (3) there is no significant investment by benefit
plan investors, which is defined to mean that less than 25% of the value of each
class of equity interest is held by the employee benefit plans referred to
above, IRAs and other employee benefit plans not subject to ERISA (such as
government plans). Genesis' assets are not expected to be considered "plan
assets" under these regulations because it is expected that the investment will
satisfy the requirements in (1) above, and may also satisfy the requirements in
(2) and (3).

PLAN OF DISTRIBUTION

We may sell the equity securities directly, through agents, or to or
through underwriters or dealers. The prospectus supplement relating to any
particular offering will contain the terms of the equity securities sold in that
offering, including:

[ ] the names of any underwriters, dealers or agents (if any);

[ ] the offering price;

[ ] underwriting discounts;

[ ] sales agents' commissions;

[ ] other forms of underwriter or agent compensation;

[ ] discounts, concessions or commissions that underwriters may pass on to
other dealers; and

[ ] any exchange on which the equity securities are listed.

We may change the offering price, underwriting discounts or concessions, or
the price to dealers when necessary. Discounts or commissions received by
underwriters or agents and any profits on the resale of equity securities by
them may constitute underwriting discounts and commissions under the Securities
Act of 1933, as amended.

Unless we state otherwise in a prospectus supplement, underwriters will
need to meet certain requirements before purchasing equity securities. Agents
will act on a "best efforts" basis during their appointment. We will also state
the net proceeds from the sale in a prospectus supplement.

Any brokers or dealers that participate in the distribution of the equity
securities may be "underwriters" within the meaning of the Securities Act for
such sales. Profits, commissions, discounts or concessions received by such
broker or dealer may be underwriting discounts and commissions under the
Securities Act.

When necessary, we may fix equity securities distribution using changeable,
fixed prices, market prices at the time of sale, prices related to market
prices, or negotiated prices.

We may, through agreements, indemnify underwriters, dealers or agents that
participate in the distribution of the equity securities against certain
liabilities including liabilities under the Securities Act. We may also provide
funds for payments that the underwriters, dealers or agents may be required to
make. Underwriters, dealers and agents, and their affiliates may transact with
us and our affiliates in the ordinary course of their business.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and other reports and other information with the
Commission. You may read and copy documents we file at the Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the Commission at 1-800-SEC-0330 for information on the public reference room.
You can also find our filings at the Commission's website at http://www.sec.gov
and on our website at http://www.genesiscrudeoil.com. Information contained on
our website is not part of this prospectus. In addition, our reports and other
information concerning us can be inspected at the American Stock Exchange, 86
Trinity Place, New York, New York 10006.

The Commission allows us to "incorporate by reference" the information we
have filed with the Commission, which means that we can disclose important
information to you without actually including the specific information in this
prospectus by referring you to those documents. The information incorporated by
reference is an important part of this prospectus and later information that we
file with the Commission will automatically update and supersede this
information. Therefore, before you decide to invest in a particular offering
under this shelf registration, you should always check for reports we may have
filed with the Commission after the date of this prospectus. We incorporate by
reference the documents listed below and any future filings we make with the
Commission under Sections 13(a), 13(c), 14, or 15(d) of the Securities

Exchange Act of 1934 which is deemed "filed" with the Commission until we sell
all of the equity securities offered by this prospectus, other than information
under Item 9 or 12 of any Current Report on Form 8-K that is listed below or
information furnished under Items 2.02 or 7.01 of any Form 8-K that is listed
below or filed in the future, which information is not deemed filed under the
Securities Exchange Act of 1934 and is not incorporated in this prospectus:

[ ] Annual Reports on Form 10-K and Form 10-K/A for the fiscal year ended
December 31, 2004;

[ ] Quarterly Reports on Form 10-Q for the three month periods ended March
31, 2005 and June 30, 2005;

[ ] Current Reports on Form 8-K filed January 19, 2005, February 7, 2005,
March 9, 2005, April 7, 2005, May 4, 2005, June 6, 2005, June 15,
2005, July 26, 2005 and August 4, 2005, and on Form 8-K/A filed June
16, 2005; and

[ ] The description of the common units contained in our Registration
Statement on Form 8-A, dated January 30, 2001.

