Edgar Filing: Buckeye GP Holdings L.P.

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Filed Pursuant to Rule 424(b)(4)
Reg. No. 333-133433

10,500,000 Common Units
Representing Limited Partner Interests

Buckeye GP Holdings L.P.

We are offering 10,500,000 common units, which represent limited partner interests in Buckeye GP Holdings L.P. This is the initial public offering of our common units. We own and control Buckeye GP LLC, which is the general partner of Buckeye Partners, L.P., a publicly traded Delaware limited partnership that owns and operates one of the largest independent petroleum products pipeline systems in the United States. Our primary cash-generating assets are our general partner interests in Buckeye Partners, L.P. and its operating subsidiaries, including the right to receive incentive distributions based upon the amount of quarterly distributions to the limited partners of Buckeye Partners, L.P.

Prior to this offering, there has been no public market for our common units. We have been authorized to list our common units on the New York Stock Exchange under the symbol "BGH."

See "Risk Factors" on page 18 to read about risk factors you should consider before buying the common units.

These risks include the following:

•: Our primary cash-generating assets are our general partner interests in Buckeye Partners, L.P. and its operating subsidiaries, which consist primarily of GP units and the incentive distribution rights in Buckeye Partners, L.P. Our cash flow is, therefore, directly dependent upon the ability of Buckeye Partners, L.P. to make cash distributions to its partners.
•: Our current equity owners own a controlling interest in us and own our general partner and can determine the outcome of all matters voted upon by our unitholders.
•: You will experience immediate and substantial dilution of $16.31 per common unit in the net tangible book value of your common units.
•: The fiduciary duties of our general partner may conflict with the fiduciary duties of Buckeye GP LLC, which is the general partner of Buckeye Partners, L.P.
•: If we or Buckeye Partners, L.P. were treated as a corporation for federal income tax purposes, or if we or Buckeye Partners, L.P. were to become subject to entity-level taxation for state tax purposes, then our cash available for distribution to you would be substantially reduced.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Common Unit		Total
Initial public offering price	$	17.0000	$	178,500,000
Underwriting discount	$	0.8713	$	9,148,650
Proceeds, before expenses, to Buckeye GP Holdings L.P.	$	16.1287	$	169,351,350

To the extent that the underwriters sell more than 10,500,000 common units, the underwriters have the option to purchase up to an additional 1,575,000 common units from Buckeye GP Holdings L.P. at the initial public offering price less the underwriting discount.

The underwriters expect to deliver the common units against payment in New York, New York on August 9, 2006.

Goldman, Sachs & Co.

Citigroup

Merrill Lynch & Co.

UBS Investment Bank

Prospectus dated August 3, 2006.

TABLE OF CONTENTS

SUMMARY		1
	Buckeye GP Holdings L.P.	1
	Recent Developments	2
	Our Strengths and Strategies	3
	Our Interest in Buckeye	4
	The Offering	7
	Summary of Risk Factors	9
	Formation Transactions	10
	Our Structure and Management	11
	Buckeye Partners, L.P.	13
	Summary of Conflicts of Interest and Fiduciary Responsibilities	15
	Summary Historical Consolidated Financial Data	16
RISK FACTORS		18
	Risks Inherent in Our Dependence on Distributions from Buckeye	18
	Risks Inherent in Buckeye's Business	20
	Risks Inherent in an Investment in Us	25
	Risks Related to Conflicts of Interest	30
	Tax Risks to Our Common Unitholders	33
USE OF PROCEEDS		37
CAPITALIZATION		38
DILUTION		40
OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS		41
	General	41
	Our Initial Quarterly Distribution	43
	Estimated Minimum Consolidated Adjusted EBITDA	46
	Assumptions and Considerations	51
	Unaudited Pro Forma Consolidated Available Cash	53
HOW WE MAKE CASH DISTRIBUTIONS		58
	General	58
	Definition of Available Cash	58
	Units Eligible for Distributions	58
	General Partner Interest	58
	Adjustments to Capital Accounts	58
	Distributions of Cash upon Liquidation	59
	Distributions of Amounts Related to Pre-Closing Periods	59
	Our Sources of Distributable Cash	59
SELECTED FINANCIAL DATA		62

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		64
	Introduction	64
	Overview of Buckeye	64
	Results of Our Operations	66
	Consolidated Financial Results for the Year Ended December 31, 2004	66
	Results of Operations	67
	First Quarter 2006 Compared to First Quarter 2005	68
	2005 Compared to 2004	72
	2004 Compared to 2003	75
	Liquidity and Capital Resources	78
	Buckeye's Employee Stock Ownership Plan	94
	Critical Accounting Policies and Estimates	94
	Related Party Transactions	95
	Recent Accounting Pronouncements	96
	Quantitative and Qualitative Disclosures About Market Risk	97
BUSINESS		99
	Buckeye GP Holdings L.P.	99
	Our Interest in Buckeye	100
	Buckeye Partners, L.P.	103
	Buckeye's Business Strategy	104
	Buckeye's Business Activities	104
	Employees	108
	Government Regulation	108
	Title to Properties	113
	Litigation	114
MANAGEMENT		115
	Executive Officer Compensation	118
	Long-Term Incentive Plan	119
	Management Units	121
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		122
	Buckeye GP Holdings L.P.	122
	Buckeye Partners, L.P.	123
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		124
	Our Relationship with Buckeye and its General Partner, Buckeye GP LLC	124
	Our Relationship with Buckeye's General Partner	124
	Pre-Closing General Partner Interest Restructuring	125
	Indemnification of Directors and Officers	125
	Related Party Transactions Involving Buckeye	125
	Related Party Transaction Involving Carlyle/Riverstone	126
	Cash Bonuses Payable in Connection With Successful Closing of this Offering	126
	Material Provisions of Our General Partner's Limited Liability Company Agreement	126
CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITIES		127
	Conflicts of Interest	127
	Fiduciary Duties	129

DESCRIPTION OF OUR COMMON UNITS		133
	Common Units	133
	Transfer Agent and Registrar	133
	Transfer of Common Units	133
	Management Units	134
	Comparison of Rights of Holders of Buckeye's LP Units and Our Common Units	134
MATERIAL PROVISIONS OF THE PARTNERSHIP AGREEMENT OF BUCKEYE GP HOLDINGS L.P.		139
	Organization and Duration	139
	Purpose	139
	Power of Attorney	139
	Capital Contributions	139
	Limited Liability	140
	Voting Rights	140
	Issuance of Additional Securities	141
	Amendments to Our Partnership Agreement	142
	Merger, Sale or Other Disposition of Assets	144
	Termination and Dissolution	144
	Liquidation and Distribution of Proceeds	144
	Withdrawal or Removal of the General Partner	145
	Transfer of General Partner Interests	145
	Change of Management Provisions	146
	Unitholder Rights Plan	146
	Call Right	146
	Meetings; Voting	147
	Status as Limited Partner	148
	Non-Citizen Assignees; Redemption	148
	Non-Taxpaying Assignees; Redemption	148
	Indemnification	149
	Books and Reports	149
	Right to Inspect Our Books and Records	150
	Registration Rights	150
MATERIAL PROVISIONS OF THE PARTNERSHIP AGREEMENT OF BUCKEYE PARTNERS, L.P.		151
	Organization and Duration	151
	Purpose	151
	Power of Attorney	151
	Cash Distribution Policy	151
	Distributions of Cash Upon Liquidation	152
	Issuance of Additional Securities	152
	Amendment of the Buckeye Partnership Agreement	153
	Merger, Sale or Other Disposition of Assets	154
	Termination and Dissolution	154
	Liquidation and Distribution of Proceeds	155
	Withdrawal or Removal of the General Partner	155
	Transfer of Buckeye's General Partner Interests and Assignment of Incentive Compensation Agreement	156
	Call Right	156
	Indemnification	156
UNITS ELIGIBLE FOR FUTURE SALE		158

iii

MATERIAL TAX CONSEQUENCES		159
	Partnership Status	159
	Limited Partner Status	161
	Tax Consequences of Unit Ownership	161
	Tax Treatment of Operations	167
	Disposition of Units	168
	Uniformity of Units	170
	Tax-Exempt Organizations and Other Investors	171
	Administrative Matters	171
	State, Local, Foreign and Other Tax Considerations	174
INVESTMENT IN US BY EMPLOYEE BENEFIT PLANS		174
UNDERWRITING		176
LEGAL MATTERS		180
EXPERTS		180
WHERE YOU CAN FIND MORE INFORMATION		181
FORWARD-LOOKING STATEMENTS		181
INDEX TO FINANCIAL STATEMENTS		F-1

You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with additional or different information from that contained or incorporated by reference in this prospectus. If anyone provides you with additional, 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. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only.

SUMMARY

This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the historical consolidated financial statements and pro forma financial statements and the notes to those financial statements, and the other documents to which we refer for a more complete understanding of this offering. Furthermore, you should carefully read "Summary of Risk Factors" and "Risk Factors" for more information about important factors that you should consider before making a decision to purchase common units in this offering.

All references in this prospectus to "our," "we," "us," and the "Company," when used in a historical context, for the periods after May 4, 2004, refer to MainLine L.P. and its wholly owned subsidiaries, MainLine Sub LLC and Buckeye GP LLC, and for periods prior to May 4, 2004, refer to Glenmoor, Ltd., Buckeye Management Company and Buckeye Pipe Line Company, the predecessors to MainLine Sub LLC and Buckeye GP LLC, and when used in the present tense or prospectively, those terms refer to Buckeye GP Holdings L.P. and its wholly owned subsidiaries after giving effect to the transactions described in "—Formation Transactions." MainLine L.P. is being contributed to Buckeye GP Holdings L.P. in connection with this offering. All references in this prospectus to "Buckeye" refer to Buckeye Partners, L.P. and its operating subsidiaries collectively, or to Buckeye Partners, L.P., individually, as the context may require. All references to our "partnership agreement" refer to the Amended and Restated Agreement of Limited Partnership of Buckeye GP Holdings L.P. to be adopted contemporaneously with the closing of this offering. Unless we indicate otherwise, the information presented in this prospectus assumes that the underwriters do not exercise their over-allotment option.

Buckeye GP Holdings L.P.

We own and control Buckeye GP LLC, which is the general partner of Buckeye Partners, L.P. (NYSE symbol: BPL), a publicly traded Delaware limited partnership. Our primary cash-generating assets are our general partner interests in Buckeye, which consist of (i) general partner units, or GP units, in Buckeye, (ii) the incentive distribution rights in Buckeye, and (iii) approximate one percent general partner interests in Buckeye's subsidiary operating partnerships. The incentive distribution rights entitle us to receive incentive distributions based upon the amount of quarterly cash distributions that Buckeye pays to its limited partners. As the amount of cash distributions paid by Buckeye to its limited partners meets certain target distribution levels, we receive payments equal to an increasing percentage of such cash distributions. Buckeye's most recent quarterly cash distribution was in excess of the highest distribution level. Based upon Buckeye's quarterly distribution of $0.75 per Buckeye limited partner unit, or LP unit, we will pay an initial quarterly cash distribution of $0.205 per common unit, or $0.82 per unit on an annualized basis, to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses.

end-use markets. These pipelines also transport other products, such as propane and butane, refinery feedstocks and blending components. Buckeye's transportation services are typically provided on a common-carrier basis under published tariffs. Buckeye's geographical diversity, connections to multiple sources of supply and extensive delivery system help create a stable business. Buckeye is an independent transportation provider that is not affiliated with any oil company or marketer of petroleum products and generally does not own the petroleum products that it transports.

Recent Developments

Buckeye's Second Quarter 2006 Unaudited Financial and Operating Results

On July 24, 2006 Buckeye reported its financial and operating results for the second quarter of 2006. Buckeye's revenue in the second quarter of 2006 increased to $111.5 million from revenue of $101.9 million in the second quarter of 2005. Buckeye's operating income increased 8.8 percent in the second quarter of 2006 to $43.1 million from $39.6 million in the second quarter of 2005. Buckeye's second quarter 2006 net income decreased to $24.2 million from net income of $24.4 million in the second quarter of 2005.

Pipeline volumes in the second quarter of 2006 were 1,441,300 barrels per day, a 3.9 percent increase from pipeline volumes of 1,386,900 barrels per day in the second quarter of 2005. Costs and expenses in the second quarter of 2006 increased to $68.4 million from $62.3 million in the second quarter of 2005. All of the foregoing financial results reflect Buckeye's acquisition in May 2005 of certain pipelines and terminals from affiliates of ExxonMobil and the acquisition of the Wattenberg NGL pipeline system from BP Pipelines in January 2006.

Buckeye's financial and operating results do not reflect the consolidating adjustments included in our financial statements. As a result, while our financial statements are substantially similar to Buckeye's, with the exception of revenue and pipeline volumes, its financial and operating results are not directly comparable to our financial statements and results of operations contained elsewhere in this prospectus. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Our Operations" for a description of such differences.

Buckeye Increases Quarterly Distribution

On July 24, 2006 the board of directors of Buckeye GP LLC declared a regular partnership cash distribution for the quarter ended June 30, 2006 of $0.7625 per LP unit payable on August 31, 2006, to the Buckeye LP unitholders of record on August 4, 2006. This cash distribution represents a quarterly increase in the quarterly distribution of $0.0125 per LP unit to an indicated annual cash distribution level of $3.05 per LP unit. This will be the 78^th consecutive quarterly cash distribution paid by Buckeye and the 9^th consecutive increase in the quarterly cash distribution.

Based upon this distribution of $0.7625 per LP unit and the number of Buckeye LP units outstanding at July 24, 2006, we expect to receive a quarterly cash distribution of approximately $6.9 million (or approximately $27.6 million on an annualized basis), consisting of $0.5 million ($1.9 million annualized) from our GP units and approximate 1% general partner interest in Buckeye's subsidiary operating partnerships, $6.4 million ($25.5 million annualized) from the incentive distribution rights and $61,000 ($0.2 million annualized) from the 80,000 LP units that we own. This distribution will be approximately $212,500 (approximately $850,000 on an annualized basis) higher than the approximately $6.7 million (approximately $26.8 million on an annualized basis) we received from Buckeye in respect of the first quarter of 2006.

Our Strengths and Strategies

Our primary cash-generating assets are our general partner interests in Buckeye, which consist primarily of GP units and the incentive distribution rights in Buckeye. Our cash flow is, therefore, directly dependent upon the ability of Buckeye to make cash distributions to its partners. Our primary objective is to increase our cash available for distribution to our unitholders by actively assisting Buckeye in executing its business strategy. We intend to support Buckeye in the implementation of its business strategy by assisting Buckeye in identifying, evaluating and pursuing growth opportunities.

We believe the following competitive strengths of Buckeye position us, through our ownership of the general partner of Buckeye, to execute successfully our business strategy:

•: Strategic location of Buckeye's assets. Buckeye's petroleum products pipeline systems and its terminal and storage facilities are strategically located, allowing Buckeye to promote high levels of overall throughput and incrementally increase pipeline and terminal volumes on its system. Buckeye's assets are primarily located in the northeast and upper midwest areas of the United States, which have historically experienced demand for refined products in excess of local supply. The strategic location of its assets enables Buckeye to take advantage of domestic imbalances and international imports of petroleum products.
•: Cash flow stability due to the fee-based nature of Buckeye's business. Buckeye provides pipeline transportation services at posted tariffs, storage services for a fee and pipeline operation and maintenance services pursuant to contracts. In addition, because Buckeye generally does not take title to the products it transports, it has limited direct exposure to volatile commodity prices.
•: Unique market-based tariff. Buckeye Pipe Line Company L.P., Buckeye's largest operating subsidiary, has a market-based tariff program, approved by the Federal Energy Regulatory Commission, or FERC, providing Buckeye with more flexibility in its tariff pricing than is available under the producer price index pricing formula, which is used by most petroleum products pipelines.
•: Flexible sources of supply. Buckeye's pipeline system is connected to various refineries, third-party pipelines and import marine terminals, which provide flexibility in sourcing throughput. These connections, together with its strong customer relationships, enable Buckeye to maintain stable pipeline throughput.
•: Extensive industry experience. Buckeye has been in the pipeline business for over 100 years. Its senior management and operating personnel have extensive experience in all facets of Buckeye's operations. In addition, Buckeye's affiliation, through us, with Riverstone Holdings, LLC and The Carlyle Group, two leading private equity firms, provides additional management expertise and increased exposure to acquisition opportunities.

Buckeye's primary objective is to increase the value of its limited and general partner interests by consistently increasing its cash flow and, accordingly, its cash available for distributions to its partners. Buckeye's business strategy to accomplish this objective is to:

•: own and operate high-quality logistics assets;
•: increase throughput on those of its pipelines and terminals where it has available capacity;
•: expand its existing pipelines and terminals to facilitate customer-generated growth;
•: maintain and enhance the integrity of its pipelines and terminals;

•: focus on customer service in order to remain the provider of choice in the markets it serves; and
•: pursue selective strategic acquisition opportunities that complement its existing asset base or provide entry into new markets.

Our Interest in Buckeye

Our cash flows consist of distributions from Buckeye on the Buckeye general partner interests we own, which consist of the following:

•

243,914 GP units in Buckeye (representing approximately 0.6% of Buckeye's outstanding units);

•

the incentive distribution rights in Buckeye described below; and

•

approximately a 1% general partner interest through MainLine L.P., or MainLine, in each of the following Buckeye subsidiaries:

•: Buckeye Pipe Line Company, L.P. (or Buckeye Pipe Line)
•: Laurel Pipe Line Company, L.P. (or Laurel)
•: Everglades Pipe Line Company, L.P. (or Everglades)
•: Buckeye Pipe Line Holdings, L.P. (or BPH).

We also own 80,000 Buckeye LP units, representing a de minimis limited partner interest in Buckeye.

Buckeye has historically distributed all of its cash on hand within 60 days of the end of each quarter, less reserves established by its general partner to provide for the proper conduct of Buckeye's business or to provide funds for future distributions.

Since its initial public offering in 1986, as adjusted for LP unit splits, Buckeye has increased its quarterly distribution by approximately 173%, from $0.275 per LP unit, or $1.10 on an annualized basis, to a current level of $0.75 per LP unit, or $3.00 per LP unit on an annualized basis. Based upon Buckeye's quarterly distribution of $0.75 per LP unit, paid with respect to the first quarter of 2006, and the number of Buckeye LP units outstanding at March 31, 2006, we would receive a quarterly cash distribution of approximately $6.7 million (or approximately $26.8 million on an annualized basis), consisting of $0.5 million ($1.9 million annualized) from our GP units and approximate 1% general partner interest in Buckeye's subsidiary operating partnerships, $6.2 million ($24.7 million annualized) from the incentive distribution rights and $60,000 ($0.2 million annualized) from the 80,000 LP units that we own. This quarterly incentive distribution payment represents 17.0% of the aggregate quarterly cash distribution paid by Buckeye.

Our incentive distribution rights entitle us to receive amounts equal to specified percentages of the incremental amount of cash distributed by Buckeye to each of its LP units when target distribution levels for each quarter are exceeded. 2,573,146 LP units originally issued to Buckeye's Employee Stock Ownership Plan are excluded for the purpose of calculating incentive distributions. The target distribution levels begin at $0.325 and increase in steps to the highest target distribution level of $0.525 per eligible LP unit. When Buckeye makes quarterly distributions above this level, the incentive distributions include an amount equal to 45% of the incremental cash distributed to each eligible LP unit for the quarter, or approximately 29.5% of total incremental cash distributed by Buckeye above $0.525. Given the current level of quarterly distributions to Buckeye's LP units, the incentive distribution rights already participate at the 45% level. The following table illustrates the

percentage allocations of distributions among the owners of Buckeye, including us, at the target distribution levels.

		Distributions to Us as a Percentage of Total Distributions(2)
Buckeye Quarterly Distribution Per LP Unit	Distributions to Owners of LP Units as a Percentage of Total Distributions(1)	GP Units	Incentive Distributions
up to $0.325	99.4%	0.6%	0.0%
above $0.325 up to $0.350	87.2%	0.5%	12.1%
above $0.350 up to $0.375	80.7%	0.5%	18.8%
above $0.375 up to $0.400	77.7%	0.5%	21.8%
above $0.400 up to $0.425	75.0%	0.5%	24.5%
above $0.425 up to $0.525	72.5%	0.4%	27.1%
above $0.525	70.1%	0.4%	29.5%

(1): Includes distributions made with respect to 80,000 LP units owned by us.
(2): Excludes distributions made with respect to 80,000 LP units owned by us.

The table above excludes distributions made by Buckeye's subsidiary operating partnerships with respect to our approximate 1% general partner interests in such subsidiaries. For more information on how our incentive distributions are calculated, please read "How We Make Cash Distributions—Our Sources of Distributable Cash and Incentive Distribution Rights."

The following graph shows the total cash distributed to us as a result of our ownership of the general partner interests in Buckeye, including the incentive distribution rights, across a range of hypothetical annualized distributions made by Buckeye. The graph illustrates the impact to us of Buckeye raising or lowering its quarterly cash distribution from the most recently paid distribution of $0.75 per LP unit ($3.00 on an annualized basis), which was paid on May 31, 2006 in respect of the quarter ended March 31, 2006. This information assumes:

•: Buckeye Partners has approximately 39.4 million LP units outstanding (including approximately 2.6 million which are not eligible for calculating incentive distributions); and
•: our continued ownership of 80,000 Buckeye LP units.

This information is presented for illustrative purposes only and is not intended to be a prediction of future performance. The graph below excludes distributions made by Buckeye's subsidiary operating partnerships with respect to our approximate 1% general partner interests in

such subsidiaries. In respect of the quarter ended March 31, 2006, such distributions amounted to $0.3 million.

The impact to us of changes in Buckeye's cash distribution levels will vary depending on several factors, including the number of Buckeye's outstanding LP units on the record date for cash distributions and the impact of the incentive distribution rights structure. In addition, the level of cash distributions we receive may be affected by the various risks associated with an investment in us, including risks associated with the underlying business of Buckeye. Please read "Risk Factors."

We will pay an initial quarterly cash distribution of $0.205 per common unit, or $0.82 per unit on an annualized basis, to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including reimbursement of expenses of our general partner. If Buckeye is successful in implementing its business strategy and increasing distributions to its partners, we generally would expect to increase distributions to our unitholders, although the timing and amount of any such increase in our distributions will not necessarily be comparable to any increase in Buckeye's distributions. In November 2006, we will pay a distribution equal to the initial quarterly distribution prorated for the portion of the quarter ending September 30, 2006 that we are a publicly traded partnership. However, we cannot assure you that any distributions will be declared or paid. Please read "Our Cash Distribution Policy and Restrictions on Distributions" and "How We Make Cash Distributions."

