Our Competitive Strengths

Our primary business strategies are to generate stable cash flows, increase our pipeline and terminal throughput, pursue strategic and accretive acquisitions that complement our existing asset base, improve operating efficiencies, and reduce our costs. We believe we are well positioned to execute these strategies using the following strengths:

• Unique strategic relationship with Sunoco, Inc. Our refined product and crude oil pipelines and terminals are directly linked to Sunoco, Inc.'s refineries and afford Sunoco, Inc. cost-effective means to access crude oil and distribute refined products. On certain pipelines, terminalling, and storage facilities, Sunoco Logistics has entered into five to seven year contracts terminating in 2007-2009,
• Strategically located and efficient pipelines and terminals. We have a strong presence in the Northeast and Midwest U.S., and our transportation and distribution assets in these regions operate at high utilization rates. We have assets that are positioned to benefit from increases in U.S. crude imports, Canadian oil production, and activity from the Strategic Petroleum Reserve. We continually make investments to upgrade our asset base. Our refined product pipelines and many of our crude oil pipelines and our terminals are automated to provide continuous, real-time operational data.
• Complementary portfolio of assets. Our assets include refined product pipelines and terminals in the Northeast and Midwest U.S. and a crude oil terminal and pipelines in Texas, Oklahoma, and the Gulf Coast area.
• Experienced management. Our management team is comprised of individuals with extensive experience in the energy industry, and includes some of the most senior officers of Sunoco, Inc. As a result, we believe we have the expertise to execute our business strategies.
• Financial flexibility. We have a $300 million credit facility that is available for acquisitions, payments, or distributions, working capital, and other uses. We have additional financing flexibility through access to public equity and debt capital markets. We have, a BBB(stable)/Baa2(stable) investment grade rating from Standard & Poors and Moody's, respectively.