We will provide without charge to each person, including any beneficial owner,
to whom this prospectus is delivered, upon written or oral request, a copy of
any document incorporated by reference in this prospectus, other than exhibits
to any such document not specifically described above. Requests for such
documents should be directed to:
Investor Relations
Genesis Energy, L.P.
500 Dallas, Suite 2500
Houston, Texas 77002
(713) 860-2500 or
(800) 284-3365

We intend to furnish or make available to our unitholders within 90 days
(or such shorter period as the Commission may prescribe) following the close of
our fiscal year end annual reports containing audited financial statements
prepared in accordance with generally accepted accounting principles and furnish
or make available within 45 days (or such shorter period as the Commission may
prescribe) following the close of each fiscal quarter quarterly reports
containing unaudited interim financial information, including the information
required by Form 10-Q for the first three fiscal quarters of each of our fiscal
years. Our annual report will include a description of any transactions with our
general partner or its affiliates, and of fees, commissions, compensation and
other benefits paid, or accrued to our general partner or its affiliates for the
fiscal year completed, including the amount paid or accrued to each recipient
and the services performed.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated in this prospectus by
reference include forward-looking statements. These forward-looking statements
are identified as any statement that does not relate strictly to historical or
current facts. They use words such as "anticipate," "believe," "continue,"
"estimate," "expect," "forecast," "intend," "may," "plan," "position,"
"projection," "strategy" or "will" or the negative of those terms or other
variations of them or by comparable terminology. In particular, statements,
expressed or implied, concerning future actions, conditions or events or future
operating results or the ability to generate sales, income or cash flow are
forward-looking statements. Forward-looking statements are not guarantees of
performance. They involve risks, uncertainties and assumptions. Future actions,
conditions or events and future results of operations may differ materially from
those expressed in these forward-looking statements. Many of the factors that
will determine these results are beyond our ability or the ability of our
affiliates to control or predict. Specific factors that could cause actual
results to differ from those in the forward-looking statements include:

[ ] demand for, the supply of, changes in forecast data for, and price
trends related to crude oil, liquid petroleum, natural gas and natural
gas liquids or "NGLs" in the United States, all of which may be

affected by economic activity, capital expenditures by energy
producers, weather, alternative energy sources, international events,
conservation and technological advances;

[ ] throughput levels and rates;

[ ] changes in, or challenges to, our tariff rates;

[ ] our ability to successfully identify and consummate strategic
acquisitions, make cost saving changes in operations and integrate
acquired assets or businesses into our existing operations;

[ ] service interruptions in our liquids transportation systems, natural
gas transportation systems or natural gas gathering and processing
operations;

[ ] shut-downs or cutbacks at refineries, petrochemical plants, utilities
or other businesses for which we transport crude oil, natural gas or
other products or to whom we sell such products;

[ ] changes in laws or regulations to which we are subject;

[ ] our inability to borrow or otherwise access funds needed for
operations, expansions or capital expenditures as a result of existing
debt agreements that contain restrictive financial covenants;

[ ] loss of key personnel;

[ ] the effects of competition, in particular, by other pipeline systems;

[ ] hazards and operating risks that may not be covered fully by
insurance;

[ ] the condition of the capital markets in the United States;

[ ] the political and economic stability of the oil producing nations of
the world; and

[ ] general economic conditions, including rates of inflation and interest
rates.

You should not put undue reliance on any forward-looking statements. When
considering forward-looking statements, please review the risk factors described
under "Risk Factors" beginning on page 2 of this prospectus.

LEGAL MATTERS

Akin Gump Strauss Hauer & Feld LLP, as our counsel, will issue an opinion
for us about the legality of the equity securities and the material federal
income tax considerations regarding the common units. Any underwriter will be
advised about other issues relating to any offering by its own legal counsel.

EXPERTS

The financial statements of T&P Syngas Supply Company as of and for the
years ended December 31, 2004 and 2003, incorporated in this prospectus by
reference have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing in the Current Report on Form 8-K/A of Genesis
Energy, L.P. filed on June 16, 2005, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.

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3,400,000 COMMON UNITS

(GENESIS LOGO)

GENESIS ENERGY, L.P.

REPRESENTING
LIMITED PARTNER INTERESTS

---------------------

PROSPECTUS SUPPLEMENT

, 2005

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A.G. EDWARDS
RBC CAPITAL MARKETS

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