The Offering

Common units offered		10,500,000 common units.
		12,075,000 common units if the underwriters exercise their over-allotment option in full.
Common units outstanding after this offering		28,300,000 common units (on a fully diluted basis assuming conversion of all outstanding management units, which are convertible into common units on a one-for-one basis).
Use of proceeds		We expect to receive net proceeds of approximately $167.4 million from the sale of the common units, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will use the net proceeds from this offering, together with cash on hand of approximately $11 million, to repay all outstanding indebtedness under MainLine's term loan and to make distributions to our current equity owners. If the underwriters exercise all or any portion of their over-allotment option, we will use all of the net proceeds from the sale of our common units sold pursuant to the exercise of that option to fund the redemption of an equal number of units from our current equity owners. Please read "Use of Proceeds."
Cash Distributions		We will make an initial quarterly cash distribution of $0.205 per common and management unit to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses, including payments to our general partner. We estimate that our pro forma available cash for the year ended December 31, 2005 and the twelve months ended March 31, 2006 would have been sufficient to pay 74.3% and 69.9%, respectively, of the full initial distribution amount on our units during these periods. Please read "Our Cash Distribution Policy and Restrictions on Distributions."
		We will pay you a prorated distribution for the first quarter that we are a publicly traded partnership. This distribution will be paid for the period beginning on the closing date of this offering and ending on the last day of that fiscal quarter. Therefore, we will pay you a distribution for the period from the closing date of this offering to and including September 30, 2006. We expect to pay this cash distribution in November 2006. However, we cannot assure you that we will declare or pay any distributions.

Limited voting rights		Our general partner manages and operates us. Unlike the holders of common stock in a corporation, you will have only limited voting rights on matters affecting our business. You will have no right to elect our general partner or its directors on an annual or other continuing basis. Our general partner may not be removed except by a vote of the holders of at least 80% of the outstanding units, including any units owned by our affiliates, voting together as a single class. Our current equity owners, including certain officers of our general partner, initially will own an aggregate of 62.9% of our units. This will give our current equity owners the ability to prevent our general partner's involuntary removal. Please read "Material Provisions of Partnership Agreement of Buckeye GP Holdings L.P.—Withdrawal or Removal of the General Partner."
Call right		If at any time our affiliates own more than 90% of the outstanding common units, our general partner has the right, but not the obligation, to purchase all of the remaining common units at a price equal to the greater of (x) the average of the daily closing prices of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (y) the highest price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. At the completion of this offering, our current equity owners, including certain officers of our general partner, will own 62.9% of our units.
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 distributions for the period ending December 31, 2008, you will be allocated, on a cumulative basis, an amount of federal taxable income for that period that will be less than 10% of the cash distributed to you with respect to that cumulative period. For the basis of this estimate, please read "Material Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions."
Exchange listing		We have been authorized to list our common units on the New York Stock Exchange under the symbol "BGH."

Summary of Risk Factors

An investment in our common units involves risks. For more information about these risks, please read "Risk Factors." You should consider carefully these risk factors together with all of the other information included in this prospectus before you invest in our common units.

Risks Inherent in Our Dependence on Distributions from Buckeye

•: Our primary cash-generating assets are our general partner interests in Buckeye, which consist primarily of GP units and the incentive distribution rights in Buckeye. Our cash flow is, therefore, directly dependent upon the ability of Buckeye to make cash distributions to its partners.
•: A reduction in Buckeye's distributions will disproportionately affect the amount of cash distributions to which we are currently entitled.

Risks Inherent in an Investment in Us

•: Increases in interest rates may cause the market price of our common units to decline.
•: The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public market, including sales by our current equity owners.
•: Our current equity owners own a controlling interest in us and own our general partner and can determine the outcome of all matters voted upon by our unitholders.
•: You will experience immediate and substantial dilution of $16.31 per common unit in the net tangible book value of your common units.

Risks Inherent in Buckeye's Business

•: Changes in petroleum demand and distribution may adversely affect Buckeye's business.
•: Certain of Buckeye's pipeline operations charge tariff rates which are subject to regulation and change by FERC.
•: Environmental regulation may impose significant costs and liabilities on Buckeye.
•: Existing or future state or federal government regulations relating to certain chemicals or additives in gasoline or diesel fuel could require capital expenditures or result in lower pipeline volumes and thereby adversely affect Buckeye's results of operations, thereby reducing Buckeye's ability to make distributions to unitholders, including us.
•: Buckeye's operations are subject to operational hazards and unforeseen interruptions for which Buckeye may not be adequately insured.
•: Buckeye may incur liabilities related to assets Buckeye has acquired. These costs and liabilities may not be covered by indemnification rights that Buckeye may have against the sellers of the assets.
•: A decline in production at the ConocoPhillips Wood River refinery could materially reduce the volume of refined petroleum products Buckeye transports.
•: Potential future acquisitions and expansions, if any, may affect Buckeye's business by substantially increasing the level of Buckeye's indebtedness and contingent liabilities and increasing Buckeye's risks of being unable to effectively integrate these new operations.

Risks Related to Conflicts of Interest

•: Buckeye GP LLC owes fiduciary duties to Buckeye and Buckeye's unitholders, which may conflict with our interests.
•: The fiduciary duties of our general partner may conflict with the fiduciary duties of Buckeye's general partner.
•: Potential conflicts of interest may arise among our general partner, its affiliates and us. Our general partner has limited fiduciary duties to us and our unitholders, which may permit it to favor its own interests to the detriment of us and our unitholders.
•: Our reimbursement of expenses of our general partner will limit our cash available for distribution.

Tax Risks to Our Common Unitholders

•: If we or Buckeye were treated as a corporation for federal income tax purposes, or if we or Buckeye were to become subject to a material amount of entity-level taxation for state tax purposes, then our cash available for distribution to you would be substantially reduced.
•: If the IRS contests the federal income tax positions that we or Buckeye take, it may adversely affect the market for our common units or Buckeye LP units, and the costs of any contest will reduce cash available for distribution to our unitholders.
•: You may be required to pay taxes on your share of our income even if you do not receive any cash distributions from us.
•: Tax gain or loss on disposition of our common units could be more or less than expected.
•: Tax-exempt entities and foreign persons face unique tax issues from owning our common units that may result in adverse tax consequences to them.
•: We will treat each purchaser of our common units as having the same tax benefits without regard to the common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.
•: The sale or exchange of 50% or more of our capital and profit interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes.
•: Unitholders may be subject to state and local taxes and return filing requirements as a result of investing in our common units.

Formation Transactions

We are a Delaware limited partnership formed in June 2006.

In connection with this offering and our formation:

•: the owners of MainLine will contribute MainLine to us;
•: Buckeye GP LLC will convey to MainLine the approximately 1% general partner interest in Buckeye Pipe Line, Laurel, Everglades and BPH; and
•: we will contribute our interest in MainLine to Buckeye GP LLC.

As a result of these transactions, MainLine, which previously owned Buckeye GP LLC, will be a subsidiary of Buckeye GP LLC, which we will own.

Our Structure and Management

We were formed in June 2006 as a Delaware limited partnership. As of the closing of this offering, we will have 26,938,000 common units and 1,362,000 management units outstanding. The management units will equal approximately 7% of the total number of units owned by our existing equity owners as of the closing of this offering. Each management unit will be entitled to receive quarterly cash distributions in the same amount as the quarterly cash distributions we make on each common unit, and the management units and common units will vote together as a single class. Each management unit will have a zero initial capital account balance and will be convertible into one common unit at the election of the holder of the management unit. For more information on the management units please see "Description of Our Common Units—Management Units." Our general partner owns a non-economic, managing general partner interest in us, which does not entitle it to receive cash distributions. However, our general partner owns 2,830 common units and will receive distributions on these common units in the same manner as other owners of common units. The chart on the following page depicts our organization and ownership structure after giving effect to the completion of this offering and the related transactions and based on the ownership of Buckeye at March 31, 2006.

Ownership of Buckeye GP Holdings L.P. After this Offering:
	Public Unitholders		37.10%
	Our General Partner		0.01%
	Carlyle/Riverstone BPL Holdings II, L.P.		53.72%
	Management and Others		9.17%

		Total	100.00%

Our Management

MainLine Management LLC, our general partner, manages our operations and activities, including, among other things, establishing the quarterly cash distribution levels for our common and management units and reserves it believes prudent to maintain for the proper conduct of our business. Our general partner does not receive any management fees or other compensation from us in connection with its management of our business, but is entitled to reimbursement for all direct and indirect expenses incurred on our behalf and will receive a Senior Administrative Charge, of not less than $975,000 annually, from Buckeye. For a description of the Senior Administrative Charge please see "Certain Relationships and Related Transactions—Our Relationship with Buckeye's General Partner."

We control and manage Buckeye through our ownership of its general partner, Buckeye GP LLC. The officers of our general partner, MainLine Management LLC, are also officers of Buckeye GP LLC. Four of our directors are also directors of Buckeye GP LLC. Our remaining directors will be independent directors under the rules of the New York Stock Exchange. We elect the directors of Buckeye GP LLC. The board of Buckeye GP LLC is responsible for overseeing Buckeye GP LLC's role as the general partner of Buckeye. Please read "Management."

Our principal executive offices are located at 5002 Buckeye Road, Emmaus, Pennsylvania 18049, and our phone number is (484) 232-4000. Our website is located at http://www.buckeyegpholdings.com. Information on our website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.

Buckeye Partners, L.P.

Buckeye is a publicly traded Delaware limited partnership. Buckeye owns and operates one of the largest independent petroleum products pipeline systems in the United States in terms of volumes delivered, with approximately 5,350 miles of pipeline, serving 17 states. Buckeye also operates approximately 2,100 miles of pipeline under agreements with major oil and chemical companies. Further, Buckeye owns and operates 45 active refined petroleum products terminals in Illinois, Indiana, Massachusetts, Michigan, Missouri, New York, Ohio and Pennsylvania with aggregate storage capacity of approximately 17.6 million barrels.

Buckeye's pipelines service approximately 100 delivery locations. Buckeye transports petroleum products including gasoline, turbine fuel, diesel fuel, heating oil and kerosene from major supply sources to terminals and airports located within major end-use markets. Buckeye also transports other products, such as propane and butane, refinery feedstocks and blending components. Buckeye's transportation services are typically provided to its customers on a common-carrier basis under published tariffs. Buckeye's geographical diversity, connections to multiple sources of supply and extensive delivery system help create a stable base business. Buckeye is not affiliated with oil companies or marketers of petroleum products and generally does not own the petroleum products that it transports.

Buckeye currently conducts all of its operations through the following seven subsidiaries, which we refer to as Buckeye's operating subsidiaries:

•: Buckeye Pipe Line owns a 2,643-mile interstate common carrier refined petroleum products pipeline system serving major population centers in eight states. It is the primary turbine fuel provider to John F. Kennedy International Airport, LaGuardia Airport, Newark International Airport and certain other airports within its service territory.
•: Laurel owns a 345-mile intrastate common carrier refined products pipeline connecting five Philadelphia area refineries to 10 delivery points across Pennsylvania.

•: Wood River Pipe Lines LLC, or Wood River, owns six refined petroleum products pipelines with aggregate mileage of approximately 925 miles located in Illinois, Indiana, Missouri and Ohio.
•: Buckeye Pipe Line Transportation LLC, or BPL Transportation, owns a refined petroleum products pipeline system with aggregate mileage of approximately 478 miles located in New Jersey, New York and Pennsylvania.
•: Everglades owns a 37-mile intrastate common carrier refined petroleum products pipeline connecting Port Everglades, Florida to Ft. Lauderdale Hollywood International Airport and Miami International Airport. It is the primary turbine fuel provider to Miami International Airport.
•: Buckeye NGL Pipe Lines LLC, or Buckeye NGL, owns an approximate 350-mile natural gas liquids pipeline extending generally from the Wattenberg, Colorado area to Bushton, Kansas.
•: BPH owns (or in certain instances leases from Buckeye's other subsidiaries) and operates 45 active refined petroleum products terminals with aggregate storage capacity of approximately 17.6 million barrels. BPH also owns interests in 535 miles of pipelines in the Midwest, Southwest and West Coast. BPH operates, through its subsidiary Buckeye Gulf Coast Pipe Lines, L.P., or BGC, pipelines in the Gulf Coast region for third parties. BPH also holds minority stock interests in two midwest products pipelines and a natural gas liquids pipeline system.

In addition to being Buckeye's general partner, Buckeye GP LLC owns and controls MainLine, which is the general partner of Buckeye Pipe Line, Laurel, Everglades and BPH, which entities we refer to herein as Buckeye's operating partnerships. Buckeye owns an approximate 99% limited partnership interest in each of its operating partnerships. MainLine owns an approximate 1% general partner interest in each of the operating partnerships.

Summary of Conflicts of Interest and Fiduciary Responsibilities

Our general partner has a legal duty to manage us in a manner beneficial to our unitholders. This legal duty originates in state statutes and judicial decisions and is commonly referred to as a "fiduciary duty." However, the officers and directors of our general partner also have fiduciary duties to manage our general partner's business in a manner beneficial to our general partner and its owner. As a result of these and other relationships, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and our general partner and its owner, on the other. In addition, all of the executive officers and non-independent directors of our general partner also serve as executive officers or directors of Buckeye's general partner and, as a result, have fiduciary duties to manage the business of Buckeye in a manner beneficial to Buckeye and its unitholders. Consequently, these directors and officers may encounter situations in which their fiduciary obligations to Buckeye, on the one hand, and us, on the other hand, are in conflict. The resolution of these conflicts may not always be in our best interest or that of our unitholders. For a more detailed description of the conflicts of interest and fiduciary responsibilities of our general partner, please read "Conflicts of Interest and Fiduciary Responsibilities."

Our partnership agreement limits the liability and reduces the fiduciary duties owed by our general partner to our unitholders. Our partnership agreement also restricts the remedies available to unitholders for actions that might otherwise constitute breaches of our general partner's fiduciary duties. By purchasing a common unit, you are consenting to various actions contemplated in our partnership agreement and to conflicts of interest that might otherwise be considered a breach of fiduciary or other duties under applicable state law. Please read "Conflicts of Interest and Fiduciary Responsibilities" for a description of the fiduciary duties imposed on our general partner by Delaware law, the material modifications of these duties contained in our partnership agreement and certain legal rights and remedies available to unitholders.

Our partnership agreement provides that our general partner will be restricted from engaging in any business activities other than acting as our general partner and those activities incidental to its ownership of interests in us. Affiliates of our general partner are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us. For example, our general partner is owned, and we are partially owned, by an affiliate of Carlyle/Riverstone Global Energy and Power Fund II, L.P., or CRF, which also owns, through affiliates, an interest in the general partner of Magellan Midstream Partners, L.P., or Magellan, and an interest in SemGroup, L.P., or SemGroup, both of which are engaged in the transportation, storage and distribution of petroleum products and may acquire other entities that compete with Buckeye. Although Buckeye does not have extensive operations in the geographic areas primarily served by Magellan or SemGroup, Buckeye will compete directly with Magellan, SemGroup and perhaps CRF or other entities in which CRF has an interest for acquisition opportunities throughout the United States and potentially will compete with Magellan, SemGroup and these other entities for new business or extensions of existing services provided by Buckeye's operating partnerships, creating actual and potential conflicts of interest between Buckeye and our affiliates.

For a description of our other relationships with our affiliates, please read "Certain Relationships and Related Transactions."

Summary Historical Consolidated Financial Data

The following table presents summary historical consolidated financial data for our predecessor, MainLine, and its predecessor, Glenmoor Ltd., or Glenmoor, in each case for the periods and as of the dates indicated. Because MainLine had no assets or operations prior to its acquisition of Glenmoor, we refer to Glenmoor as the predecessor of both MainLine and us. The summary historical consolidated statement of operations and cash flow data for the years ended December 31, 2003 and 2005 and the periods of January 1 to May 4, 2004 and May 4 to December 31, 2004, and the balance sheet data as of December 31, 2004 and 2005 are derived from the audited financial statements of MainLine and Glenmoor and should be read together with and are qualified in their entirety by reference to, the historical consolidated financial statements and the accompanying notes included in this prospectus. The summary historical consolidated statement of operations and cash flow data for the years ended December 31, 2001 and 2002 and the balance sheet data at December 31, 2001, 2002 and 2003 are derived from the unaudited financial statements of Glenmoor. The summary historical consolidated statement of operations and cash flow data for the three months ended March 31, 2005 and 2006 and the balance sheet data as of March 31, 2006, are derived from the unaudited financial statements of MainLine and should be read together with and are qualified in their entirety by reference to the historical unaudited condensed consolidated financial statements and the accompanying notes included in this prospectus. The unaudited financial statements include all adjustments, consisting of normal, recurring accruals, that we consider necessary for fair presentation of the financial position and results of operations for these periods and as of those dates.

Because we own and control the general partner of Buckeye, we reflect our ownership interest in Buckeye on a consolidated basis, which means that our financial results are consolidated with Buckeye's financial results. The financial statements of Buckeye Pipe Line Services Company, or Services Company, which employs the employees who manage and operate the assets of Buckeye, are also consolidated into our financial statements. We have no separate operating activities apart from those conducted by Buckeye, and our cash flows consist primarily of distributions from Buckeye on the partnership interests we own. Accordingly, the summary historical consolidated financial data set forth in the following table primarily reflects the operating activities and results of operations of Buckeye. The limited partner interests in Buckeye not owned by our affiliates are reflected as a liability on our balance sheet and the non-affiliated partners' share of income from Buckeye is reflected as an expense in our results of operations.

Our summary historical consolidated financial data for the periods presented reflects the effect of the asset acquisitions Buckeye made during these periods from the date of each acquisition, but not on a pro forma or full period basis.

Summary Financial Information
(in thousands except per unit numbers)

			Glenmoor(a)												MainLine
			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2003			January 1, - May 4, 2004			May 4 - December 31, 2004			Year Ended December 31, 2005			Three Months Ended March 31, 2005			Three Months Ended March 31, 2006
Income Statement Data:
Revenues			$	232,397		$	247,345		$	272,947		$	97,529		$	226,014		$	408,446		$	95,889		$	105,745
	Costs and expenses:
	Operating expenses			104,824			113,720			131,711			49,712			116,203			196,750			46,581			51,261
	Depreciation and amortization			18,818			16,098			17,960			6,388			15,158			32,408			7,431			9,104
	General and administrative			15,849			16,551			17,779			6,341			13,888			23,419			5,749			5,915

		Total		139,491			146,369			167,450			62,441			145,249			252,577			59,761			66,280
Operating income				92,906			100,976			105,497			35,088			80,765			155,869			36,128			39,465
Other income (expense):
	Investment income			1,411			772			645			183			253			884			155			320
	Interest and debt expense			(22,893	)		(25,275	)		(27,704	)		(9,756	)		(28,212	)		(55,366	)		(13,097	)		(15,729	)
	Premium paid on retirement of debt(b)(c)			—			—			(45,464	)		(3,531	)		—			—			—			—

		Total		(21,482	)		(24,503	)		(72,523	)		(13,104	)		(27,959	)		(54,482	)		(12,942	)		(15,409	)

Income before equity income and non-controlling interest				71,424			76,473			32,974			21,984			52,806			101,387			23,186			24,056
Equity income				388			1,552			3,215			1,970			3,707			5,303			1,240			1,380
Non-controlling interest expense				(61,810	)		(64,081	)		(22,583	)		(22,830	)		(55,310	)		(99,704	)		(23,198	)		(23,197	)

Net income			$	10,002		$	13,944		$	13,606		$	1,124		$	1,203		$	6,986		$	1,228		$	2,239

Units outstanding — basic and diluted(d)																145,950			145,950			145,950			145,950

Earnings per unit — basic and diluted(d)															$	0.01		$	0.05		$	0.01		$	0.02

Balance Sheet Data (at period end):
Net property, plant and equipment			$	670,688		$	727,652		$	753,038			—		$	1,335,082		$	1,587,741					$	1,697,723
Total assets				811,242			877,925			948,195			—			1,747,758			2,040,832						2,147,016
Total debt, including current portion				424,375			470,500			508,721			—			1,015,225			1,104,660						1,148,996
Total equity (deficit)				2,542			5,680			(7,642	)		—			67,980			80,442						83,347
Cash Flow Data:
Net cash provided by operating activities			$	83,607		$	95,498		$	115,700		$	25,017		$	79,010		$	150,937		$	22,948		$	19,849
Net cash used in investing activities				(116,707	)		(87,952	)		(59,380	)		(8,684	)		(821,943	)		(291,152	)		(23,792	)		(111,782	)
Net cash provided by (used in) financing activities				13,617			(11,023	)		(43,032	)		(24,638	)		746,348			147,847			413			82,173

(a): MainLine was formed as a Delaware limited partnership on February 24, 2004 and commenced operations with the acquisition of the general partner interests in Buckeye on May 4, 2004. Glenmoor financial information includes that of the general partner of Buckeye and its parent entities for the periods presented prior to their acquisition by MainLine.
(b): Net income in 2003 includes a charge of $45.5 million related to a yield maintenance premium paid on the retirement of $240 million of senior notes.
(c): Net income for the period January 1 - May 4, 2004 includes a charge of $3.5 million related to a yield maintenance premium paid on the retirement of Glenmoor's term loan which was repaid on May 4, 2004.
(d): Earnings per unit is not presented for Glenmoor. Glenmoor was organized as a stock corporation with a capital structure, different from MainLine. Accordingly, presentation of earnings per share would not be meaningful.

RISK FACTORS

You should consider carefully the following risk factors, which we believe include all material risks to our business, together with all of the other information included in this prospectus, in your evaluation of an investment in our common units. Realization of any of the following risks could have a material adverse effect on our business, financial condition, cash flows and results of operations. In that case, the trading price of our common units could decline and you could lose all or part of your investment.

Risks Inherent in Our Dependence on Distributions from Buckeye

The amount of cash that Buckeye can distribute to its partners each quarter, including the amount of incentive distributions, principally depends upon the amount of cash Buckeye generates from its operations, which will fluctuate from quarter to quarter based on, among other things:

•: fluctuations in prices for petroleum products and overall demand for petroleum products in the United States in general, and in Buckeye's service areas in particular (economic activity, weather, alternative energy sources, conservation and technological advances may affect petroleum product prices and demand);
•: changes in laws and regulations, including environmental, safety and tax laws and regulations and the regulation of Buckeye's tariff rates;
•: liability for environmental claims;
•: availability and cost of insurance on Buckeye's assets and operations;
•: shut-downs or cutbacks at major refineries that supply petroleum products transported on Buckeye's pipelines or stored in Buckeye's terminals;
•: deterioration in Buckeye's labor relations;
•: prevailing economic conditions; and
•: disruptions to the air travel system.

In addition, the actual amount of cash Buckeye will have available for distribution will depend on other factors, some of which are beyond its control, including:

•: the level of capital expenditures it makes;
•: the availability, if any, and cost of acquisitions;
•: debt service requirements;
•: fluctuations in working capital needs;
•: restrictions on distributions contained in Buckeye's credit facility and senior notes;
•: Buckeye's ability to borrow under its working capital facility; and
•: the amount, if any, of cash reserves established by Buckeye's general partner in its discretion for the proper conduct of Buckeye's business.

Because of these factors, Buckeye may not have sufficient available cash each quarter to continue to pay distributions at the level of its most recent quarterly distribution of $0.75 per LP

unit, or any other amount. You should also be aware that the amount of cash that Buckeye has available for distribution depends primarily upon its 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, Buckeye may be able to make cash distributions during periods when Buckeye records losses and may not be able to make cash distributions during periods when Buckeye records net income. Please read "—Risks Inherent in Buckeye's Business" for a discussion of risks affecting Buckeye's ability to generate cash flow.

A reduction in Buckeye's distributions will disproportionately affect the amount of cash distributions to which we are currently entitled.

Our ownership of the incentive distribution rights in Buckeye entitles us to receive specified percentages of the amount of cash distributions made by Buckeye to its limited partners. Most of the cash we receive from Buckeye is attributable to our ownership of the incentive distribution rights. Accordingly, any reduction in quarterly cash distributions from Buckeye would have the effect of disproportionately reducing the amount of the distributions that we receive from Buckeye.

Our right to receive incentive distributions will terminate if Buckeye's general partner is removed.

Our right to receive incentive distributions will terminate if Buckeye GP LLC is removed as general partner of Buckeye, effective upon the date of such removal. Please read "Material Provisions of the Partnership Agreement of Buckeye Partners, L.P.—Withdrawal or Removal of the General Partner."

Buckeye may issue additional LP units or other equity securities, which may increase the risk that Buckeye will not have sufficient available cash to maintain or increase its cash distribution level per LP unit.

Because Buckeye distributes to its partners most of the cash generated by its operations, it relies primarily upon external financing sources, including debt and equity issuances, to fund its acquisitions and expansion capital expenditures. Accordingly, Buckeye has wide latitude to issue additional LP units on the terms and conditions established by Buckeye's general partner. We receive cash distributions from Buckeye and its subsidiary operating partnerships on the general partner interests and incentive distribution rights that we own. Because most of the cash we receive from Buckeye is attributable to our ownership of the incentive distribution rights, payment of distributions on additional Buckeye LP units may increase the risk that Buckeye will be unable to maintain or increase its quarterly cash distribution per unit, which in turn may reduce the amount of incentive distributions we receive and the available cash that we have to distribute to our unitholders.

In the future, we may not have sufficient cash to pay our estimated initial quarterly distribution.

Because our primary source of operating cash flow consists of cash distributions from Buckeye, the amount of distributions we are able to make to our unitholders may fluctuate based on the level of distributions Buckeye makes to its partners, including us. Buckeye may not continue to make quarterly distributions at its current level of $0.75 per LP unit, or may not distribute any other amount, or increase its quarterly distributions in the future. In addition, while we would expect to increase or decrease distributions to our unitholders if Buckeye increases or decreases distributions to us, the timing and amount of such changes in distributions, if any, will not necessarily be comparable to the timing and amount of any changes in distributions made by us. Factors such as reserves established by the board of directors of our general partner for our estimated general and administrative expenses of being a public company as well as other operating expenses, reserves to satisfy our debt service requirements, if any, and reserves for future

distributions by us may affect the distributions we make to our unitholders. Prior to making any distributions to our unitholders, we will reimburse our general partner and its affiliates for all direct and indirect expenses incurred by them on our behalf. Our general partner will determine the amount of these reimbursed expenses. The reimbursement of these expenses, in addition to the other factors listed above, could reduce the amount of available cash that we have to make distributions to our unitholders. We cannot guarantee that in the future we will be able to pay distributions at or above our estimated initial quarterly distribution of $0.205 per unit. The actual amount of cash that is available for distribution to our unitholders will depend on numerous factors, many of which are beyond our control or the control of our general partner. Our pro forma consolidated available cash for the year ended December 31, 2005 and for the twelve months ended March 31, 2006 would not have been sufficient to pay the initial quarterly distribution of $0.205 per unit on all units to be outstanding immediately following the completion of this offering. Our pro forma consolidated available cash for the year ended December 31, 2005 and the twelve months ended March 31, 2006 would have been sufficient to pay only 74.3% and 69.9%, respectively, of the full initial distribution amount on our units.

Buckeye's practice of distributing all of its available cash may limit its ability to grow, which could impact distributions to us and the available cash that we have to distribute to our unitholders.

Because our primary cash-generating assets are general partner interests in Buckeye, including the incentive distribution rights, our growth will be dependent upon Buckeye's ability to increase its quarterly cash distributions. Buckeye has historically distributed to its partners most of the cash generated by its operations. As a result, it relies primarily upon external financing sources, including debt and equity issuances, to fund its acquisitions and expansion capital expenditures. Accordingly, to the extent Buckeye is unable to finance growth externally, its ability to grow will be impaired because it distributes substantially all of its available cash. Also, if Buckeye incurs additional indebtedness to finance its growth, the increased interest expense associated with such indebtedness may reduce the amount of available cash that we can distribute to you.

Restrictions in Buckeye's credit facility could limit its ability to make distributions to us.

Buckeye's credit facility contains covenants limiting its ability to incur indebtedness, grant liens, engage in transactions with affiliates and make distributions to us. The facility also contains covenants requiring Buckeye to maintain certain financial ratios. Buckeye is prohibited from making any distribution to unitholders if such distribution would cause an event of default or otherwise violate a covenant under this facility. Please read "Our Cash Distribution Policy and Restrictions on Distributions—General" and "Management's Discussion and Analysis of Financial Condition and Results of Operation—Debt Obligations, Credit Facilities and Other Financing—Buckeye Partners, L.P." for more information about Buckeye's credit facility.

Risks Inherent in Buckeye's Business

Because we are directly dependent on the distributions we receive from Buckeye, risks to Buckeye's operations are also risks to us. We have set forth below risks to Buckeye's business and operations, the occurrence of which could negatively impact Buckeye's financial performance and decrease the amount of cash it is able to distribute to us.

Changes in petroleum demand and distribution may adversely affect Buckeye's business.

Demand for the services provided by Buckeye's operating subsidiaries depends upon the demand for petroleum products in the regions served. Prevailing economic conditions, price and weather affect the demand for petroleum products. Changes in transportation and travel patterns in the areas served by Buckeye's pipelines also affect the demand for petroleum products because a

substantial portion of the petroleum products transported by Buckeye's pipelines and throughput at its terminals is ultimately used as fuel for motor vehicles and aircraft. If these factors result in a decline in demand for petroleum products, the business of Buckeye's operating subsidiaries would be particularly susceptible to adverse effects because they operate without the benefit of either exclusive franchises from government entities or long-term contracts.

Energy conservation, changing sources of supply, structural changes in the oil industry and new energy technologies also could adversely affect Buckeye's business. We cannot predict or control the effect of each of these factors on Buckeye.

Certain of Buckeye's pipeline operations charge tariff rates which are subject to regulation and change by FERC.

Buckeye Pipe Line, Wood River, BPL Transportation, Buckeye NGL and Norco Pipe Line Company, LLC, or Norco, a subsidiary of BPH, are interstate common carriers regulated by FERC under the Interstate Commerce Act and the Department of Energy Organization Act. FERC's primary ratemaking methodology is price indexing. This methodology is used to establish rates on the pipelines owned by Wood River, BPL Transportation, Buckeye NGL and Norco. The indexing method allows a pipeline to increase its rates by a percentage equal to the change in the annual producer price index for finished goods, or PPI, plus 1.3 percent. If the percentage is negative, Buckeye could be required to reduce the rates charged by Wood River, BPL Transportation, Buckeye NGL and Norco if they exceed the new maximum allowable rate. In addition, changes in the percentage might not be large enough to fully reflect actual increases in the costs associated with these pipelines, thus hampering Buckeye's ability to recover its costs.

Buckeye Pipe Line is authorized to charge rates set by market forces, subject to limitations, rather than by reference to costs historically incurred by the pipeline, in 17 regions and metropolitan areas. The Buckeye Pipe Line program is an exception to the generic oil pipeline regulations FERC issued under the Energy Policy Act of 1992. The generic rules rely primarily on an index methodology that allows a pipeline to change its rates in accordance with an index that FERC believes reflects cost changes appropriate for application to pipeline rates. In the alternative, a pipeline is allowed to charge market-based rates if the pipeline establishes that it does not possess significant market power in a particular market.

The Buckeye Pipe Line rate program was reevaluated by FERC in July 2000, and was allowed to continue with no material changes. We cannot predict the impact, if any, that a change in FERC's method of regulating Buckeye Pipe Line would have on Buckeye's operations, financial condition or results of operations.

Buckeye's partnership status may be a disadvantage to it in calculating cost of service for rate-making purposes.

In the past, FERC ruled that pass-through entities, like Buckeye, could not claim an income tax allowance for income attributable to non-corporate limited partners in justifying the reasonableness of their rates. Further, in a July 2004 decision involving an unrelated pipeline limited partnership, the United States Court of Appeals for the District of Columbia Circuit overruled a prior FERC decision allowing a limited partnership to claim a partial income tax allowance. This opinion suggested that in the future a limited partnership may not be able to claim any income tax allowance despite being partially owned by a corporation. In December 2004, FERC issued a Notice of Inquiry seeking comments regarding whether the July 2004 Appeals Court decision applies only to the specific facts of that case, or whether it applies more broadly, and, if the latter, what effect that ruling might have on energy infrastructure investments. On May 4, 2005, FERC adopted a Policy Statement providing that all entities owning public utility assets — oil and gas pipelines and electric utilities — would be permitted to include an income tax allowance in their

cost-of-service rates to reflect the actual or potential income tax liability attributable to their public utility income, regardless of the form of ownership. FERC determined that any pass-through entity seeking an income tax allowance in a rate proceeding must establish that its partners have an actual or potential income tax obligation on the entity's public utility income. The amount of any income tax allowance will be reduced accordingly to the extent that any of the partners do not have an actual or potential income tax obligation. This reduction will be reflected in the weighted income tax liability of the entity's partners. Whether a pipeline's ultimate owners have such actual or potential income tax liability will be reviewed by FERC on a case-by-case basis. Although this new policy is generally favorable for pipelines that are organized as pass-through entities, it still entails risk due to the case-by-case review requirement. This policy was applied by FERC in June 2005 with an order involving SFPP, L.P. FERC found that SFPP, L.P. should be afforded an income tax allowance on all of its partnership interests to the extent that the owners of those interests had an actual or potential income tax obligation during the periods at issue for the income of a jurisdictional pass-through entity. In December 2005, FERC reaffirmed its new income tax allowance policy as it applies to SFPP, L.P. FERC directed SFPP, L.P. to provide certain evidence necessary for determination of its income tax allowance. Requests for a rehearing of the December 2005 order have been filed. In addition, FERC's remand decision of the July 2004 opinion and the new tax allowance policy have been appealed to the United States Court of Appeals for the District of Columbia Circuit. The ultimate outcome of these proceedings is not certain and could result in changes to FERC's treatment of income tax allowances in cost of service. We expect the final adoption and implementation by FERC of the Policy Statement in individual cases will be subject to review by the United States Court of Appeals.

Environmental regulation may impose significant costs and liabilities on Buckeye.

Buckeye's operating subsidiaries are subject to federal, state and local laws and regulations relating to the protection of the environment. Risks of substantial environmental liabilities are inherent in Buckeye's operations, and Buckeye's operating subsidiaries may incur material environmental liabilities. Additionally, Buckeye's costs could increase significantly and Buckeye could face substantial liabilities, if, among other developments:

•: environmental laws, regulations and enforcement policies become more rigorous; or
•: claims for property damage or personal injury resulting from the operations of the operating subsidiaries are filed.

For a more detailed discussion of the environmental regulations applicable to Buckeye's operating subsidiaries please read "Management's Discussion and Analysis of Financial Condition and Results of Operation—Liquidity and Capital Resources—Environmental Matters" and "Management's Discussion and Analysis of Financial Condition and Results of Operation—Critical Accounting Policies and Estimates."

Existing or future state or federal government regulations relating to certain chemicals or additives in gasoline or diesel fuel could require capital expenditures or result in lower pipeline volumes and thereby adversely affect Buckeye's results of operations, thereby reducing Buckeye's ability to make distributions to unitholders, including us.

Changes made to governmental regulations governing the components of refined petroleum products may necessitate changes to Buckeye's pipelines and terminals which may require significant capital expenditures or result in lower pipeline volumes. For example, Buckeye intends to make improvements to certain of its pipelines and terminals in connection with new requirements for the use of ultra low-sulfur diesel fuel, which will be phased in commencing in 2006 through 2010. In connection with these improvements, Buckeye expects to spend $15 to $18 million in capital expenditures in 2006 at certain locations in order to permit Buckeye's facilities to handle this

new product grade. Buckeye may not be able to recover all of its costs related to these expenditures from its pipeline shippers. In addition, the introduction of ultra low sulfur diesel fuel may cause other dislocations in the refined product distribution chain that we cannot predict at this time. Moreover, the increasing use of ethanol as a fuel additive, which is blended with gasoline at product terminals, may lead to reduced pipeline volumes and revenue which may not be totally offset by increased terminal blending fees Buckeye may receive at its terminals.

Department of Transportation regulations may impose significant costs and liabilities on Buckeye.

Buckeye's pipeline operations are subject to regulation by the Department of Transportation. These regulations require, among other things, that pipeline operators engage in a regular program of pipeline integrity testing to assess, evaluate, repair and validate the integrity of their pipelines, which, in the event of a leak or failure, could affect populated areas, unusually sensitive environmental areas, or commercially navigable waterways. In response to these regulations, Buckeye's operating subsidiaries conduct pipeline integrity tests on an ongoing and regular basis. Depending on the results of these integrity tests, Buckeye's operating subsidiaries could incur significant and unexpected capital and operating expenditures, not accounted for in anticipated capital or operating budgets, in order to repair such pipelines to ensure their continued safe and reliable operation.

Terrorist attacks could adversely affect Buckeye's business.

Since the attacks of September 11, 2001, the United States government has issued warnings that energy assets, specifically our nation's pipeline infrastructure, may be the future target of terrorist organizations. These developments have subjected Buckeye's operations to increased risks. Any future terrorist attack on Buckeye's facilities, those of Buckeye's customers and, in some cases, those of other pipelines, refineries or terminals, could significantly disrupt Buckeye's operations, require substantial expenditures for replacement and repair of pipelines, refineries or terminals or otherwise have a material adverse effect on Buckeye's business.

Buckeye's operations are subject to operational hazards and unforeseen interruptions for which Buckeye may not be adequately insured.

Buckeye's operations are subject to operational hazards and unforeseen interruptions such as natural disasters, adverse weather, accidents, fires, explosions, hazardous materials releases, and other events beyond Buckeye's control. These events might result in a loss of equipment or life, injury, or extensive property damage, as well as an interruption in Buckeye's operations. Buckeye's operating subsidiaries' operations are currently covered by property, casualty, workers' compensation and environmental insurance policies. In the future, however, Buckeye may not be able to maintain or obtain insurance of the type and amount desired at reasonable rates. As a result of market conditions, premiums and deductibles for certain insurance policies have increased substantially, and could escalate further. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. For example, insurance carriers are now requiring broad exclusions for losses due to war risk and terrorist acts. If Buckeye were to incur a significant liability for which it was not fully insured, it could reduce the amount of available cash Buckeye has, thereby reducing Buckeye's ability to make distributions to unitholders, including us.

Competition could adversely affect Buckeye's operating results.

addition, new pipelines (including pipeline segments that connect with existing pipeline systems) could be built to effectively compete with Buckeye in particular locations.

Buckeye competes with marine transportation in some areas. Tankers and barges on the Great Lakes account for some of the volume to certain Michigan, Ohio and upstate New York locations during the approximately eight non-winter months of the year. Barges are presently a competitive factor for deliveries to the New York City area, the Pittsburgh area, Connecticut and locations on the Ohio River such as Mt. Vernon, Indiana and Cincinnati, Ohio, and locations on the Mississippi River such as St. Louis, Missouri.

Trucks competitively deliver petroleum products in a number of areas that Buckeye serves. While their costs may not be competitive for longer hauls or large volume shipments, trucks compete effectively for incremental and marginal volumes in many areas that Buckeye serves. The availability of truck transportation places a significant competitive constraint on Buckeye's ability to increase its operating subsidiaries' tariff rates.

Privately arranged exchanges of petroleum products between marketers in different locations are an increasing but non-quantified form of competition. Generally, these exchanges reduce both parties' costs by eliminating or reducing transportation charges. In addition, consolidation among refiners and marketers that has accelerated in recent years has altered distribution patterns, reducing demand for transportation services in some markets and increasing them in other markets.

Mergers among Buckeye's customers and competitors could result in lower volumes being shipped on Buckeye's pipelines and stored in Buckeye's terminals, thereby reducing the amount of cash Buckeye generates.

Mergers between existing Buckeye customers could provide strong economic incentives for the combined entities to utilize their existing pipeline and terminal systems instead of Buckeye's. As a result, Buckeye could lose some or all of the volumes and associated revenues from these customers and Buckeye could experience difficulty in replacing those lost volumes and revenues. Because most of Buckeye's operating costs are fixed, a reduction in volumes would result in not only a reduction of revenues, but also a decline in net income and cash flow of a similar magnitude, which would reduce Buckeye's ability to meet its financial obligations and pay cash distributions to us.

Buckeye may incur liabilities related to assets Buckeye has acquired. These costs and liabilities may not be covered by indemnification rights that Buckeye may have against the sellers of the assets.

Some of the assets Buckeye has acquired have been used for many years to distribute, store or transport petroleum products. Releases may have occurred prior to Buckeye's acquisition from terminals or along pipeline rights-of-way that require remediation. In addition, releases may have occurred in the past that have not yet been discovered, which could require costly future remediation. If a significant release or event occurred in the past, the liability for which was not retained by the seller or for which indemnification from the seller is not available, it could adversely affect Buckeye's financial position and results of operations.

A decline in production at the ConocoPhillips Wood River refinery could materially reduce the volume of refined petroleum products Buckeye transports.

A majority of the refined petroleum products transported on Wood River's pipeline system is produced at ConocoPhillip's Wood River refinery. A decline in production at the ConocoPhillips Wood River refinery could materially reduce the volume of refined petroleum products Buckeye transports on certain of the pipelines owned by Wood River. As a result, Buckeye's revenues and,

therefore, Buckeye's ability to pay cash distributions to us could be adversely affected. The ConocoPhillips Wood River refinery could partially or completely shut down its operations, temporarily or permanently, due to factors affecting its ability to produce refined petroleum products such as:

•: unscheduled maintenance or catastrophic events, such as a fire, flood, explosion or power outage;
•: labor difficulties that result in a work stoppage or slowdown;
•: environmental proceedings or other litigation that require the halting of all or a portion of the operations at the refinery;
•: loss of significant downstream customers; or
•: legislation or regulation that adversely impacts the economics of refinery operations.

Potential future acquisitions and expansions, if any, may affect Buckeye's business by substantially increasing the level of Buckeye's indebtedness and contingent liabilities and increasing Buckeye's risks of being unable to effectively integrate these new operations.

From time to time, Buckeye evaluates and acquires assets and businesses that Buckeye believes complement its existing assets and businesses. Acquisitions may require substantial capital or the incurrence of substantial indebtedness. If Buckeye consummates any future acquisitions, Buckeye's capitalization and results of operations may change significantly.

Acquisitions and business expansions involve numerous risks, including difficulties in the assimilation of the assets and operations of the acquired businesses, inefficiencies and difficulties that arise because of unfamiliarity with new assets and the businesses associated with them and new geographic areas and the diversion of management's attention from other business concerns. Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and Buckeye may experience unanticipated delays in realizing the benefits of an acquisition. Following an acquisition, Buckeye may discover previously unknown liabilities associated with the acquired business for which Buckeye has no recourse under applicable indemnification provisions.

Risks Inherent in an Investment in Us

The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public market, including sales by our current equity owners.

After the completion of this offering, we will have outstanding 28,300,000 common units, which includes the 10,500,000 common units we are selling in this offering, which may be resold in the public market immediately. In addition, we will have outstanding 1,362,000 management units which are convertible into common units on a one-for-one basis. All of our common units that will be issued to the current holders of existing Class A Units and all of the management units, which will be issued to the current holders of MainLine's existing Class B Units, will be subject to resale restrictions under 180-day lock-up agreements with our underwriters. Each of the lock-up arrangements with the underwriters may be waived in the discretion of the underwriters. In the event these restrictions are waived, sales by any of our existing equity owners of a substantial number of our common units in the public markets following this offering, or the perception that such sales might occur, could reduce the price of our common units or could impair our ability to obtain capital through an offering of equity securities. Please read "Units Eligible for Future Sale."

Cost reimbursements due our general partner may be substantial and will reduce our cash available for distribution to holders of our units.

Prior to making any distribution on our units, we will reimburse our general partner for expenses it incurs on our behalf. The reimbursement of expenses could reduce the amount of cash we have to make distributions to holders of our units. Our general partner will determine the amount of these expenses. In addition, our general partner and its affiliates may perform other services for us for which we will be charged fees as determined by our general partner.

Our unitholders do not elect our general partner or vote on our general partner's directors. Following the completion of this offering, an affiliate of our general partner will own a sufficient number of common units to allow it to block any attempt to remove our general partner.

Unlike the holders of common stock in a corporation, our unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management's decisions regarding our business. Our public unitholders did not elect our general partner or the directors of our general partner and will have no right to elect our general partner or the directors of our general partner on an annual or other continuing basis in the future.

Furthermore, if our public unitholders are dissatisfied with the performance of our general partner, they will have little ability to remove our general partner. Our general partner may not be removed except upon the vote of the holders of at least 80% of the outstanding common and management units voting together as a single class. Because affiliates of our general partner own more than 20% of our outstanding units, our general partner currently cannot be removed without the consent of our general partner and its affiliates. Please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Withdrawal or Removal of the General Partner."

Our unitholders' voting rights are further restricted by the provision in our partnership agreement providing that 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. In addition, our partnership agreement contains provisions limiting the ability of our unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting our unitholders' ability to influence the manner or direction of our management. Additionally, our partnership agreement provides that our general partner, in its sole discretion, may at any time adopt a unitholder rights plan similar to a shareholder rights plan for corporations.

As a result of these provisions, the price at which our common units will trade may be lower because of the absence or reduction of a takeover premium in the trading price. Please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Meetings; Voting" and "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Unitholder Rights Plan."

Our current equity owners own a controlling interest in us and own our general partner and can determine the outcome of all matters voted upon by our unitholders.

After this offering, our current equity owners will own 62.9% of our units and will own our general partner. As a result, if our current equity owners were to act together, they would be able to control the outcome of any matter that comes before a unitholder vote.

The control of our general partner may be transferred to a third party, and that party could replace our current management team, in each case, without unitholder consent.

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 our unitholders. Furthermore, the owner of our general partner may transfer its ownership interest in our general partner to a third party. The new owner of our general partner would then be in a position to replace the board of directors and officers of our general partner and to control the decisions taken by the board of directors and officers.

The initial public offering price of our common units may not be indicative of the market price of our common units after this offering and our unit price may be volatile. In addition, you may not be able to resell our common units at or above the initial public offering price.

Prior to this offering there has been no public market for our common units. We do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. The initial public offering price of our common units was determined by negotiations between us and the underwriters based on numerous factors which we discuss in the "Underwriting" section of this prospectus. This price may not be indicative of the market price for our common units after this initial public offering. The market price of our common units could be subject to significant fluctuations after this offering, and may decline below the initial public offering price. You may not be able to resell your common units at or above the initial public offering price. The following factors could affect our common unit price:

•: the amount of Buckeye's distribution to its partners, including us;
•: Buckeye's operating and financial performance and prospects;
•: quarterly variations in the rate of growth of our financial indicators, such as net income per unit, net income and cash flow;
•: changes in revenue or earnings estimates or publication of research reports by analysts;
•: level of investor interest in purchasing our common units due to the very limited number of publicly traded entities whose assets consist exclusively of general partner interests in a publicly traded limited partnership;
•: speculation in the press or investment community;
•: sales of our common units by us or our unitholders;
•: actions by our unitholders;
•: announcements by Buckeye or its competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
•: lack of liquidity, which may result in wide bid-ask spreads and limit the number of investors who are able to buy our common units;
•: fluctuations in Buckeye's LP unit price;
•: general market conditions, including interest rates; and
•: domestic and international economic, legal and regulatory factors unrelated to our performance.

The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies and partnerships. These broad market fluctuations may adversely affect the trading price of our common units.

Our common units and the Buckeye LP units may not trade in simple relation or proportion to one another. Instead, while the trading prices of our common units and the Buckeye LP units are likely to follow generally similar broad trends, the trading prices may diverge because, among other things we participate in Buckeye's GP unit distributions and incentive distributions, and Buckeye's limited partners do not. Please read "Description of Our Common Units" for a comparison of the LP units and our common units.

Increases in interest rates may cause the market price of our common units to decline.

An increase in interest rates may cause a corresponding decline in demand for equity investments in general, and in particular for yield-based equity investments such as our common units. Any such increase in interest rates or reduction in demand for our common units may cause the trading price of our common units to decline.

If in the future we cease to manage and control Buckeye through our ownership of the general partner interests in Buckeye, we may be deemed to be an investment company under the Investment Company Act of 1940.

If we cease to manage and control Buckeye and are deemed to be an investment company under the Investment Company Act of 1940, we would either have to register as an investment company under the Investment Company Act of 1940, obtain exemptive relief from the Securities and Exchange Commission or modify our organizational structure or our contract rights to fall outside the definition of an investment company. Registering as an investment company could, among other things, materially limit our ability to engage in transactions with affiliates, including the purchase and sale of certain securities or other property to or from our affiliates, restrict our ability to borrow funds or engage in other transactions involving leverage and require us to add additional directors who are independent of us and our affiliates, and reduce the price of our common units.

You will experience immediate and substantial dilution of $16.31 per common unit in the net tangible book value of your common units.

The initial public offering price of our common units is substantially higher than the pro forma net tangible book value per common unit of the outstanding common units immediately after the offering. If you purchase common units in this offering you will incur immediate and substantial dilution in the pro forma net tangible book value per common unit from the price you pay for the common units.

You may not have limited liability if a court finds that unitholder action constitutes control of our business.

Under Delaware law, you could be held liable for our obligations to the same extent as a general partner if a court determined that the right or the exercise of the right by our unitholders as a group to remove or replace our general partner, to approve some amendments to the partnership agreement or to take other action under our partnership agreement constituted participation in the "control" of our business. Additionally, the limitations on the liability of holders of limited partner interests for the liabilities of a limited partnership have not been clearly established in many jurisdictions.

Our general partner generally has unlimited liability for the obligations of the partnership, such as its debts and environmental liabilities, except for those contractual obligations of the partnership that are expressly made without recourse to our general partner.

In addition, Section 17-607 of the Delaware Revised Uniform Limited Partnership Act provides that, under some circumstances, a unitholder may be liable to us for the amount of a distribution

for a period of three years from the date of the distribution. Please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Limited Liability" for a discussion of the implications of the limitations on liability to a unitholder.

The amount of cash distributions that we will be able to distribute to you will be reduced by the costs associated with being a public company, other general and administrative expenses, and reserves that our general partner believes prudent to maintain for the proper conduct of our business and for future distributions.

Before we can pay distributions to our unitholders, we must first pay or reserve funds for our expenses, including the costs of being a public company and other operating expenses, and reserves for future distributions during periods of limited cash flows. In addition, we may reserve funds to provide cash for exercise of the rights of Buckeye GP LLC and MainLine to maintain their general partner interests by making capital contributions to Buckeye or its operating partnerships.

We are directly dependent on Buckeye for our growth. As a result of the fiduciary obligations of Buckeye's general partner, which is our wholly owned subsidiary, to the unitholders of Buckeye, our ability to pursue business opportunities independently may be limited.

We currently intend to grow primarily through the growth of Buckeye. While we are not precluded from pursuing business opportunities independent of Buckeye, Buckeye's general partner, which is our wholly owned subsidiary, has fiduciary duties to Buckeye unitholders which could make it difficult for us to engage in any business activity that is competitive with Buckeye. Those fiduciary duties are applicable to us because we control the general partner through our ability to elect all of its directors. Accordingly, we may be unable to diversify our sources of revenue in order to increase cash distributions to you. Please read "—Risks Related to Conflicts of Interest."

Our anticipated credit agreement will contain operating and financial restrictions that may limit our business and financing activities.

The operating and financial restrictions and covenants in our credit agreement and any future financing agreements could restrict our ability to finance future operations or capital needs or to expand or pursue our business activities. For example, we anticipate that our credit agreement will restrict or limit our ability to:

•: make distributions if any default or event of default occurs;
•: incur additional indebtedness or guarantee other indebtedness;
•: grant liens or make certain negative pledges;
•: make certain loans or investments;
•: make any material change to the nature of our business, including consolidations, liquidations and dissolutions; or
•: enter into a merger, consolidation, sale and leaseback transaction or sale of assets.

Our ability to comply with the covenants and restrictions contained in our credit agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions, covenants, ratios or tests in our credit agreement, a significant portion of our indebtedness may become immediately due and payable, and our lenders' commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments.

Risks Related to Conflicts of Interest

Buckeye GP LLC owes fiduciary duties to Buckeye and Buckeye's unitholders, which may conflict with our interests.

Conflicts of interest exist and may arise in the future as a result of the relationships between us and our affiliates, including Buckeye's general partner, on one hand, and Buckeye and its limited partners, on the other hand. The directors and officers of Buckeye GP LLC have fiduciary duties to manage Buckeye in a manner beneficial to us, Buckeye GP LLC's owner. At the same time, Buckeye GP LLC has a fiduciary duty to manage Buckeye in a manner beneficial to Buckeye and its limited partners. The board of directors of Buckeye GP LLC may resolve any such conflict of interest and has broad latitude to consider the interests of all parties to the conflict. The resolution of these conflicts may not always be in our best interest or that of our unitholders.

For example, conflicts of interest may arise in the following situations:

•: the allocation of shared overhead expenses to Buckeye and us;
•: the interpretation and enforcement of contractual obligations between us and our affiliates, on one hand, and Buckeye, on the other hand;
•: the determination of the amount of cash to be distributed to Buckeye's partners and the amount of cash to be reserved for the future conduct of Buckeye's business;
•: the determination of whether Buckeye should make acquisitions and on what terms;
•: the determination of whether Buckeye should use cash on hand, borrow or issue equity to raise cash to finance acquisitions or expansion capital projects, repay indebtedness, meet working capital needs, pay distributions or otherwise; and
•: any decision we make in the future to engage in business activities independent of Buckeye.

The fiduciary duties of our general partner may conflict with the fiduciary duties of Buckeye's general partner.

Conflicts of interest may arise because of the relationships between Buckeye GP LLC, Buckeye and us. Our general partner has fiduciary duties to manage our business in a manner beneficial to us and our unitholders and the owner of our general partner. Simultaneously, a majority of our general partner's directors and all of its officers are also directors and officers of Buckeye GP LLC, which has fiduciary duties to manage the business of Buckeye in a manner beneficial to Buckeye and Buckeye's unitholders. Our partnership agreement contains various provisions modifying and restricting the fiduciary duties that might otherwise be owed by our general partner. See "Conflicts of Interest and Fiduciary Responsibilities—Fiduciary Duties." The resolution of these conflicts may not always be in our best interest or that of our unitholders.

Potential conflicts of interest may arise among our general partner, its affiliates and us. Our general partner has limited fiduciary duties to us and our unitholders, which may permit it to favor its own interests to the detriment of us and our unitholders.

Following this offering, affiliates of our general partner, together with the executive officers of our general partner, will own a 63% limited partner interest in us, represented by common and management units. In addition, Carlyle/Riverstone BPL Holdings II, LP owns our general partner. Conflicts of interest may arise among our general partner and its affiliates, 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 interests and the interests of its affiliates over the interests of our unitholders. These conflicts include, among others, the following situations:

Conflicts Relating to Control:

•: our general partner is allowed to take into account the interests of parties other than us in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders;
•: our general partner determines whether or not we incur debt and that decision may affect our or Buckeye's credit ratings;
•: our general partner has limited its liability and has reduced its fiduciary duties under our partnership agreement, while also restricting the remedies available to our unitholders for actions that, without these limitations and reductions, might constitute breaches of fiduciary duty. As a result of purchasing units, our unitholders consent to some actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicable state law;
•: our general partner controls the enforcement of obligations owed to us by it and its affiliates;
•: our general partner decides whether to retain separate counsel, accountants or others to perform services for us; and
•: our partnership agreement gives our general partner broad discretion in establishing financial reserves for the proper conduct of our business. These reserves also will affect the amount of cash available for distribution.

Conflicts Relating to Costs:

•: our general partner determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuances of additional partnership securities and reserves, each of which can affect the amount of cash that is available to be distributed to our unitholders;
•: our general partner determines which costs incurred by it and its affiliates are reimbursable by us; and
•: our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered on terms that are fair and reasonable to us or entering into additional contractual arrangements with any of these entities on our behalf.

Please read "Certain Relationships and Related Transactions—Our Relationship with Buckeye" and "Conflicts of Interest and Fiduciary Responsibilities—Conflicts of Interest."

Our reimbursement of expenses of our general partner will limit our cash available for distribution.

Our general partner may make expenditures on our behalf for which it will seek reimbursement from us. In addition, under Delaware partnership law, our general partner has unlimited liability for our obligations, such as our debts and environmental liabilities, except for our contractual obligations that are expressly made without recourse to our general partner. To the extent our general partner incurs obligations on our behalf, we are obligated to reimburse or indemnify it. If we are unable or unwilling to reimburse or indemnify our general partner, our general partner may take actions to cause us to make payments of these obligations and liabilities. Any such payments could reduce the amount of cash available for distribution to our unitholders and cause the value of our common units to decline.

Our partnership agreement contains provisions that reduce the remedies available to unitholders for actions that might otherwise constitute a breach of fiduciary duty by our general partner. It will be difficult for a unitholder to challenge a resolution of a conflict of interest by our general partner or by its conflicts committee.

Whenever our general partner makes a determination or takes or declines to take any action in its capacity as our general partner, it will be obligated to act in good faith, which means it must reasonably believe that the determination or other action is in our best interests. Whenever a potential conflict of interest exists between us and our general partner, the board of directors of our general partner may resolve such conflict of interest. If the board of directors of our general partner determines that its resolution of the conflict of interest is on terms no less favorable to us than those generally being provided to or available from unrelated third parties or is fair and reasonable to us, taking into account the totality of the relationships between us and our general partner, then it shall be presumed that in making this determination, our general partner acted in good faith. A unitholder seeking to challenge this resolution of the conflict of interest would bear the burden of overcoming such presumption. This is different from the situation of Delaware corporations, where a conflict resolution by an interested party would be presumed to be unfair and the interested party would have the burden of demonstrating that the resolution was fair. Please read "Conflicts of Interest and Fiduciary Responsibilities—Conflicts of Interest."

Furthermore, if our general partner obtains the approval of its conflicts committee, the resolution will be conclusively deemed to be fair and reasonable to us and not a breach by our general partner of any duties it may owe to us or our unitholders. This is different from the situation of Delaware corporations, where a conflict resolution by a committee consisting solely of independent directors would merely shift the burden of demonstrating unfairness to the plaintiff. If you purchase a common unit, you will be treated as having consented to the various actions contemplated in the partnership agreement and conflicts of interest that might otherwise be considered a breach of fiduciary duties under applicable state law. As a result, unitholders will effectively not be able to challenge a decision by the conflicts committee.

Our general partner's affiliates may compete with us.

Our executive officers face conflicts in the allocation of their time to our business.

Our general partner shares administrative personnel with Buckeye's general partner to operate both our business and Buckeye's business. Our general partner's officers, who are also the officers

of Buckeye's general partner, will have responsibility for overseeing the allocation of time spent by administrative personnel on our behalf and on behalf of Buckeye. These officers face conflicts regarding these time allocations which may adversely affect our or Buckeye's results of operations, cash flows, and financial condition. These allocations may not necessarily be the result of arms- length negotiations between Buckeye's general partner and our general partner.

Our general partner may cause us to issue additional common units or other equity securities without your approval, which would dilute your ownership interests.

Our general partner may cause us to issue an unlimited number of additional common units or other equity securities of equal rank with the common units, without unitholder approval. The issuance of additional common units or other equity securities of equal rank will have the following effects:

•: our unitholders' proportionate ownership interest in us will decrease;
•: the amount of cash available for distribution on each common unit may decrease;
•: the relative voting strength of each previously outstanding common unit may be diminished; and
•: the market price of the common units may decline.

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

If at any time more than 90% of the outstanding common units are owned by our general partner and its affiliates, our general partner will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the remaining common units held by unaffiliated persons at a price equal to the greater of (x) the average of the daily closing prices of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (y) the highest price paid by our general partner or any of its affiliates for common units during the 90 day period preceding the date such notice is first mailed. 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 common units. At the completion of this offering and assuming no exercise of the underwriters' option to purchase additional units, our general partner and its affiliates will own 63% of the common and management units. For additional information about the call right, please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Call Right."

Tax Risks to Our Common Unitholders

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

If we or Buckeye were treated as a corporation for federal income tax purposes, or if we or Buckeye were to become subject to a material amount of entity-level taxation for state tax purposes, then our cash available for distribution to you would be substantially reduced.

The value of our investment in Buckeye depends largely on Buckeye being treated as a partnership for federal income tax purposes, which requires that 90% or more of Buckeye's gross income for every taxable year consist of qualifying income, as defined in Section 7704 of the Internal Revenue Code. Buckeye may not meet this requirement or current law may change so as to cause, in either event, Buckeye to be treated as a corporation for federal income tax purposes or otherwise subject to federal income tax. Moreover, the anticipated after-tax economic benefit of an

investment in our 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 Internal Revenue Service.

If Buckeye were treated as a corporation for federal income tax purposes, it would pay federal income tax on its taxable income at the corporate tax rate, which is currently a maximum of 35%. Distributions to us would generally be taxed again as corporate distributions, and no income, gains, losses, deductions or credits would flow through to us. As a result, there would be a material reduction in our anticipated cash flow and distributions to unitholders, likely causing a substantial reduction in the value of our units.

If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our taxable income at the corporate tax rate. Distributions to you would generally be taxed again as corporate distributions, and no income, gains, losses, deductions or credits 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. Thus, treatment of us as a corporation would result in a material reduction in our anticipated cash flow, likely causing a substantial reduction in the value of our units.

Current law may change, causing us or Buckeye to be treated as a corporation for federal income tax purposes or otherwise subjecting us or Buckeye to entity level taxation. In addition, because of widespread state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity level taxation through the imposition of state income, franchise or other forms of taxation. For example, Buckeye will be subject to a new entity level tax on the portion of our income that is generated in Texas beginning in our tax year ending December 31, 2007. Specifically, the Texas margin tax will be imposed at a maximum effective rate of .7% of Buckeye's gross income apportioned to Texas. Imposition of such a tax on Buckeye or us by Texas, or any other state, will reduce the cash available for distribution to you.

If the IRS contests the federal income tax positions that we or Buckeye take, it may adversely affect the market for our common units or Buckeye LP units, and the costs of any contest will reduce cash available for distribution to our unitholders.

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 that affects us. Moreover, Buckeye has not requested any ruling from the IRS with respect to its treatment as a partnership for federal income tax purposes or any other matter that affects it. The IRS may adopt positions that differ from the positions we or Buckeye take. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we or Buckeye take. A court may disagree with some or all of the positions we or Buckeye take. Any contest with the IRS may materially and adversely impact the market for our common units or Buckeye's LP units and the price at which they trade. In addition, the cost of any contest between Buckeye and the IRS will result in a reduction in cash available for distribution to Buckeye unitholders and thus indirectly by us, as a unitholder and as the owner of the general partner of Buckeye. Moreover, the costs of any contest between us and the IRS will result in a reduction in cash available for distribution to our unitholders and thus will be borne indirectly by our unitholders.

You may be required to pay taxes on your share of our income 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, whether or not you receive cash distributions from us. You may not receive cash distributions from us equal to your share of our taxable income or even equal to the tax liability that results from the taxation of your share of our taxable income.

Tax gain or loss on disposition of our common units could be more or less than expected.

If you sell your common units, you will recognize a gain or loss equal to the difference between the amount realized and the adjusted tax basis in those common units. Prior distributions to you in excess of the total net taxable income allocated to you, which decreased the tax basis in your common units, will, in effect, become taxable income to you if the common units are sold at a price greater than your tax basis in those common units, even if the price you receive is less than the original cost. A substantial portion of the amount realized, whether or not representing gain, may be ordinary income to you. 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 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, including employee benefit plans and individual retirement accounts (known as IRAs), and non-U.S. persons raises issues unique to them. For example, virtually all of our income allocated to organizations exempt from federal income tax, including individual retirement accounts and other retirement plans, will be unrelated business taxable income and will be taxable to such a unitholder. Distributions to non-U.S. persons will be reduced by withholding taxes imposed at the highest effective applicable tax rate, and non-U.S. persons will be required to file United States federal income tax returns and pay tax on their share of our taxable income.

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

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

The sale or exchange of 50% or more of our capital and profit interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes.

We will be considered to have terminated our partnership for federal income tax purposes if there is a sale or exchange of 50% or more of the total interests in our capital and profits within a twelve-month period. Likewise, Buckeye will be considered to have terminated its partnership for federal income tax purposes if there is a sale or exchange of 50% or more of the total interests in Buckeye's capital and profits within a twelve-month period. A termination would, among other things, result in the closing of our taxable year or Buckeye's taxable year for all unitholders and could result in a deferral of depreciation deductions allowable in computing our taxable income or Buckeye's taxable income for the year in which the termination occurs, as the case may be. Thus, if this occurs you will be allocated an increased amount of federal taxable income for the year in which we or Buckeye are considered to be terminated as a percentage of the cash distributed to you with respect to that period. Although the amount of increase cannot be estimated because it depends upon numerous factors including the timing of the termination, the amount could be material. If treated as a new partnership, we or Buckeye must make new elections and could be subject to penalties if we or Buckeye are unable to determine that a termination occurred. Please read "Material Tax Consequences—Disposition of Units—Constructive Termination" for a description of the consequences of such a termination for federal income tax purposes.

Unitholders may be subject to state and local taxes and return filing requirements as a result of investing in our common units.

In addition to federal income taxes, our unitholders will likely be subject to other taxes, including state and local taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we or Buckeye do business or own property now or in the future, even if our unitholders do not reside in any of those jurisdictions. Our unitholders likely will be required to file state and local income tax returns and pay state and local income taxes in some or all of these jurisdictions. Further, unitholders may be subject to penalties for failure to comply with those requirements. We or Buckeye may do business or own property in other states in the future. It is the responsibility of each unitholder to file all United States federal, state and local tax returns that may be required of such unitholder. Our counsel has not rendered an opinion on the state or local tax consequences of an investment in our common units.

USE OF PROCEEDS

We expect to receive net proceeds of approximately $167.4 million from the sale of 10,500,000 common units offered by this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will use the net proceeds from this offering, together with cash on hand, to repay all outstanding indebtedness under MainLine's term loan and to make distributions to our current equity owners.

We intend to use the net proceeds from this offering, together with cash on hand of approximately $11.0 million resulting from termination of an interest rate swap and reserve accounts related to MainLine's term loan, to:

•

repay all outstanding indebtedness under MainLine's term loan. The term loan was incurred on December 17, 2004. As of August 3, 2006, the amount outstanding under the term loan, including accrued interest, was $169.7 million. The term loan bears interest at our option at a floating rate equal to either the prime rate or Eurodollar rate plus an applicable margin and matures on December 17, 2011. As of March 31, 2006, the interest rate on amounts outstanding under the term loan was 7.31% before accounting for the impact of outstanding interest rate swap agreements;

•

pay approximately $1.9 million of transaction expenses associated with the offering; and

•

make distributions to our current equity owners with the balance of the net proceeds, currently estimated to be approximately $7.7 million. The distributions will be made in accordance with the distribution provisions of MainLine's partnership agreement, as if our current equity owners continued to own their Class A and Class B units in MainLine. Our current equity owners are:

•: MainLine Management LLC, our general partner;
•: Carlyle/Riverstone BPL Holdings II, L.P., an entity controlled by CRF;
•: Eric A. Gustafson;
•: Brian K. Jury;
•: Robert A. Malecky;
•: Stephen C. Muther;
•: Vance E. Powers;
•: William H. Shea, Jr.;
•: Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992, David J. Martinelli Trustee for the benefit of David Martinelli;
•: Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992, Susan Martinelli Shea and William H. Shea, Jr., Trustees for the benefit of Susan Martinelli Shea; and
•: Robert B. Wallace.

If the underwriters exercise all or any portion of their over-allotment option, we will use all of the net proceeds from the sale of our common units sold pursuant to the exercise of that option to fund the redemption of an equal number of units from our current equity owners.

CAPITALIZATION

The following table sets forth the cash and cash equivalents and capitalization of our predecessor, MainLine, as of March 31, 2006 on:

•

a consolidated historical basis; and

•

a pro forma basis, giving effect to:

•: this offering of common units and the application of the estimated net proceeds therefrom as described in "Use of Proceeds;" and
•: the distribution of any proceeds from the termination of an interest rate swap and reserve accounts related to MainLine's term loan to our current equity owners.

Our historical financial data presented in the table below is derived from and should be read in conjunction with our historical financial statements, including the accompanying notes, included elsewhere in this prospectus. Please read our unaudited pro forma consolidated financial statements included elsewhere in this prospectus for a complete description of the adjustments we have made to arrive at our pro forma capitalization data.

			As of March 31, 2006
			Actual			Pro Forma
			(in thousands)
Cash and cash equivalents			$	19,224		$	19,224

Restricted cash			$	5,668		$	—

Long-term Debt:
MainLine/Buckeye GP Holdings L.P.:
	Term Loan			169,000			—
	Revolving credit facility			—			—

				169,000			—
Buckeye Pipe Line Services Company:
	3.60% Notes due March 28, 2011			32,077			32,077
	Unamortized retirement premium			(1,171	)		(1,171	)

				30,906			30,906
Buckeye:
	4.625% Notes due June 15, 2013		$	300,000		$	300,000
	5.30% Notes due October 15, 2014			275,000			275,000
	6.750% Notes due August 15, 2033			150,000			150,000
	5.125% Notes due June 30, 2017			125,000			125,000
	Revolving credit facility			100,000			100,000
	Less: unamortized discount			(2,616	)		(2,616	)
	Adjustment to fair value associated with hedge of fair value			1,706			1,706

		Total long-term debt		1,148,996			979,996
Non-controlling interests				773,823			773,823

			As of March 31, 2006
			Actual		Pro Forma
			(in thousands)
Partners' capital:
Held by public:
	Common units			—		167,426
Held by our general partner and its affiliates:
	General partner units			7		—
	General partner common units			—		7
	Limited partners — A Units			76,371		—
	Limited partners — B Units			3,473		—
	Common units			—		67,338
	Management units			—		6,715
	Gains on issuance of LP units by Buckeye Partners, L.P.			1,482		1,482
	Accumulated other comprehensive income			2,014		—

		Total partners' capital		83,347		242,968

Total capitalization			$	2,006,166	$	1,996,787

DILUTION

Dilution is the amount by which the offering price paid by purchasers of common units sold in this offering will exceed the net tangible book value per unit after the offering. On a pro forma basis as of March 31, 2006, after giving effect to the offering of our common units at the initial public offering price of $17.00 per common unit and the related transactions, the net tangible book value of our assets would have been $19.5 million, or $0.69 per unit. Purchasers of our common units in this offering will experience immediate and substantial dilution in net tangible book value per common unit for financial accounting purposes, as illustrated in the following table. The pro forma tangible net book value per unit after the offering is determined by dividing our pro forma net tangible book value, after giving effect to the application of the net proceeds of the offering by the 28,300,000 units outstanding after the offering.

Initial public offering price per common unit				$	17.00
Pro forma net tangible book value per unit before the offering	$	(7.87	)
Increase in net tangible book value per unit attributable to new investors		8.56

Less: Pro forma net tangible book value per unit after the offering					0.69

Immediate dilution in net tangible book value per unit to new investors				$	16.31

The following table sets forth the number of common units that we will issue and the total consideration contributed to us by our current equity owners and their affiliates in respect of their common units and by the purchasers of common units in this offering upon consummation of the transactions contemplated by this prospectus:

		Units Acquired				Total Consideration
		Number		Percent		Amount		Percent
						(in millions)
Current owners		17,800,000	(1)	62.9	%	$	83.3	31.8	%
New investors		10,500,000		37.1	%		178.5	68.2	%

	Total	28,300,000	(1)	100.0	%	$	261.8	100.0	%

(1): Includes management units, which are convertible into common units on a one-for-one basis at the election of the holders.

OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS

You should read the following discussion of our cash distribution policy in conjunction with the assumptions included in this section. For more detailed information regarding the factors and assumptions upon which our cash distribution policy is based, please read "Assumptions and Considerations" below. In addition, you should read "Forward-Looking Statements" and "Risk Factors" for information regarding statements that do not relate strictly to historical or current facts and material risks inherent in our and Buckeye's business.

For additional information regarding our historical and pro forma operating results, you should refer to our historical financial statements for the years ended December 31, 2003 and 2005 and the quarters ended March 31, 2006 and 2005, and for the periods January 1 to May 4, 2004 and May 4 to December 31, 2004, and our unaudited pro forma consolidated financial statements for the year ended December 31, 2005 and as of and for the quarter ended March 31, 2006, included elsewhere in this prospectus.

We do not as a matter of course make public projections as to future sales, earnings, or other results. However, our management has prepared the prospective and other financial information set forth below in the tables titled "Estimated Cash Available to Pay Distributions Based Upon Estimated Minimum Consolidated Adjusted EBITDA" and "Unaudited Pro Forma Consolidated Available Cash" in order to present the basis for our belief that we will be able to fully fund our initial quarterly cash distribution of $0.205 per unit for each of the four quarters ending June 30, 2007. The accompanying prospective and other financial information was not prepared with a view toward public disclosure or with a view toward complying with the published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, and were not prepared in accordance with accounting principles generally accepted in the United States of America nor were procedures applied to meet the auditing standards of the Public Company Accounting Oversight Board (United States). However, in the view of our management, the prospective and other financial information was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of our management's knowledge and belief our expected future financial performance. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this prospectus are cautioned not to place undue reliance on the prospective and other financial information.

Neither our independent registered public accounting firm, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

General

Rationale for Our Cash Distribution Policy. Our cash distribution policy reflects a basic judgment that our unitholders will be better served by our distributing our available cash rather than retaining it. It is important that you understand that our cash is generated primarily by our general partner interests in Buckeye. These general partner interests include primarily GP units and the incentive distribution rights in Buckeye from which we receive quarterly distributions. Our cash flow is, therefore, directly dependent upon the ability of Buckeye to make cash distributions to its partners. We currently have no independent operations and do not currently intend to conduct operations separate from those of Buckeye. Because we believe we will have relatively low cash requirements for operating expenses and that we will finance any material capital investments from

external financing sources, we believe that our investors are best served by our distributing all of our available cash as described below. Because we are not subject to an entity-level federal income or state tax, we expect to have more cash to distribute to you than would be the case were we subject to tax. Our distribution policy is consistent with our partnership agreement, which requires that we distribute all our available cash quarterly.

Restrictions and Limitations on Our Ability to Change Our Cash Distribution Policy. There is no guarantee that unitholders will receive quarterly distributions from us. Our distribution policy is subject to certain restrictions and may be changed at any time. These restrictions include the following:

•: Other than the obligation under our partnership agreement to distribute available cash on a quarterly basis, which is subject to our general partner's broad discretion to establish reserves and other limitations, our unitholders have no contractual or other legal right to receive distributions.
•: Buckeye's distribution policy is subject to restrictions on distributions under its credit agreement. Specifically, Buckeye's credit agreement contains material financial tests and covenants that it must satisfy. These financial tests and covenants are described in this prospectus under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Buckeye." Should Buckeye be unable to comply with the restrictions under its credit agreement, Buckeye would be prohibited from making cash distributions to us, which in turn could prevent us from making cash distributions to you notwithstanding our stated distribution policy.
•: Similar to Buckeye's distribution policy, our distribution policy will be subject to certain restrictions on distributions under our anticipated credit facility and future debt agreements. The financial tests and covenants in our anticipated credit facility are described in this prospectus under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Buckeye GP Holdings L.P." Should we be unable to satisfy these restrictions under our debt agreements, we would be prohibited from making a distribution to you notwithstanding our stated distribution policy.
•: The board of directors of Buckeye's general partner has broad discretion to establish reserves for the prudent conduct of Buckeye's business and for future cash distributions to Buckeye's unitholders, and the establishment of those reserves could result in a reduction in cash distributions that we would otherwise anticipate receiving from Buckeye, which in turn could result in a reduction in cash distributions to you from levels we currently anticipate.
•: Our general partner's board of directors has broad discretion to establish reserves for the prudent conduct of our business and the establishment of those reserves could result in a reduction in cash distributions to you from levels we currently anticipate.
•: While our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including our cash distribution policy contained therein, may be amended by a vote of the holders of a majority of our common units and management units, voting together as a class.
•: Even if our cash distribution policy is not modified or revoked, the amount of distributions paid under our cash distribution policy and the decision to make any distribution is at the discretion of our general partner, taking into consideration the terms of our partnership agreement.

•: The amount of distributions paid under Buckeye's cash distribution policy and the decision to make any distribution to its partners are at the discretion of Buckeye's general partner.
•: Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, Buckeye may not make a distribution to us and we may not make a distribution if such distribution would cause Buckeye's or our liabilities, respectively, to exceed the fair value of Buckeye's or our assets, as applicable.
•: We may lack sufficient cash to pay distributions to our unitholders due to increases in general and administrative expenses, principal and interest payments on our outstanding debt, tax expenses of our subsidiaries, working capital requirements and anticipated cash needs of us or Buckeye.

Our Cash Distribution Policy Limits Our Ability to Grow. As with most other publicly traded partnerships, because we distribute all of our available cash, our growth may not be as fast as businesses that reinvest their available cash to expand their operations. In fact, because our cash is generated by our general partner interests in, including the right to receive incentive distributions based upon levels of LP unit distributions from, Buckeye, our growth will be directly dependent upon Buckeye's ability to increase its quarterly cash distributions on its LP units. If we issue additional units or incur debt, the payment of distributions on those additional units or interest on that debt could increase the risk that we will be unable to maintain or increase our per unit distribution level.

Buckeye's Ability to Grow is Dependent on its Ability to Access External Growth Capital. Buckeye has historically distributed most of the cash generated by its operations to its partners. As a result, Buckeye has relied upon external financing sources, including commercial borrowings and other debt and LP unit issuances, to fund its acquisition and growth capital expenditures. Accordingly, to the extent Buckeye is unable to finance growth externally, its ability to grow will likely be impaired because it distributes substantially all of its available cash. To the extent Buckeye issues additional LP units and maintains or increases its distribution level per LP unit, the available cash that we have to distribute to our unitholders will increase. If Buckeye issues additional LP units and is unable to maintain its distribution level per LP unit, the cash that we have to distribute to our unitholders could decrease. The incurrence of additional debt to finance its growth strategy would result in increased interest expense to Buckeye, which in turn may impact its distributions to us and the available cash that we have to distribute to our unitholders.

Our Initial Quarterly Distribution

Our Cash Distribution Policy. Upon the closing of this offering, the board of directors of our general partner will adopt a policy pursuant to which we will declare an initial quarterly distribution of $0.205 per unit, or $0.82 per unit on an annualized basis, to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses. This equates to an aggregate cash distribution of approximately $5.8 million per quarter, or $23.2 million per year. Our pro forma available cash for the year ended December 31, 2005 and the twelve months ended March 31, 2006 would have been sufficient to pay 74.3% and 69.9%, respectively, of the full initial distribution amount on our units during these periods. We will pay our distributions within 75 days after the end of each quarter ending March, June, September and December to holders of record on or about the first of the month in which the distribution is paid. If the distribution date does not fall on a business day, we will make the distribution on the business day immediately preceding the indicated distribution date.

Any distributions received by us from Buckeye related to periods prior to the closing of this offering will be distributed entirely to our current equity owners. In November 2006, we will pay a

distribution to our unitholders equal to the initial quarterly distribution prorated for the portion of the quarter ending September 30, 2006 that we are public.

The following table sets forth the assumed number of outstanding common units and management units (which are convertible into common units on a one-for-one basis) upon the closing of this offering, assuming the full exercise of the underwriters' option to purchase 1,575,000 additional common units, the redemption of 1,575,000 units from our current equity owners and the aggregate distribution amounts payable on our outstanding units during the first four quarters following the closing of this offering at our initial quarterly distribution of $0.205 per unit, or $0.82 per unit on an annualized basis.

			Distributions
		Number of Units(1)	Distributions
		Number of Units(1)	One Quarter		Four Quarters
Publicly held common units		12,075,000	$	2,475,375	$	9,901,500
Units held by our current owners		16,225,000		3,326,125		13,304,500

	Total	28,300,000	$	5,801,500	$	23,206,000

(1): Includes the outstanding management units, which are convertible into common units on a one-for-one basis at the election of the holder. Each management unit is entitled to receive the same cash distribution per quarter as each common unit.

Our distributions will not be cumulative. Consequently, if we do not pay distributions on our units with respect to any fiscal quarter at the anticipated initial quarterly distribution, our unitholders will not be entitled to receive such payments in the future.

Our distribution policy is consistent with the terms of our partnership agreement, which requires that we distribute all of our available cash quarterly. Under our partnership agreement, available cash is defined to mean generally, for each fiscal quarter, cash generated from our business in excess of the amount our general partner determines is necessary or appropriate to provide for the conduct of our business, to comply with applicable law, to comply with any of our debt instruments or other agreements or to provide for future distributions to our unitholders for any one or more of the upcoming four quarters.

Buckeye's Cash Distribution Policy. Buckeye has not formally adopted a cash distribution policy that requires it to distribute its available cash to its partners on a quarterly or other basis and could determine not to make a distribution of its available cash on a quarterly or other basis. However, Buckeye has historically distributed its available cash to its partners on a quarterly basis. Buckeye's determination of available cash takes into account the need to maintain certain cash reserves to preserve its distribution levels across seasonal and cyclical fluctuations in its business and to provide for certain growth opportunities. Buckeye makes its quarterly distributions from cash generated from its operations, and those distributions have grown over time as its business has grown, primarily as a result of numerous acquisitions and organic expansion projects that have been funded through external financing sources and cash from operations.

The following table sets forth, for the periods indicated, the amount, record date and payment date of the quarterly cash distributions paid or to be paid by Buckeye for each of its LP units with respect to the quarter indicated. The actual cash distributions by Buckeye to its partners typically occur within 60 days after the end of each quarter. Buckeye has an established historical record of paying quarterly cash distributions to its partners, having paid a quarterly distribution every quarter

since its initial public offering in 1986, and it has never reduced its quarterly distribution, as adjusted for LP unit splits.

		Cash Distribution History
		Per LP Unit		Record Date	Payment Date
Year ended December 31, 2003
	First quarter	$	0.6375	May 6, 2003	May 30, 2003
	Second quarter		0.6375	August 6, 2003	August 29, 2003
	Third quarter		0.6375	November 5, 2003	November 28, 2003
	Fourth quarter		0.6500	February 4, 2004	February 27, 2004
Year ended December 31, 2004
	First quarter	$	0.6500	May 5, 2004	May 28, 2004
	Second quarter		0.6625	August 9, 2004	August 31, 2004
	Third quarter		0.6750	November 8, 2004	November 30, 2004
	Fourth quarter		0.6875	February 7, 2005	February 28, 2005
Year ended December 31, 2005
	First quarter	$	0.7000	May 9, 2005	May 31, 2005
	Second quarter		0.7125	August 9, 2005	August 31, 2005
	Third quarter		0.7250	November 7, 2005	November 30, 2005
	Fourth quarter		0.7375	February 7, 2006	February 28, 2006
Year ending December 31, 2006
	First quarter	$	0.7500	May 8, 2006	May 31, 2006
	Second quarter		0.7625	August 4, 2006	August 31, 2006

In the sections that follow, we present in detail the basis for our belief that we will be able to fully fund our initial quarterly cash distribution of $0.205 per unit each of the four quarters ending June 30, 2007. In those sections, we assume that the underwriters have exercised their option to purchase additional common units in full. In addition we present the following two tables, including:

•

"Estimated Cash Available to Pay Distributions Based Upon Estimated Minimum Consolidated Adjusted EBITDA," in which we present the operating assumptions for the twelve months ending June 30, 2007, which we believe will enable us to fully fund our expected distribution for that period; and

•

"Unaudited Pro Forma Consolidated Available Cash," in which we present the amount of available cash we would have had for the year ended December 31, 2005 and the twelve months ended March 31, 2006, giving pro forma effect to the following transactions as if these transactions had occurred on January 1, 2005:

•: Buckeye's current quarterly cash distribution of $0.75 per LP unit, or $3.00 per unit on an annualized basis;
•: Buckeye's acquisition of certain Northeastern pipeline and terminal assets in May 2005 and an approximately 350-mile natural gas liquids pipeline in January 2006;
•: the sale by Buckeye of 1.1 million LP units in February 2005, 2.5 million LP units in May 2005, $125 million principal amount of its 5.125% Notes due 2017 in June 2005 and 1.5 million LP units in March 2006 and the application of the net proceeds therefrom; and
•: this offering and the application of the net proceeds as described under "Use of Proceeds."

The calculation of Unaudited Pro Forma Consolidated Available Cash does not include pro forma impact adjustments to income (net of incremental pro forma maintenance capital expenditure

adjustments) related to selected smaller asset acquisitions and expansion projects completed by Buckeye in the year ended December 31, 2005 and the twelve months ended March 31, 2006, in the total amount of $80.5 million and $88.0 million, respectively. However, the calculation includes the pro forma impact of debt and LP unit financings that Buckeye completed and the application of the net proceeds to fund these acquisitions and expansion projects.

Because we own and control Buckeye's general partner, we reflect our ownership interest in Buckeye on a consolidated basis, which means that our financial results are consolidated with those of Buckeye and its general partner. Our financial statements also include those of Buckeye Pipe Line Services Company.

Estimated Minimum Consolidated Adjusted EBITDA

In the table below titled "Estimated Cash Available to Pay Distributions Based Upon Estimated Minimum Consolidated Adjusted EBITDA," we estimate that our Consolidated Adjusted EBITDA for the twelve months ending June 30, 2007 must be no less than $224.0 million in order to permit us to fund our initial quarterly cash distribution of $0.205 per unit for each of the four quarters in the twelve months ending June 30, 2007. We refer to this amount as our "Estimated Minimum Consolidated Adjusted EBITDA." This amount represents the minimum Consolidated Adjusted EBITDA required to permit distributions from Buckeye to us sufficient to allow us to pay our initial quarterly cash distribution for that period. We have estimated that if our Consolidated Adjusted EBITDA meets or exceeds this amount, we will have sufficient cash available to pay our initial quarterly cash distribution for the four quarters in the twelve months ending June 30, 2007, and additionally that Buckeye will not be restricted under its credit agreement from paying sufficient cash distributions to us to enable us to make distributions to our unitholders at that level.

Consolidated Adjusted EBITDA is defined as income before income taxes, interest expense (including write-off of deferred financing costs), interest of non-controlling partners in Buckeye's net income and depreciation and amortization expense. Similarly, changes in working capital accounts are not included in Consolidated Adjusted EBITDA.

Consolidated Adjusted EBITDA should not be considered an alternative to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated in accordance with accounting principles generally accepted in the United States as these items are used to measure operating performance, liquidity or ability to service debt obligations.

In calculating our Estimated Minimum Consolidated Adjusted EBITDA, we have included estimated consolidated maintenance and expansion capital expenditure estimates for the twelve-month period ending June 30, 2007. Maintenance capital expenditures are capital expenditures made on an ongoing basis to maintain current operations, which do not increase operating capacity or revenues from existing levels. Expansion capital expenditures consist of capital expenditures we expect Buckeye to make to expand the operating capacity and revenues of its current operations.

Our estimate of $224.0 million in minimum Consolidated Adjusted EBITDA for the twelve months ending June 30, 2007 is intended to be an indicator or benchmark of the amount management considers to be the lowest amount of Consolidated Adjusted EBITDA needed to generate sufficient available cash to permit us to make cash distributions to our unitholders at our initial quarterly distribution of $0.205 per unit (or $0.82 per unit on an annualized basis, excluding any prorating of our distribution for the first quarter in 2006 in which we are publicly traded). Our estimate of Consolidated Adjusted EBITDA should not be viewed as management's projection of actual operating earnings or cash generation of us or Buckeye.

You should read "—Assumptions and Considerations" and the footnotes to the table below for a discussion of the material assumptions underlying our belief that we will be able to generate our Estimated Minimum Consolidated Adjusted EBITDA. These assumptions reflect our judgment of conditions we expect to exist and the course of action we expect to take. While we believe that these assumptions are reasonable in light of our current expectations regarding future events, the assumptions underlying our Estimated Minimum Consolidated Adjusted EBITDA are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those we anticipate. If our assumptions are not realized, the actual available cash that we generate could be substantially less than that currently expected and could, therefore, be insufficient to permit us to make distributions on our units at the initial quarterly distribution, or at any level, in which event the market price of our common units may decline materially. Consequently, the statement that we believe that we will have sufficient available cash to pay the initial quarterly distribution on our units for the four consecutive quarters ending June 30, 2007 should not be regarded as a representation by us or the underwriters or any other person that we will declare and make such a distribution.

When reading this section, you should keep in mind the risk factors and other cautionary statements under the heading "Risk Factors" in this prospectus. Any of these factors or the other risks discussed in this prospectus could cause our financial condition and consolidated results of operations to vary significantly from those set forth in "Estimated Cash Available to Pay Distributions Based Upon Estimated Minimum Consolidated Adjusted EBITDA" below.

Buckeye GP Holdings L.P.
Estimated Cash Available to Pay Distributions Based Upon Estimated Minimum Consolidated Adjusted EBITDA

		Twelve Months Ending June 30, 2007
		(dollars in thousands except per unit data)
Estimated Net Cash Provided By Operating Activities		$	173,903
Plus:
	Interest expense(a)		55,034
	Earnings of equity investments(b)		5,443
	Income tax expense(c)		1,100
Less:
	Distributions received from equity investments(d)		(5,744	)
	Value of Services Company shares released(e)		(4,862	)
	Amortization of deferred compensation — Management Units(f)		(700	)
	Amortization of fair value of option grants(g)		(213	)

Estimated Minimum Consolidated Adjusted EBITDA(h)			223,961
Less:
	Interest expense(a)		(55,034	)
	Earnings of equity investments(b)		(5,443	)
	Income tax expense(c)		(1,100	)
	Repayment of ESOP Notes(i)		(6,105	)
	Maintenance capital expenditures(j)		(30,000	)
	Expansion capital expenditures(k)		(50,000	)
	Distributions to minority interest holders in Buckeye subsidiaries(l)		(3,556	)
	Distributions to non-affiliated owners of Buckeye(m)		(111,036	)
Plus:
	Distributions received from equity investments(d)		5,744
	Value of Services Company shares released(e)		4,862
	Amortization of deferred compensation — Management Units(f)		700
	Amortization of fair value of option grants(g)		213
	Borrowings for expansion capital expenditures(n)		50,000

Estimated Available Cash of Buckeye GP Holdings L.P.		$	23,206

Expected Cash Distributions by Buckeye GP Holdings L.P.
	Expected annual cash distribution per unit	$	0.82

	Distributions to our public common unitholders (based on 12.075 million public units outstanding)	$	9,902
	Distributions to common units and management units held by our existing equity owners		13,305

	Total distributions paid to our unitholders(o)	$	23,206

Debt Covenant Ratios
	Buckeye Funded Debt Ratio(p)		4.36	x
	Buckeye Fixed Charge Coverage Ratio(p)		2.79	x
	Buckeye GP Holdings L.P. Leverage Ratio(q)		0.03	x
	Buckeye GP Holdings L.P. Consolidated Funded Debt Ratio(q)		4.54	x

(a)

Our estimated consolidated cash interest expense assumes cash interest expense for the twelve months ending June 30, 2007 to be approximately $55.0 million. Our cash interest is comprised of the following components:

(1): Approximately $13.875 million associated with Buckeye's $300.0 million of 4.625% senior unsecured notes.
(2): Approximately $10.125 million associated with Buckeye's $150.0 million of 6.75% senior unsecured notes.
(3): Approximately $14.575 million associated with Buckeye's $275.0 million of 5.30% senior unsecured notes.
(4): Approximately $6.406 million associated with Buckeye's $125.0 million of 5.125% senior unsecured notes.
(5): Approximately $1.469 million associated with the Buckeye 3.6% (5.135% effective) ESOP Notes ($28.6 million average principal amount outstanding).
(6): Approximately $8.528 million, including the annual commitment fee, related to borrowings under Buckeye's current revolving credit agreement, including an additional $27.1 million in average borrowings primarily related to expansion capital expenditures. For purposes of calculating our estimated consolidated interest expense, we assume that the expected $50 million in expansion capital expenditures is borrowed in equal amounts over the twelve month period which results in an average balance of $27.1 million (See note (n) below). We assume that outstanding balances under the revolving credit facility will bear interest at 5.65%.
(7): Approximately $0.056 million, including the annual commitment fee, related to borrowings under an anticipated credit facility. For purposes of calculating our estimated consolidated cash interest expense we assume an average balance outstanding of $0.77 million to fund expected working capital needs. We assume that outstanding balances under the anticipated credit facility will bear interest at 5.65%

(b)

Represents expected equity earnings from Buckeye's minority investments in West Texas LPG Pipeline, West Shore Pipe Line Company and Muskegon Pipeline LLC for the twelve months ending June 30, 2007.

(c)

For federal and state income tax purposes, Buckeye and its operating subsidiaries, except for BGC, are non-taxable entities. Our estimated income tax expense for the twelve months ending June 30, 2007 is the result of the federal income tax obligations of BGC.

(d)

Represents the expected distributions received from Buckeye's minority investments in West Texas LPG Pipeline, West Shore Pipe Line Company and Muskegon Pipeline LLC for the twelve months ending June 30, 2007.

(e)

Represents the expected fair value of Buckeye Pipeline Services Company shares allocated to participants in its Employee Stock Ownership Plan for the twelve months ending June 30, 2007.

(f)

Represents the expected amortization of the fair value of the Management Units which were issued to certain members of management for no consideration. The estimated fair value of the Management Units is being amortized over the vesting period. The Company has not included a one-time charge of approximately $4.0 million to be incurred upon consummation of the offering related to the exchange of MainLine's Class B Units for the Management Units.

(g)

Represents the expected amortization related to the option grants that will be recognized on a straight-line basis over the requisite service period for the twelve months ending June 30, 2007.

(h)

We believe that our Estimated Minimum Consolidated Adjusted EBITDA for the twelve months ending June 30, 2007 will be approximately $224.0 million. Our Estimated Minimum Consolidated Adjusted EBITDA is approximately $16.4 million and $15.5 million more than the

pro forma Consolidated Adjusted EBITDA we would have generated for the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively. See "Unaudited Pro Forma Consolidated Available Cash." Our ability to generate this Estimated Minimum Consolidated Adjusted EBITDA is based on our expectation that Buckeye will benefit from recent acquisitions, various new capital asset projects and continued improvement in operating performance relative to historical periods. Please read "Assumptions and Considerations" for more detailed information regarding these assumptions. Estimated Minimum Consolidated Adjusted EBITDA reflects the incremental general and administrative expenses of approximately $1.6 million that we expect to incur as a result of becoming a public company.

(i): Reflects $6.1 million scheduled principal payments under Buckeye's ESOP Notes (See note (m) below).
(j): We currently expect that our consolidated maintenance capital expenditures will be approximately $30.0 million for the twelve months ending June 30, 2007 in comparison to $23.4 million and $26.3 million in the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively. The expected increase in maintenance capital expenditures primarily reflects the impact of a larger asset base and the deferral of certain maintenance capital expenditures during 2005.
(k): Reflects anticipated expenditures by Buckeye of $50.0 million for expansion capital for the twelve months ending June 30, 2007, as compared to $54.4 million and $48.3 million in the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively. The estimated expansion capital expenditures for the twelve months ended June 30, 2007 relates primarily to already identified capacity expansion and cost reduction projects.
(l): Reflects distributions to holders of minority interests in subsidiaries of Buckeye.
(m): Reflects cash distributions from Buckeye to its unitholders other than us based upon the most recent quarterly distribution of $0.75 per unit or $3.00 per unit on an annualized basis. Distributions to Services Company on its LP units (2,336,830 as of April 30, 2006) are not included in distributions to non-affiliated owners of Buckeye. Distributions on the LP units owned by Services Company are used to fund the interest and scheduled principal payments on the ESOP Notes, partially offsetting that expense. Any shortfall between the distribution that Services Company receives on its LP units and amounts currently due under the ESOP Notes is paid by Buckeye as an ESOP related expense.
(n): Reflects borrowings to fund $50.0 million of expansion capital for the twelve months ending June 30, 2007. Borrowings related to the $50.0 million of expansion capital are assumed to occur ratably throughout the twelve-month period. While Buckeye may use other financing sources to finance internal growth, including equity issuances, cash on hand or debt sources other than borrowings under its revolving credit facility, we have assumed for purposes of calculating Minimum Consolidated Adjusted EBITDA that they will be financed with borrowings under Buckeye's revolving credit facility. (See note (a)(6) above).
(o): Represents the amount required to fund distributions to our unitholders for four quarters, based upon our initial cash distribution rate of $0.205 per unit ($0.82 per unit annually). The total amount of distributions paid does not reflect any prorating of our distribution for the first quarter in which we are publicly traded. Total may not add due to rounding.
(p): Under its current credit agreement, Buckeye is required to maintain a maximum "Funded Debt Ratio" and a minimum "Fixed Charge Coverage Ratio." The Funded Debt Ratio equals the ratio of the long-term debt of Buckeye at June 30, 2007 (including the current portion, if any) to its EBITDA (as defined in the credit agreement) for the twelve months ending June 30, 2007. As of the end of any fiscal quarter, the Funded Debt Ratio may not exceed 4.75 to 1.00, subject to a provision for increases to 5.25 to 1.00 in connection with future acquisitions. The Fixed Charge Coverage Ratio equals the ratio of EBITDA for the twelve months ending June 30, 2007 to the sum of payments for interest and principal on debt plus maintenance capital expenditures for the twelve months ending June 30, 2007. Buckeye is required to maintain a Fixed Charge Coverage Ratio of greater than 1.25 to 1.00 as of the end of any

fiscal quarter. As indicated in the table, Buckeye's Funded Debt Ratio and Fixed Charge Coverage Ratio would have been sufficient to satisfy the ratios required by Buckeye's credit agreements and permit the payment of Buckeye's intended distribution.

(q): Our anticipated credit facility will require us to maintain leverage and funded debt coverage ratios. The leverage ratio covenant will require us to maintain, as of the last day of each fiscal quarter, a ratio of our total funded indebtedness, measured as of the last day of each fiscal quarter, to the aggregate dividends and distributions received by us from Buckeye, plus all other cash received by us, measured for the preceding twelve months, less expenses, of not more than 2.50 to 1.00. The funded debt coverage ratio covenant will require us to maintain, as of the last day of each fiscal quarter, a ratio of total consolidated funded debt of us and Buckeye to consolidated EBITDA (to be defined in the Credit Facility) of us and Buckeye, measured for the preceding twelve months, of not more than 5.25 to 1.00, subject to a provision for increases to 5.75 to 1.00 in connection with future acquisitions.

Assumptions and Considerations

We believe that our general partner interests in Buckeye, including our incentive distribution rights, will generate sufficient cash flow to enable us to pay our initial quarterly distribution of $0.205 per unit on all of our outstanding units for each of the four quarters ending June 30, 2007. Our belief is based on a number of current assumptions that we believe to be reasonable over the next four quarters. While we believe that these assumptions are generally consistent with the actual performance of Buckeye and are reasonable in light of our current beliefs concerning future events, the assumptions are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those we anticipate. Consequently, the statement that we believe that we will have sufficient available cash to pay the initial quarterly distribution on our units for each quarter through June 30, 2007 should not be regarded as a representation by us or the underwriters or any other person that we will make any such distributions. When reading this section, you should keep in mind the risk factors and other cautionary statements under the heading "Risk Factors" in this prospectus.

We base our Estimated Minimum Consolidated Adjusted EBITDA on the following significant assumptions:

•: Buckeye will pay a quarterly cash distribution of $0.75 per Buckeye LP unit for each of the four quarters ending June 30, 2007, which quarterly distribution amount is equal to the most recently paid cash distribution of $0.75 per Buckeye LP unit for the quarter ended March 31, 2006, Buckeye will have 39.4 million LP units outstanding and Buckeye's subsidiary operating partnerships will distribute $1.1 million in respect of our approximate 1% general partner interest in such subsidiaries. As a result, we estimate that the gross amount of cash distributions that we receive from Buckeye will be $26.8 million during this period.
•: Buckeye will transport a minimum of 509.0 million barrels of petroleum products through its petroleum products pipeline systems at an average rate of not less than $0.61 per barrel transported for the twelve months ending June 30, 2007, as compared to the historical 505.7 million barrels transported at an average rate of $0.57 per barrel during the year ended December 31, 2005 and the historical 514.1 million barrels transported at an average rate of $0.57 per barrel during the twelve months ended March 31, 2006. A 1% increase or decrease in the level of volumes transported through its petroleum products pipeline system, holding all other variables constant, would result in an approximate $3.1 million increase or decrease in Estimated Minimum Consolidated Adjusted EBITDA.
•: Buckeye will have a minimum throughput of 168.9 million barrels at its terminals for the twelve months ending June 30, 2007, as compared to the historical 153.0 million barrels throughput at its terminals during the year ended December 31, 2005 and the historical

158.9 million barrels throughput during the twelve months ended March 31, 2006. The rates for the terminals for the twelve months ending June 30, 2007 will remain the same as those for the year ended December 31, 2005 and the twelve months ended March 31, 2006. A 1% increase or decrease in the level of throughput volumes at Buckeye's terminals, holding all other variables constant, would result in an approximate $0.7 million increase or decrease in Estimated Minimum Consolidated Adjusted EBITDA.

•: Buckeye's operating expenses and general and administrative expenses, excluding non-cash items, will be $206.6 million and $19.7 million, respectively, for the twelve months ending June 30, 2007, as compared to historical operating and general and administrative expenses, excluding non-cash items, of $192.1 million and $18.3 million, respectively, for the year ended December 31, 2005 and $196.8 million and $18.7 million, respectively, for the twelve months ended March 31, 2006.
•: Buckeye will realize operating income, including depreciation and amortization, of not less than $191.1 million from its petroleum products pipeline system, $33.4 million from its petroleum products terminals and $4.9 million from its other operations for the twelve months ending June 30, 2007, as compared to operating income, including depreciation and amortization, of $124.2 million from its petroleum products pipeline system, $29.7 million from its petroleum products terminals and $7.4 million from its other operations for the year ended December 31, 2005 and $126.9 million from its petroleum products pipeline system, $29.4 million from its petroleum products terminals and $8.0 million from its other operations for the twelve months ended March 31, 2006. Non-cash items included in operating income include amortization of long-term incentive compensation expense.
•: Buckeye's maintenance capital expenditures will not exceed $30.0 million for the twelve months ending June 30, 2007, as compared to maintenance capital expenditures of $23.4 million for the year ended December 31, 2005 and $26.3 million for the twelve months ended March 31, 2006.
•: Buckeye's expansion capital expenditures will not exceed $50.0 million for the twelve months ending June 30, 2007, as compared to expansion capital expenditures of $54.4 million for the year ended December 31, 2005 and $48.3 million for the twelve months ended March 31, 2006.
•: Buckeye will remain in compliance with the financial covenants in its existing and future debt agreements and its ability to pay distributions to us will not be encumbered.
•: We will remain in compliance with the financial covenants in our anticipated credit facility and future debt agreements.
•: The benchmark interest rate paid by Buckeye on its floating-rate debt will not exceed 5.65% on average during the period, and our consolidated cash interest expense will not exceed approximately $55.0 million for the twelve months ending June 30, 2007. A 100 basis point increase in the benchmark interest rate paid by Buckeye on its floating rate debt, holding all other variables constant, would result in an approximate $1.4 million increase in our consolidated cash interest expense.
•: Our general and administrative expenses, excluding one-time cash bonuses in connection with the closing of this offering, will not exceed $6.7 million for the twelve months ending June 30, 2007 which includes $1.6 million of incremental expenses associated with being a public company, as compared to $7.0 million for the year ended December 31, 2005 which included $1.6 million of non-recurring professional fees and other fees and expenses and $7.7 million for the twelve months ended March 31, 2006 which included $2.6 million of non-recurring professional and other fees and expenses. In connection with the closing of this

offering, we will pay one-time cash bonuses to officers of our general partner and to certain employees of Services Company. These bonuses will be an aggregate amount of $2.0 million and will be paid either from cash on hand immediately prior to the closing of the offering or from our current equity owners' portion of Buckeye's distribution to us in respect of the second quarter of 2006. Because the bonuses will be paid from cash that would otherwise be distributed to our current equity owners, the cash bonuses will have no effect on the amount of distributions on all of our outstanding units for each of the four quarters ending June 30, 2007.

•: There will not be any new federal, state or local regulation of the portions of the energy industry in which Buckeye operates, or interpretations of existing regulations, that will be materially adverse to our or Buckeye's business.
•: There will not be any material adverse change in the portions of the energy industry in which Buckeye operates resulting from supply or production disruptions, reduced demand for its products or services or from significant changes in the market prices of petroleum products or crude oil.
•: Market, regulatory, insurance and overall economic conditions will not change substantially.

Increases in pipeline volumes and terminal throughput for the twelve months ending June 30, 2007, compared to the year ended December 31, 2005 and the twelve months ended March 31, 2006, are expected to result from the impact of acquisitions and internal growth projects completed in 2005 and 2006, and increases in base demand for petroleum products. Expected increases in the average tariff rate per barrel associated with pipeline shipments are due to anticipated tariff rate increases to be implemented pursuant to FERC regulations. We cannot assure you that any of the assumptions summarized above, or any other assumptions upon which Estimated Minimum Consolidated Adjusted EBITDA is based, will prove to be correct. If the assumptions are incorrect, we may not have sufficient cash to make the contemplated distributions.

Unaudited Pro Forma Consolidated Available Cash

Our pro forma consolidated available cash for the year ended December 31, 2005 and the twelve months ended March 31, 2006 would not have been sufficient to pay the initial quarterly distribution of $0.205 per unit on all units to be outstanding following the completion of this offering. If we had completed the transactions contemplated in this prospectus on January 1, 2005, pro forma consolidated available cash would have been approximately $17.2 million and $16.2 million for the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively. These amounts would have been insufficient by approximately $6.0 million and $7.0 million to pay the full initial distribution amount on all our units for the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively. The pro forma consolidated available cash for the year ended December 31, 2005 and the twelve months ended March 31, 2006 would have been sufficient to pay 74.3% and 69.9%, respectively, of the full initial distribution amount on our units. Pursuant to the terms of our partnership agreement, our general partner would have had the discretionary authority to cause us to borrow funds under our credit facility to make up some, all or none of these shortfalls.

The following table illustrates, on a pro forma basis, for the year December 31, 2005 and for the twelve months ended March 31, 2006, the amount of available cash that would have been available for distributions to our unitholders, assuming that this offering had been consummated at the beginning of such period. Each of the pro forma adjustments presented below is explained in the footnotes to such adjustments.

Buckeye GP Holdings L.P.
Unaudited Pro Forma Consolidated Available Cash

		Year Ended December 31, 2005			Twelve Months Ended March 31, 2006
		(dollars in thousands except per unit data)
Net Cash Provided by Operating Activities(a)		$	150,937		$	147,838
Plus:
	Interest expense		55,366			57,998
	Earnings of equity investments(b)		5,303			5,443
	Income tax expense(c)		866			521
	Net effect of changes in operating accounts(d)		(4,853	)		1,562
Less:
	Amortization of fair value of option grants(e)		—			(172	)
	Distributions received from equity investments(f)		(3,764	)		(5,744	)
	Value of Services Company shares released(g)		(5,012	)		(4,862	)
	Amortization of deferred compensation — B Units(h)		(3,473	)		(2,238	)

Consolidated Adjusted EBITDA			195,370			200,346
Less:
	Additional expense of being a public company(i)		7			987
Plus:
	Pro forma acquisition adjustment to Consolidated EBITDA(j)		12,188			7,095

Pro Forma Consolidated Adjusted EBITDA			207,565			208,428
Less:
	Interest expense(k)		(52,711	)		(52,711	)
	Earnings of equity investments(b)		(5,303	)		(5,443	)
	Income tax expense(c)		(866	)		(521	)
	Maintenance capital expenditures(l)		(24,057	)		(26,557	)
	Expansion capital expenditures(m)		(54,400	)		(48,392	)
	Senior administrative charge(n)		(1,900	)		(1,900	)
	Repayment of ESOP Notes(o)		(5,622	)		(5,720	)
	Distributions to minority interest holders in Buckeye subsidiaries(p)		(1,084	)		(1,339	)
	Distributions paid by Buckeye to its limited partners(q)		(111,036	)		(111,036	)
Plus:
	Amortization of fair value of option grants(e)		—			172
	Distributions received from equity investments(f)		3,764			5,744
	Value of Services Company shares released(g)		5,012			4,862
	Deferred compensation expense — B Units(h)		3,473			2,238
	Borrowings for expansion capital expenditures(m)		54,400			48,392

Pro Forma Consolidated Available Cash at Buckeye GP Holdings L.P.		$	17,235		$	16,217

Expected Cash Distributions:
	Expected distribution per unit, on an annualized basis	$	0.82		$	0.82

	Distributions to public common unitholders (based on 12.075 million units outstanding)	$	9,902		$	9,902
	Distributions to common units and management units held by our existing holders		13,305			13,305

Total Distributions		$	23,206		$	23,206

Shortfall(r)		$	(5,971	)	$	(6,989	)

(a): Represents historical cash flow provided by operating activities derived from our historical consolidated financial statements for the period indicated. The historical data does not give effect to the pro forma adjustments explained in the notes below.
(b): Represents historical equity earnings from Buckeye's minority investments in West Texas LPG Pipeline, West Shore Pipe Line Company and Muskegon Pipeline LLC.
(c): For federal and state income tax purposes, Buckeye and its operating subsidiaries, except for BGC, are non-taxable entities. Our annual income tax expense is the result of the federal income tax obligations of BGC.
(d): Represents historical consolidated changes in operating accounts resulting primarily from timing differences between the actual cash settlement and the accrual of assets and liabilities during the accounting period.
(e): Represents the fair value measurement and recognition provisions of Statement of Financial Accounting Standards 123 (revised 2004) which was adopted effective January 1, 2006 using the modified prospective basis transition method. Under this method, compensation expense recognized in the first quarter of fiscal year 2006 includes: (a) compensation expense for all option grants made prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123, and (b) compensation expense for all grants made on or after January 1, 2006, based on the grant date fair value estimated using the Black-Scholes option pricing model. Compensation expense related to the option grants will be recognized on a straight-line basis over the requisite service period.
(f): Represents historical distributions received from Buckeye's minority investments in West Texas LPG Pipeline, West Shore Pipe Line Company and Muskegon Pipeline LLC.
(g): Represents the fair value of Buckeye Pipe Line Services Company shares allocated to participants in its Employee Stock Ownership Plan.
(h): Represents amortization of the fair value of MainLine L.P.'s 16,216,668 B Units which were issued to certain members of senior management for no consideration. The estimated fair value of the B Units is being amortized to expense over the vesting period.
(i): Represents an estimate of the additional annual expense associated with being a public company offset by a reduction in professional fees incurred in connection with this offering and other fees and expenses that will not recur on a continuing basis. Total additional annual expense of being a public company is estimated to be $1.6 million. Professional fees and other fees and expenses incurred in the year ended December 31, 2005 and the twelve months ended March 31, 2006 and not expected to recur in future periods are estimated to be $1.6 million and $2.6 million, respectively.
(j): Represents the pro forma adjustments related to Buckeye's acquisition of certain Northeastern pipelines and terminals in May 2005 and the natural gas liquids pipeline in January 2006. The pro forma results are based on analyses we prepared prior to the acquisitions and on unaudited information obtained from the sellers of the assets and reflect our best estimate of the additional income that would have been realized had the acquisitions occurred on January 1, 2005. The calculation of Unaudited Pro Forma Consolidated Available Cash does not include pro forma adjustments related to selected smaller asset acquisitions and expansion projects completed by Buckeye in the year ended December 31, 2005 and the twelve months ended March 31, 2006, in the total amount of $80.5 million and $88.0 million,

respectively. The following is a summary of the pro forma adjustments for the year ended December 31, 2005 and the twelve months ended March 31, 2006:

				Pro forma Adjustments to:
				Year Ended December 31, 2005			Twelve Months Ended March 31, 2006
				(in thousands)
Northeastern pipeline and terminal assets acquired in May 2005:
	Revenues			$	8,664		$	2,426
	Expenses excluding depreciation				(4,311	)		(1,207	)

		Adjusted EBITDA			4,353			1,219

Natural gas liquids pipeline assets acquired in January 2006:
	Revenues				11,162			8,372
	Expenses excluding depreciation				(3,327	)		(2,496	)

		Adjusted EBITDA			7,835			5,876

			Total acquisition adjustments to Adjusted EBITDA	$	12,188		$	7,095

(k): Represents pro forma cash interest expense adjustments assuming that MainLine's Term Loan was repaid in full from the proceeds of this offering on January 1, 2005, that all interest rate hedges associated with the Term Loan were terminated and that other outstanding debt and associated interest rates had been in effect for the entire period indicated. Pro forma cash interest expense on outstanding debt at March 31, 2006 (excluding the Term Loan) was as follows:

Description		Principal Outstanding at March 31, 2006		Pro Forma Interest Expense
		(in thousands)
5.30% Notes		$	275,000	$	14,575
5.125% Notes			125,000		6,406
4.625% Notes			300,000		13,875
6.75% Notes			150,000		10,125
3.60% (5.135% effective) ESOP Notes			30,906		1,587
Revolving Credit Facility (5.63%)			100,000		5,630
Commitment fees			—		513

	Total	$	980,906	$	52,711

(l): Represents pro forma maintenance capital expenditures. The amount shown for the year ended December 31, 2005 reflects actual maintenance capital expenditures and $0.4 million of pro forma maintenance capital expenditures related to the acquisition of certain Northeastern pipelines and terminals in May 2005 and $0.2 million of pro forma maintenance capital expenditures for the natural gas liquids pipeline acquired in January 2006. The amount shown for the twelve months ended March 31, 2006 includes actual historical maintenance capital expenditures for that period and $0.1 million of pro forma maintenance capital expenditures relating to the acquisition of certain Northeastern pipelines and terminals in May 2005 and $0.1 million of pro forma maintenance capital expenditures for the natural gas liquids pipeline acquired in January 2006.
(m): Represents historical expenditures for expansion and cost reduction capital projects. During the year ended December 31, 2005 and the twelve months ended March 31, 2006, Buckeye expended

$33.7 million and $25.7 million, respectively, on an approximately 11-mile pipeline and associated terminal to serve Federal Express at the Memphis International Airport. This project is being implemented by WesPac Pipelines-Memphis, LLC, a 75%-owned affiliate of Buckeye. The pipeline and terminal construction project is supported by a long-term throughput and deficiency agreement entered into between WesPac Pipelines-Memphis, LLC and Federal Express. The project was commissioned and entered commercial service on April 1, 2006. Also in the year ended December 31, 2005, Buckeye expended approximately $9.3 million to complete a major expansion of the Laurel pipeline across Pennsylvania. The project involved the construction of two new pump stations and the expansion of an existing pump station. The project increased the capacity of the pipeline by approximately 17%. The remaining $11.4 million and $22.7 million of expansion and cost reduction capital expended in the year ended December 31, 2005 and the twelve months ended March 31, 2006, respectively, related to various other expansion and cost reduction projects.

(n): Represents a senior administrative charge that historically was paid to us in 2005 for services provided in connection with business development opportunities, financing strategies, insurance, investment banking and corporate development advice. Following the offering the senior administrative charge will be paid to our general partner. The senior administrative charge is an annual amount not less than $975,000 approved by the board of directors of Buckeye GP LLC. For 2005 and 2006 the board of directors of Buckeye GP LLC approved the senior administrative charge in the amount of $1.9 million.
(o): Represents actual repayments of principal by Buckeye Pipe Line Services Company under its 3.6% (5.135% effective) ESOP Notes.
(p): Reflects distributions to holders of minority interests in subsidiaries of Buckeye.
(q): Represents pro forma cash distributions from Buckeye to its unitholders other than us based upon the most recent quarterly distribution of $0.75 per unit or $3.00 per unit on an annualized basis. Distributions to Services Company on its LP units (2,336,830 as of April 30, 2006) and to MainLine Sub LLC on its LP units (80,000 as of April 30, 2006) are not included in distributions to non-affiliated owners of Buckeye. Distributions on the LP units owned by Services Company are used to fund the interest and scheduled principal payments on the ESOP Notes, partially offsetting that expense. Any shortfall between the distribution that Services Company receives on its LP units and amounts currently due under the ESOP Notes is paid by Buckeye as an ESOP related expense.
(r): Pursuant to the terms of our partnership agreement, our general partner would have the discretionary authority to cause us to borrow funds under our credit facility to make up some, all or none of these shortfalls.

HOW WE MAKE CASH DISTRIBUTIONS

Set forth below is a summary of the significant provisions of our partnership agreement that relate to cash distributions and an explanation of our sources of distributable cash.

General

Our partnership agreement requires that, within 75 days after the end of each quarter, beginning with the quarter ending September 30, 2006, we distribute all of our available cash to the holders of record of our common units and management units on the applicable record date.

Definition of Available Cash

Available cash is defined in our partnership agreement and generally means, with respect to any calendar quarter, all cash on hand at the date of determination of available cash for the distribution in respect of such quarter, less the amount of cash reserves necessary or appropriate, as determined in good faith by our general partner, to:

•: satisfy general, administrative and other expenses and debt service requirements;
•: permit Buckeye GP LLC or MainLine to make capital contributions to Buckeye or the operating partnerships if we choose to maintain our general partner interests upon the issuance of additional partnership securities by Buckeye or capital contributions by Buckeye to the operating partnerships;
•: comply with applicable law or any debt instrument or other agreement;
•: provide funds for distributions to unitholders in respect of any one or more of the next four quarters; and
•: otherwise provide for the proper conduct of our business.

Units Eligible for Distributions

As of the closing of this offering, we will have 26,938,000 common units and 1,362,000 management units outstanding. Each common unit and management unit will be allocated a portion of our income, gain, loss, deduction and credit on a pro rata basis, and each unit will be entitled to receive distributions (including upon liquidation) in the same manner as each other unit. Each management unit is convertible into one common unit at the election of the holder of the management unit. 30% of the management units are subject to vesting, with 10% vesting on May 4, 2007, 2008 and 2009.

General Partner Interest

Our general partner owns a non-economic, managing general partner interest in us, which does not entitle it to receive cash distributions. However, our general partner may own common units or other equity securities in us and is entitled to receive cash distributions on any such interests. Our general partner currently owns 2,830 common units and will be entitled to receive distributions and allocations on these common units in the same manner as the owners of other common units.

Adjustments to Capital Accounts

We will make adjustments to capital accounts of the common units upon the issuance of additional common units. In doing so, we will allocate any unrealized and, for tax purposes, unrecognized 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 adjustments to the capital accounts upon the issuance of additional units, we will allocate any later negative adjustments to the capital accounts resulting from the issuance of additional units or upon our liquidation in a manner which results, to the extent possible, in the general partner's capital account balances equaling the amount which they would have been if no earlier positive adjustments to the capital accounts had been made.

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 liquidation. We will first apply the proceeds of liquidation to the payment of our creditors in the order of priority provided in the partnership agreement and by law and, thereafter, we will distribute any remaining proceeds to the holders of common and management units and to our general partner in accordance with their respective capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.

Distribution of Amounts Related to Pre-Closing Periods

Any distributions received by us from Buckeye related to the period prior to the closing of the offering, together with any cash we have on hand prior to the closing of the offering, will be distributed entirely to our current equity owners. In November 2006 we will pay a distribution to our current equity owners equal to the initial quarterly distribution prorated for the portion of the quarter ending September 30, 2006 that we are not public and another distribution to all of our unitholders equal to the initial quarterly distribution prorated for the portion of the quarter ending September 30, 2006 that we are public.

Our Sources of Distributable Cash

Our primary cash-generating assets are our general partner interests, including the incentive distribution rights, in Buckeye. Therefore, our cash flow and resulting ability to make distributions will be completely dependent upon the ability of Buckeye to make distributions in respect of those interests. The actual amount of cash that Buckeye will have available for distribution will primarily depend on the amount of cash it generates from its operations. The actual amount of this cash will fluctuate from quarter to quarter based on certain factors, including:

•: the level of capital expenditures Buckeye makes;
•: the availability, if any, and cost of acquisitions;
•: debt service requirements;
•: fluctuations in working capital needs;
•: Buckeye's ability to borrow under its revolving credit agreement to make distributions;
•: prevailing economic conditions; and
•: the amount, if any, of cash reserves established by Buckeye's general partner in its discretion for the proper conduct of Buckeye's business.

Our Interest in Buckeye

Our cash flows consist of distributions from Buckeye on the general partner interests we own, which consist of the following:

•

243,914 GP units in Buckeye (representing approximately 0.6% of Buckeye's outstanding units);

•

the incentive distribution rights described below; and

•

approximately a 1% general partner interest in each of the following Buckeye subsidiaries:

•: Buckeye Pipe Line
•: Laurel
•: Everglades
•: BPH.

We also own 80,000 LP units, representing a de minimis limited partner interest in Buckeye.

Incentive Distribution Rights

The right of Buckeye GP LLC, our wholly owned subsidiary, to receive incentive distributions is a general partner interest which provides that if a quarterly cash distribution to Buckeye's LP units exceeds a target of $0.325 per LP unit, Buckeye will pay Buckeye GP LLC, for each outstanding LP unit (other than 2,573,146 LP units described below), an incentive distribution equal to:

(1): 15% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.325 but is not more than $0.35, plus
(2): 25% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.35 but is not more than $0.375, plus
(3): 30% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.375 but is not more than $0.40, plus
(4): 35% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.40 but is not more than $0.425, plus
(5): 40% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.425 but is not more than $0.525, plus
(6): 45% of the amount, if any, by which the quarterly distribution per eligible LP unit exceeds $0.525.

Our incentive distribution rights in Buckeye are expressed in a different manner from those in most other publicly traded partnerships. While incentive distribution rights in a typical publicly traded partnership are expressed as a percentage of total distributions from the partnership to all partners (the limited partner unit distributions, the general partner distributions, and the incentive distributions), our incentive distributions are expressed as a percentage of the cash distributions made to the limited partners of Buckeye in respect of their LP units. Moreover, 2,573,146 LP units originally issued by Buckeye to its Employee Stock Ownership Plan are not eligible for calculating our incentive distributions. These ineligible LP units currently constitute approximately 6% of all Buckeye LP units. Accordingly, when we say that we receive up to 45% of the amount of cash distributed by Buckeye with respect to eligible LP units, this means that we receive up to 45% of the amount of incremental cash distributed above the highest target distribution level ($0.525 per LP unit) to Buckeye LP units excluding the 2,573,146 LP units. This results in us receiving incentive

distributions equal to, currently, 29.5% of the aggregate amount of distributions to Buckeye's partners (including all LP units, GP units and the incentive distributions), above the highest target distribution level ($0.525 per LP unit). If Buckeye issues additional LP units, the LP units that are ineligible for incentive distributions will decrease as a percentage of total units of Buckeye, and the incentive distributions will result in a larger percentage (up to a hypothetical maximum of approximately 31%) of total distributions. The following table illustrates the percentage allocations of distributions among the owners of Buckeye, including us, at the target distribution levels.

		Distributions to Us as a Percentage of Total Distributions(2)
Buckeye Quarterly Distribution Per LP Unit	Distributions to Owners of LP Units as a Percentage of Total Distributions(1)	GP Units	Incentive Distributions
up to $0.325	99.4%	0.6%	0.0%
above $0.325 up to $0.350	87.2%	0.5%	12.1%
above $0.350 up to $0.375	80.7%	0.5%	18.8%
above $0.375 up to $0.400	77.7%	0.5%	21.8%
above $0.400 up to $0.425	75.0%	0.5%	24.5%
above $0.425 up to $0.525	72.5%	0.4%	27.1%
above $0.525	70.1%	0.4%	29.5%

(1): Includes distributions made with respect to 80,000 LP units owned by us.
(2): Excludes distributions made with respect to 80,000 LP units owned by us.

The table above excludes distributions made by Buckeye's operating partnerships with respect to our approximate 1% general partner interest in such entities.

SELECTED FINANCIAL DATA

The following table presents selected historical consolidated financial data for our predecessor, MainLine, and its predecessor, Glenmoor Ltd., or Glenmoor, in each case for the periods and as of the dates indicated. Because MainLine had no assets or operations prior to its acquisition of Glenmoor, we refer to Glenmoor as the predecessor of both MainLine and us. The selected historical consolidated statement of operations and cash flow data for the years ended December 31, 2003 and 2005 and the periods of January 1 to May 4, 2004 and May 4 to December 31, 2004, and the balance sheet data as of December 31, 2004 and 2005 are derived from the audited financial statements of MainLine and Glenmoor and should be read together with and are qualified in their entirety by reference to, the historical consolidated financial statements and the accompanying notes included in this prospectus. The selected historical consolidated statement of operations and cash flow data for the years ended December 31, 2001 and 2002 and the balance sheet data at December 31, 2001, 2002 and 2003 are derived from the unaudited financial statements of Glenmoor. The selected historical consolidated statement of operations and cash flow data for the three months ended March 31, 2005 and 2006 and the balance sheet data as of March 31, 2006 are derived from the unaudited financial statements of MainLine and should be read together with and are qualified in their entirety by reference to the historical unaudited condensed consolidated financial statements and the accompanying notes included in this prospectus. The unaudited financial statements include all adjustments, consisting of normal, recurring accruals, which we consider necessary for fair presentation of the financial position and results of operations for these periods and as of those dates.

Because we own and control the general partner of Buckeye, we reflect our ownership interest in Buckeye on a consolidated basis, which means that our financial results are consolidated with Buckeye's financial results. The financial statements of Buckeye Pipe Line Services Company, or Services Company, which employs the employees who manage and operate the assets of Buckeye, are also consolidated into our financial statements. We have no separate operating activities apart from those conducted by Buckeye, and our cash flows consist primarily of distributions from Buckeye on the partnership interests we own. Accordingly, the selected historical consolidated financial data set forth in the following table primarily reflects the operating activities and results of operations of Buckeye. The limited partner interests in Buckeye not owned by our affiliates are reflected as a liability on our balance sheet and the non-affiliated partners' shares of income from Buckeye is reflected as an expense in our results of operations.

Our selected historical consolidated financial data for the periods presented reflects the effect of the asset acquisitions Buckeye made during these periods from the date of each acquisition, but not on a pro forma or full period basis.

Selected Financial Data
(in thousands except per unit numbers)

															MainLine
			Glenmoor(a)												MainLine
			Glenmoor(a)																		Three Months Ended March 31, 2005
			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2003			January 1, - May 4, 2004			May 4 - December 31, 2004			Year Ended December 31, 2005			Three Months Ended March 31, 2005			Three Months Ended March 31, 2006
Income Statement Data:
Revenues			$	232,397		$	247,345		$	272,947		$	97,529		$	226,014		$	408,446		$	95,889		$	105,745
	Costs and expenses:
	Operating expenses			104,824			113,720			131,711			49,712			116,203			196,750			46,581			51,261
	Depreciation and amortization			18,818			16,098			17,960			6,388			15,158			32,408			7,431			9,104
	General and administrative			15,849			16,551			17,779			6,341			13,888			23,419			5,749			5,915

		Total		139,491			146,369			167,450			62,441			145,249			252,577			59,761			66,280
Operating income				92,906			100,976			105,497			35,088			80,765			155,869			36,128			39,465
Other income (expense):
	Investment income			1,411			772			645			183			253			884			155			320
	Interest and debt expense			(22,893	)		(25,275	)		(27,704	)		(9,756	)		(28,212	)		(55,366	)		(13,097	)		(15,729	)
	Premium paid on retirement of debt(b)(c)			—			—			(45,464	)		(3,531	)		—			—			—			—

		Total		(21,482	)		(24,503	)		(72,523	)		(13,104	)		(27,959	)		(54,482	)		(12,942	)		(15,409	)

Income before equity income and non-controlling interest				71,424			76,473			32,974			21,984			52,806			101,387			23,186			24,056
Equity income				388			1,552			3,215			1,970			3,707			5,303			1,240			1,380
Non-controlling interest expense				(61,810	)		(64,081	)		(22,583	)		(22,830	)		(55,310	)		(99,704	)		(23,198	)		(23,197	)

Net income			$	10,002		$	13,944		$	13,606		$	1,124		$	1,203		$	6,986		$	1,228		$	2,239

Units outstanding — basic and diluted(d)																145,950			145,950			145,950			145,950

Earnings per unit — basic and diluted(d)															$	0.01		$	0.05		$	0.01		$	0.02

Balance Sheet Data (at period end):
Net property, plant and equipment			$	670,688		$	727,652		$	753,038			—		$	1,335,082		$	1,587,741					$	1,697,723
Total assets				811,242			877,925			948,195			—			1,747,758			2,040,832						2,147,016
Total debt, including current portion				424,375			470,500			508,721			—			1,015,225			1,104,660						1,148,996
Total equity (deficit)				2,542			5,680			(7,642	)		—			67,980			80,442						83,347
Cash Flow Data:
Net cash provided by operating activities			$	83,607		$	95,498		$	115,700		$	25,017		$	79,010		$	150,937		$	22,948		$	19,849
Net cash used in investing activities				(116,707	)		(87,952	)		(59,380	)		(8,684	)		(821,943	)		(291,152	)		(23,792	)		(111,782	)
Net cash provided by (used in) financing activities				13,617			(11,023	)		(43,032	)		(24,638	)		746,348			147,847			413			82,173

(a): MainLine was formed as a Delaware limited partnership on February 24, 2004 and commenced operations with the acquisition of the general partner interests in Buckeye on May 4, 2004. Glenmoor financial information includes that of the general partner of Buckeye and its parent entities for the periods presented prior to their acquisition by MainLine.
(b): Net income in 2003 includes a charge of $45.5 million related to a yield maintenance premium paid on the retirement of $240 million of senior notes.
(c): Net income for the period January 1 - May 4, 2004 includes a charge of $3.5 million related to a yield maintenance premium paid on the retirement of Glenmoor's term loan which was repaid on May 4, 2004.
(d): Earnings per unit is not presented for Glenmoor. Glenmoor was organized as a stock corporation with a capital structure, different from MainLine. Accordingly, presentation of earnings per share would not be meaningful.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of the financial condition and results of operations of MainLine in conjunction with the historical consolidated financial statements of MainLine and the unaudited pro forma consolidated financial statements of Buckeye GP Holdings L.P. included elsewhere in this prospectus. Among other things, those historical and pro forma financial statements include more detailed information regarding the basis of presentation for the following discussion. In addition, you should read "Forward-Looking Statements" and "Risk Factors" for information regarding certain risks inherent in our and Buckeye's business.

Introduction

General. We own and control Buckeye GP LLC ("Buckeye GP"), which is the general partner of Buckeye Partners, L.P., a publicly traded Delaware limited partnership. Buckeye's principal line of business is the transportation, terminalling and storage of petroleum products on a fee basis through facilities owned and operated by Buckeye. Buckeye also operates pipelines owned by third parties under contracts with major integrated oil and chemical companies, and performs certain construction activities, generally for the owners of these third-party pipelines. Our only cash-generating assets are our partnership interests in Buckeye, comprised of the following:

•: the general partner interests in Buckeye, which is comprised of 243,914 GP units (representing approximately 0.6% of Buckeye's outstanding units) and the incentive distribution rights.
•: the general partner interests in certain of Buckeye's operating subsidiaries (which operating subsidiaries are 99% owned by Buckeye), representing an approximate 1% interest in each operating partnership. Prior to the closing of this offering, these general partner interests were owned directly by Buckeye GP. In connection with the closing of this offering the interests will be conveyed to MainLine L.P. ("MainLine"). Neither Buckeye GP LLC nor MainLine has a direct ownership interest in Buckeye's limited liability company subsidiaries.
•: 80,000 Buckeye LP units.

Currently, MainLine Sub LLC and Buckeye GP are party to a Management Agreement, pursuant to which MainLine Sub LLC is entitled to receive an annual management fee for certain management functions it provides to Buckeye GP. In connection with this offering, MainLine Sub will assign its rights under such Management Agreement to our general partner and Buckeye will assume the direct obligation to pay such fee, rather than the obligation to reimburse Buckeye GP for its payment. The management fee includes an annual Senior Administrative Charge of not less than $975,000 and reimbursement for certain costs and expenses. The Senior Administrative Charge was $975,000 for 2004 and 2003 and $1.9 million for 2005. The disinterested directors of Buckeye GP approve the amount of the management fee on an annual basis.

Overview of Buckeye

Buckeye is a master limited partnership which operates through subsidiary entities in the transportation, terminalling and storage of petroleum products on a fee basis through facilities owned and operated by Buckeye. Buckeye also operates pipelines owned by third parties under contracts with major integrated oil and chemical companies, and performs certain construction activities, generally for the owners of these third-party pipelines.

Since 2004, Buckeye has significantly expanded its operations through acquisitions. On October 1, 2004, Buckeye acquired five refined petroleum products pipelines with an aggregate mileage of approximately 900 miles and 24 refined products terminals with an aggregate storage

capacity of 9.3 million barrels (the "Midwest Pipelines and Terminals") from Shell Oil Products U.S., ("Shell") for a purchase price of $517 million. In May 2005, Buckeye acquired a refined petroleum products pipeline system comprising approximately 478 miles of pipeline and four refined products terminals with aggregate storage capacity of approximately 1.3 million barrels located in the northeastern United States (the "Northeast Pipelines and Terminals") from affiliates of Exxon Mobil Corporation ("ExxonMobil"). The assets acquired in these two acquisitions added $17.7 million and $95.2 million of revenue in 2004 and 2005, respectively. In November 2005, Buckeye acquired a 29-mile ammonia pipeline located in Texas. In December 2005, Buckeye acquired a 26-mile pipeline and a 40% interest in a joint venture company that owns another refined petroleum products pipeline. Also in December 2005, Buckeye Terminals LLC ("Buckeye Terminals"), a wholly owned subsidiary of BPH, acquired a refined products terminal located in Taylor, Michigan from affiliates of Atlas Oil Company for $20 million. The terminal has aggregate storage capacity of approximately 260,000 barrels, as well as rail offloading capabilities used to offload ethanol for blending with gasoline at the terminal. On January 1, 2006, Buckeye Terminals acquired a refined petroleum products terminal located in Niles, Michigan from affiliates of Shell for approximately $13.0 million. The terminal has aggregate storage capacity of approximately 630,000 barrels. On January 31, 2006, Buckeye NGL completed its acquisition of an approximately 350-mile natural gas liquids pipeline extending generally from Wattenberg, Colorado to Bushton, Kansas from BP Pipelines (North America) Inc. for approximately $87.0 million, including a deposit of $7.7 million paid in December 2005.

Buckeye's business comprises three operating segments: Pipeline Operations, Terminalling and Storage and Other Operations. The business of each operating segment is:

Pipeline Operations:

The Pipeline Operations segment receives petroleum products, including gasoline, jet and diesel fuel and other distillates, from refineries, connecting pipelines and bulk and marine terminals and transports those products to other locations for a fee. This segment owns and operates approximately 5,350 miles of pipeline systems in the following states: California, Colorado, Connecticut, Florida, Illinois, Indiana, Kansas, Massachusetts, Michigan, Missouri, New Jersey, Nevada, New York, Ohio, Pennsylvania and Tennessee.

Terminalling and Storage:

The Terminalling and Storage segment provides bulk storage and terminal throughput services. This segment owns and operates 45 active terminals that have the capacity to store an aggregate of approximately 17.6 million barrels of refined petroleum products. The terminals are located in Indiana, Illinois, Massachusetts, Michigan, Missouri, New York, Ohio and Pennsylvania.

Other Operations:

The Other Operations segment consists primarily of Buckeye's operations of third-party pipelines, owned principally by major petrochemical companies, pursuant to operations and maintenance contracts. The third-party pipelines are located in Texas. This segment also includes the provision by Buckeye, through its Buckeye Gulf Coast Pipe Lines, L.P. ("BGC") subsidiary, of pipeline construction management services, typically for cost plus a fixed fee. The Other Operations segment also includes Buckeye's ownership and operation of an ammonia pipeline acquired in November 2005, and its majority ownership of a crude butadiene pipeline located in Texas (the "Sabina Pipeline").

Results of Our Operations

The results of operations discussed below principally reflect the activities of Buckeye. Because our financial statements include the consolidated results of Buckeye, our financial statements are substantially similar to Buckeye's. The differences in our financial statements primarily include the following adjustments:

•: Interest of non-controlling partners in Buckeye—Our consolidated balance sheet includes a non-controlling interest liability that reflects the proportion of Buckeye owned by its partners other than us. Similarly, the ownership interests in Buckeye held by its partners other than us are reflected in our consolidated income statement as non-controlling interest expense. These non-controlling interest liabilities and expenses are not reflected in Buckeye's financial statements.
•: Our capital structure—In addition to incorporating the assets and liabilities of Buckeye, our consolidated balance sheet includes our own indebtedness and related debt placement costs, and the partners' capital on our balance sheet represents our partners' capital as opposed to the capital reflected in Buckeye's balance sheet, which reflects the ownership interest of all its partners, including its owners other than us. Consequently, our income statement reflects additional interest expense, interest income and debt amortization expense that is not reflected in Buckeye's financial statements.
•: Inclusion of Buckeye Pipe Line Services Company—The financial statements of Buckeye Pipe Line Services Company ("Services Company"), which employs the employees who manage and operate the assets of Buckeye, are consolidated into our financial statements. The financial statements of Buckeye do not include the financial statements of Services Company.
•: Our G&A expenses—We incur general and administrative expenses that are independent from Buckeye's operations and are not reflected in Buckeye's consolidated financial statements.
•: Elimination of Intercompany Transactions—Intercompany obligations and payments between Buckeye and its consolidated subsidiaries and us and Services Company are reflected on Buckeye's financial statements but are eliminated in our consolidated financial statements.

Consolidated Financial Results for the Year Ended December 31, 2004

Our consolidated financial results have been prepared to reflect the periods of our ownership of the general partner interest of Buckeye separate from that of Glenmoor Ltd. ("Glenmoor"), which we refer to as our Predecessor. Accordingly, our consolidated statements of income for 2004 present the period of our Predecessor's ownership during the period January 1 through May 4, 2004. In order to make these two periods comparable to the other full-year periods, we have combined these two periods to reflect financial results for the twelve months ended December 31, 2004. We believe that an analysis of results for three full-year periods is more meaningful than a separate analysis which compares only partial-year periods. Generally Accepted Accounting Principles ("GAAP") do not allow for such a combination in historical financial statements, and we have strictly added the results for each partial-year period together and have made no attempt to adjust the amounts for any pro forma effects. We believe, while the purchase of the general partner interest in Buckeye by MainLine resulted in an increase in the recorded basis of our assets, that such increase did not have a material effect on the individual line items of revenue and expense. Purchase accounting adjustments, which are more fully described in Note 3 to the consolidated financial statements of MainLine L.P. appearing elsewhere in this document, were principally related

to goodwill, which is not amortized. The following schedule combines the two periods to provide full-year 2004 results:

		January 1 - May 4, 2004			May 4 - December 31, 2004			Non-GAAP Combined Year Ended December 31, 2004
		(in thousands)
Revenues		$	97,529		$	226,014		$	323,543
Costs and expenses:
	Operating expenses		49,712			116,203			165,915
	Depreciation and amortization		6,388			15,158			21,546
	General and administrative		6,341			13,888			20,229

			62,441			145,249			207,690

Operating income			35,088			80,765			115,853

Other income (expense):
	Investment income		183			253			436
	Interest and debt expense		(9,756	)		(28,212	)		(37,968	)
	Premium paid on retirement of debt		(3,531	)		—			(3,531	)

			(13,104	)		(27,959	)		(41,063	)

	Income before equity income and non-controlling interest		21,984			52,806			74,790
	Equity income		1,970			3,707			5,677
	Non-controlling interest expense		(22,830	)		(55,310	)		(78,140	)

Net income		$	1,124		$	1,203		$	2,327

Results of Operations

We are presenting the following summary results of operations for the periods presented below, which include our Predecessor for the year ended December 31, 2003, the above combination of our Predecessor and us for the year ended December 31, 2004 and us for the year ended December 31, 2005 and three months ended March 31, 2005 and 2006:

		Year Ended December 31,									Three Months Ended March 31,
		2003			2004			2005			2005			2006
		(in thousands)
Revenue		$	272,947		$	323,543		$	408,446		$	95,889		$	105,745
Costs and expenses			167,450			207,690			252,577			59,761			66,280

	Operating income		105,497			115,853			155,869			36,128			39,465
Other income (expenses)			(72,523	)		(41,063	)		(54,482	)		(12,942	)		(15,409	)

	Income before equity income and non-controlling interest		32,974			74,790			101,387			23,186			24,056
Equity income			3,215			5,677			5,303			1,240			1,380
Non-controlling interest			(22,583	)		(78,140	)		(99,704	)		(23,198	)		(23,197	)

	Net income	$	13,606		$	2,327		$	6,986		$	1,228		$	2,239

The improvement in revenues and operating income in the periods presented is generally due to the expansion of Buckeye's operations through the addition of the Northeast Pipelines and Terminals in 2005 and the Midwest Pipelines and Terminals in 2004.

Revenues and operating income by operating segment for each of the three years ended December 31, 2003, 2004 and 2005 and three months ended March 31, 2005 and 2006 were as follows:

			Year Ended December 31,						Three Months Ended March 31,
			2003		2004		2005		2005		2006
			(in thousands)
Revenues:
	Pipeline Operations		$	234,012	$	264,160	$	306,849	$	73,272	$	81,867
	Terminalling and Storage			15,352		26,232		68,822		17,139		18,168
	Other Operations			23,583		33,151		32,775		5,478		5,710

		Total	$	272,947	$	323,543	$	408,446	$	95,889	$	105,745

Operating income:
	Pipeline Operations		$	96,215	$	99,871	$	121,546	$	27,819	$	30,735
	Terminalling and Storage			3,955		11,307		28,038		7,749		7,511
	Other Operations			5,327		4,675		6,285		560		1,219

		Total	$	105,497	$	115,853	$	155,869	$	36,128	$	39,465

First Quarter 2006 Compared to First Quarter 2005

Total revenues for the quarter ended March 31, 2006 were $105.7 million, $9.8 million or 10.3% greater than revenue of $95.9 million in the quarter ended March 31, 2005.

Pipeline Operations

Revenue from Pipeline Operations was $81.9 million in the first quarter of 2006 compared to $73.3 million in the first quarter of 2005. The increase of $8.6 million in Pipeline Operations was primarily the result of:

•: Buckeye Pipe Line Transportation LLC ("BPL Transportation"), a Buckeye subsidiary that acquired the refined petroleum products pipeline system from ExxonMobil on May 5, 2005, revenue of $4.7 million;
•: Buckeye NGL Pipe Lines LLC ("Buckeye NGL") revenue of $1.8 million (Buckeye NGL commenced operations on January 31, 2006);
•: a 3.7% average tariff rate increase effective May 1, 2005;
•: a 0.4%, or $0.1 million, decrease, net of BPL Transportation revenue, in gasoline transportation revenue on a 3.0% decrease in gasoline volumes delivered;
•: a 10.7%, or $1.2 million, increase, net of BPL Transportation revenue, in jet fuel transportation revenue on a 5.5% increase in jet fuel volumes delivered;
•: a 5.9%, or $1.1 million increase, net of BPL Transportation revenue, in distillate transportation revenue on a 3.4% increase in distillate volumes delivered;

•: an increase in liquefied petroleum gas ("LPG") and other product transportation revenue of $0.4 million as a result of higher tariffs and an increase in volumes delivered;
•: a $1.1 million increase in incidental revenue primarily from increased revenues under a product supply arrangement in connection with WesPac Pipelines—Reno LLC ("WesPac—Reno");
•: a $0.9 million increase in miscellaneous rental revenue; and
•: a $3.5 million decrease in transportation settlement revenue, representing primarily the settlement of overages and shortages on product deliveries.

Product deliveries for each of the quarters ended March 31, 2005 and 2006, including BPL Transportation product deliveries, were as follows:

	Barrels per Day Three Months Ended March 31,
Product	Barrels per Day Three Months Ended March 31,
Product	2005	2006
Gasoline	663,500	691,100
Distillate	341,500	367,100
Jet Fuel	298,600	332,500
LPG's	11,900	13,800
Other	5,700	10,500

Total	1,321,200	1,415,000

During the first quarter of 2006, BPL Transportation product deliveries averaged 79,100 barrels per day.

Terminalling and Storage

Terminalling and Storage revenues of $18.2 million for the quarter ended March 31, 2006 increased by $1.0 million from the comparable period in 2005.

The terminals acquired from ExxonMobil on May 5, 2005 (the "ExxonMobil Terminals"), a terminal located in Taylor, Michigan and acquired in December 2005, and the Niles, Michigan terminal acquired in January 2006, generated, in the aggregate, Terminalling and Storage revenues of $2.3 million in the first quarter of 2006.

Terminalling and Storage revenues at other terminals owned by Buckeye were $15.9 million for the quarter ended March 31, 2006, a decline of $1.2 million from the first quarter of 2005. The decline in Terminalling and Storage revenues of approximately $2.4 million is attributable primarily to a decrease in terminal settlement charges (representing the settlement of overages and shortages in connection with terminal deliveries). The first quarter of 2006, compared with the same quarter in 2005, was partially offset by a $1.2 million increase in rent and incidental charges, which is included in Terminalling and Storage revenues.

Average daily throughput for the refined products terminals for the quarters ended March 31 2005 and 2006 were as follows:

	Barrels per Day Three Months Ended March 31,
	2005	2006
Refined products throughput	382,500	447,400

Other Operations

Revenue from Other Operations of $5.7 million for the quarter ended March 31, 2006 increased by $0.2 million from the comparable period in 2005. Revenue from Other Operations in the first quarter of 2006 includes revenue from pipeline construction activities of $0.5 million, contract operating services of $3.1 million and rent and other revenues of $2.1 million.

Operating Expenses

Costs and expenses for the three months ended March 31, 2005 and 2006 were as follows:

	Operating Expenses
	2005		2006
	(In thousands)
Payroll and payroll benefits	$	21,327	$	21,324
Depreciation and amortization		7,431		9,104
Operating power		6,079		7,090
Outside services		4,199		4,592
Property and other taxes		3,983		5,106
All other		16,742		19,064

Total	$	59,761	$	66,280

Payroll and payroll benefits in the first quarter of 2006 were consistent with the first quarter of 2005. In 2006, the company incurred a $0.9 million increase related to employees hired as a result of the Northeast Pipelines and Terminals acquisition in May 2005 and subsequent acquisitions. In 2006, increases in salaries and wages of $1.2 million resulted from an increase in the number of employees and overtime pay due to Buckeye's expanded operations and higher wage rates. Buckeye also experienced increases in benefit costs of $0.3 million in 2006. These increases were partially offset by an increase of capitalized payroll of $0.7 million resulting from increased charges to capital projects by internal personnel and a decrease in severance pay. Buckeye incurred expense of $0.6 million for severance pay and $1.2 million in unit-based compensation in 2005 which did not occur during 2006. The reduction in unit-based compensation resulted from the adoption of FAS123R effective January 1, 2006. (See Note 6 in the Company's Condensed Consolidated Financial Statements for further details).

Depreciation and amortization expense was $9.1 million in the first quarter of 2006, an increase of $1.7 million from the first quarter of 2005. Depreciation related to assets acquired over the last year was $1.2 million. The remaining increase in depreciation and amortization expense resulted from Buckeye's ongoing maintenance and expansion capital program.

Operating power costs were $7.1 million for the three months ended March 31, 2006, an increase of $1.0 million from the same period in 2005. The Northeast Pipelines and Terminals and the other assets acquired over the last year added $0.9 million of power costs in the first quarter of 2006. Operating power consists primarily of electricity required to operate pumping facilities.

Outside services costs increased $0.4 million from $4.2 million in the first quarter of 2005 to $4.6 million in the first quarter of 2006. Outside services costs related to the assets acquired after April 1, 2005 were $0.2 million. Outside services costs consist principally of third-party contract services for pipeline and terminal maintenance activities.

Property and other taxes were $5.1 million in the first quarter of 2006, an increase of $1.1 million compared to the first quarter of 2005. Property and other taxes in the first quarter of

2006 related to the Northeast Pipelines and Terminals and subsequent acquisitions were $0.6 million. Of the remaining increase of $0.5 million, Buckeye experienced higher real property tax assessments in several states.

All other costs were $19.1 million for the three months ended March 31, 2006, an increase of $2.4 million compared to $16.7 million in the same period in 2005. The increase reflects $1.1 million of costs associated with fuel purchases by Wes Pac—Reno related to a product-supply arrangement. Other costs related to all acquisitions that occurred after April 1, 2005 were $0.9 million. The Company experienced an increase in professional fees of $0.9 million primarily related to its initial public offering. These cost increases were partially offset by a decrease in casualty losses of $1.0 million. The remainder of the increase related to various other pipeline operating costs.

Costs and expenses by segment for the quarters ended March 31, 2005 and 2006 were as follows:

			Costs and Expenses
			2005		2006
			(In thousands)
Total costs and expenses
	Pipeline Operations		$	45,453	$	51,133
	Terminalling and Storage			9,390		10,657
	Other Operations			4,918		4,490

		Total	$	59,761	$	66,280

Other income (expense) for the three months ended March 31, 2005 and 2006 was as follows:

		Other Income (Expense)
		2005			2006
		(In thousands)
Investment income		$	155		$	320
Interest and debt expense			(13,097	)		(15,729	)

	Total	$	(12,942	)	$	(15,409	)

Equity income		$	1,240		$	1,380

Other income (expense) was a net expense of $15.4 million in the first quarter of 2006, compared to a net expense of $12.9 million during the same period in 2005. Investment income for the three months ended March 31, 2006 was consistent with investment income generated during the three months ended March 31, 2005.

Interest and debt expense was $15.7 million for the three months ended March 31, 2006, an increase of $2.6 million from $13.1 million for the three months ended March 31, 2005. Buckeye incurred approximately $1.6 million in interest expense related to the 5.125% Notes due 2017, which were issued in June 2005. The balance of the increase in interest expense resulted from higher average balances outstanding on Buckeye's 5-year revolving credit facility.

Equity income in the first quarter of 2006 of $1.4 million was consistent with equity income generated in the first quarter of 2005.

2005 Compared to 2004

Total revenues for the year ended December 31, 2005 were $408.4 million, $84.9 million or 26.2% greater than revenue of $323.5 million in 2004.

Pipeline Operations

Revenue from Pipeline Operations was $306.8 million in 2005 compared to $264.0 million in 2004. The increase of $42.8 million in Pipeline Operations was primarily the result of:

•: Wood River Pipe Lines LLC ("Wood River"), a Buckeye subsidiary that acquired the five refined petroleum products pipelines from Shell on October 1, 2004, transportation revenue increase of $23.5 million;
•: BPL Transportation, revenue of $12.1 million;
•: a 3.7% average tariff rate increase effective May 1, 2005, and a 2.8% average tariff rate increase effective May 1, 2004;
•: a 2.8%, or $3.5 million, increase, net of Wood River and BPL Transportation, in gasoline transportation revenue on a 1.0% decrease in gasoline volumes delivered;
•: a 3.2%, or $1.3 million, increase, net of Wood River and BPL Transportation, in jet fuel transportation revenue on a 0.5% increase in jet fuel volumes delivered;
•: a 4.2%, or $2.7 million, increase, net of Wood River and BPL Transportation, in distillate transportation revenue on a 2.4% increase in distillate volumes delivered;
•: a decrease in LPG transportation revenue of $1.0 million as a result of lower LPG volumes delivered;
•: a decrease in transportation settlement revenue, representing the settlement of overages and shortages on product deliveries, of $3.4 million; and
•: a $3.7 million increase in incidental revenue primarily from increased revenues under a product supply arrangement in connection with WesPac—Reno.

Product deliveries for each of the three years ended December 31, 2003, 2004 and 2005, including Wood River and BPL Transportation product deliveries, in barrels, were as follows:

			Year Ended December 31,
			2003	2004	2005
			(Average Barrels Per Day)
Product:
	Gasoline		578,800	609,000	721,200
	Distillate		285,400	293,000	323,600
	Turbine Fuel		248,500	273,100	319,600
	LPG's		19,100	21,100	16,300
	Other		4,600	4,400	4,700

		Total	1,136,400	1,200,600	1,385,400

During the three months in 2004 that Buckeye owned the Wood River pipeline system, volumes on the Wood River pipeline system averaged 196,000 barrels per day. Volumes on all of Buckeye's other pipelines (i.e., excluding the Wood River pipeline system) averaged 1,151,400 barrels per day for 2004.

During the approximate eight months in 2005 that Buckeye owned the BPL Transportation pipeline system, volumes on the BPL Transportation pipeline system averaged 74,400 barrels per day. Volumes on all of Buckeye's other pipelines (i.e., excluding the BPL Transportation pipeline system) averaged 1,335,800 barrels per day for 2005.

Terminalling and Storage

Terminalling and Storage revenue of $68.8 million in 2005 increased by $42.5 million from the comparable period in 2004.

The terminals acquired from Shell on October 1, 2004 (the "Shell Terminals") generated terminalling and storage revenues of $48.9 million in 2005. This was $39.7 million greater than the terminalling and storage revenues generated by the Shell terminals during the three months they were owned by Buckeye in 2004. The ExxonMobil Terminals generated terminalling and storage revenues of $3.9 million in 2005.

Terminalling and Storage revenues at other facilities owned by Buckeye were $16.0 million in 2005, a decline of $1.1 million from 2004. The decline in revenue resulted from a decrease in throughput charges of $1.8 million that was partially offset by a $0.7 million increase in rent and incidental charges.

Average daily throughput for the refined products terminals for the years ended December 31, 2003, 2004 and 2005 were as follows:

	Year Ended December 31,
	2003	2004	2005
	(Average Barrels Per Day)
Refined products throughput	73,000	160,900	419,200

Other Operations

Revenue from Other Operations of $32.8 million for the year ended December 31, 2005 decreased by $0.4 million from the comparable period in 2004. Revenues from other operating activities include revenue from pipeline construction activities of $12.0 million, contract operating services of $14.2 million and rental revenues of $6.6 million.

Operating Expenses

Costs and expenses for the years ended December 31, 2003, 2004 and 2005 were as follows:

		Operating Expenses
		2003		2004		2005
		(in thousands)
Payroll and payroll benefits		$	63,811	$	71,481	$	82,725
Depreciation and amortization			17,960		21,546		32,408
Operating power			21,899		22,976		26,240
Outside services			17,831		18,921		22,510
Property and other taxes			10,437		13,316		16,802
Construction management			—		12,287		8,932
All other			35,512		47,163		62,960

	Total	$	167,450	$	207,690	$	252,577

Payroll and payroll benefits costs were $82.7 million in 2005, an increase of $11.2 million over 2004. Of this increase, approximately $7.4 million, which represent payroll and payroll benefit costs for the first nine months of 2005, is related to employees added as a result of the acquisition of the Midwest Pipelines and Terminals on October 1, 2004. Employees hired in connection with the acquisition of the Northeast Pipelines and Terminals added $2.0 million of payroll and payroll benefits costs. Of the remaining increase, approximately $3.1 million resulted from increases in wage rates in 2005 compared to 2004, which was partially offset by a decrease in ESOP related expenses of $1.8 million.

Depreciation and amortization expense of $32.4 million increased by $10.9 million in 2005 over 2004. Depreciation related to the Midwest Pipelines and Terminals for the first nine months of 2005 was $7.6 million. The Northeast Pipelines and Terminals added $2.3 million of depreciation expense in 2005. The remaining increase of $1.0 million resulted from Buckeye's ongoing maintenance and expansion capital program.

Operating power, consisting primarily of electricity required to operate pumping facilities, was $26.2 million in 2005, an increase of $3.3 million over 2004. The Midwest Pipelines and Terminals added $2.3 million in operating power costs from January 1 through September 30, 2005, and the Northeast Pipelines and Terminals added $1.7 million in operating power costs from the date of acquisition in May 2005. Increases in operating power costs that resulted from the acquisitions of the Midwest Pipelines and Terminals and Northeast Pipelines and Terminals were partially offset by a decrease of $0.8 million at BGC related to the loss of an operations and maintenance contract with a third party in 2004.

Outside services costs, consisting principally of third-party contract services for maintenance activities, were $22.5 million, an increase of $3.6 million over 2004. Outside services costs related to the Midwest Pipelines and Terminals and Northeast Pipelines and Terminals were $4.5 million for the first nine months of 2005 and $0.8 million, respectively. The increases were partially offset by a decrease of $0.8 million at BGC due to the loss of an operating contract in 2004. The remaining difference is a result of timing of maintenance projects conducted by Buckeye.

Property and other taxes were $16.8 million in 2005, an increase of $3.5 million over 2004. Property and other taxes related to the Midwest Pipelines and Terminals were $1.9 million for the first nine months in 2005. The Northeast Pipelines and Terminals added $1.3 million of property and other taxes since its date of acquisition in May 2005. Of the remaining increase, Buckeye experienced higher real property tax assessments in several states.

Construction management costs were $8.9 million in 2005, a decrease from the prior year by $3.4 million. The decrease in construction management costs is a result of the completion of a major construction contract with a chemical company which began in 2004 and was completed in the first quarter of 2005.

All other costs were $62.9 million in 2005 compared to $47.2 million in 2004, an increase of $15.7 million. Other costs related to the Midwest Pipelines and Terminals during the first nine months of 2005 and Northeast Pipelines and Terminals since their acquisition in May 2005 added $7.1 million and $3.8 million, respectively. Buckeye experienced an increase of $3.5 million in costs related to a product supply arrangement over such costs in 2004. Casualty losses, net of the Midwest Pipelines and Terminals and Northeast Pipelines and Terminals, increased by $1.1 million primarily as a result of pipeline and terminal product releases in 2005.

Costs and expenses by segment for the years ended December 31, 2003, 2004 and 2005 were as follows:

			Year Ended December 31,
			2003		2004		2005
			(in thousands)
Total costs and expenses:
	Pipeline Operations		$	137,797	$	164,289	$	185,303
	Terminalling and Storage			11,397		14,924		40,784
	Other Operations			18,256		28,477		26,490

		Total	$	167,450	$	207,690	$	252,577

Total other income (expenses) for the years ended December 31, 2003, 2004 and 2005 were as follows:

		Year Ended December 31,
		2003			2004			2005
		(in thousands)
Investment income		$	645		$	436		$	884
Interest and debt expense			(27,704	)		(37,968	)		(55,366	)
Premium paid on retirement of debt			(45,464	)		(3,531	)		—

	Total	$	(72,523	)	$	(41,063	)	$	(54,482	)

Equity income		$	3,215		$	5,677		$	5,303

Other income (expenses) was a net expense of $54.5 million in 2005, compared to a net expense of $41.1 million in 2004. Investment income in 2005 was consistent with investment income generated in 2004.

We incurred interest and debt expense of $55.4 million in 2005 compared to interest expense of $38.0 million incurred in 2004, which is an increase of $17.4 million. We incurred additional interest and debt expense in 2005 compared to 2004 due to an increase in the amounts outstanding under our Senior Secured Credit Facility. Approximately $11.3 million of the interest expense incurred in 2005 related to Buckeye's 5.30% Notes due 2014, which were issued in October 2004 in connection with the acquisition of the Midwest Pipelines and Terminals. Buckeye incurred approximately $3.2 million in interest expense related to the 5.125% Notes due 2017, which were issued in June 2005 primarily in connection with the acquisition of the Northeast Pipelines and Terminals. Interest expense was reduced by $2.6 million in 2004 as a result of Buckeye's interest rate swap in effect until December 2004. Increases in interest expense in 2005 were partially offset by an increase in capitalized interest which is due to an increase in the number of capital projects in 2005.

In 2004, we expensed $3.5 million of deferred financing costs related to our prior credit facility. Such expense was not incurred during 2005.

Equity income in 2005 of $5.3 million was consistent with equity income generated in 2004.

2004 Compared to 2003

Total revenues for the year ended December 31, 2004 were $323.5 million, $50.6 million or 18.5% greater than revenue of $272.9 million in 2003.

Pipeline Operations

Revenue from Pipeline Operations was $264.0 million in 2004 compared to $234.0 million in 2003. The increase of $30.0 million in Pipeline Operations revenue was primarily the result of:

•: Wood River transportation revenue of $8.4 million;
•: a 2.8% average tariff rate increase effective May 1, 2004 and a 2.4% average tariff increase effective May 1, 2003;
•: a 3.0% increase, net of Wood River, in gasoline transportation revenue of $3.6 million on a 0.2% decrease in gasoline volumes delivered;
•: a 7.5% increase, net of Wood River, in jet fuel transportation revenue of $2.9 million with a 5.2% increase in jet fuel volumes delivered. Deliveries to New York City (LaGuardia, JFK and Newark) airports increased by 8.4% but were partially offset by a 16.9% decline in deliveries to the Pittsburgh Airport due to US Airways' schedule reductions and a 55.0% decline in deliveries to Ludlow Air Force Base;
•: a 2.0% increase, net of Wood River, in distillate transportation revenue of $1.3 million on a 0.4% increase in distillate volumes delivered;
•: a 25.0% increase in LPG transportation revenue of $0.9 million on a 10.8% increase in LPG volumes delivered; and
•: an increase of $7.5 million related to a product supply arrangement and certain refined products pipeline maintenance services being recorded on a gross basis rather than the net-of-cost basis previously used.

Terminalling and Storage

Terminalling and Storage and rental revenues of $26.4 million in 2004 increased by $11.0 million from the comparable period in 2003. Of this increase, $9.2 million related to throughput revenue generated by the terminals acquired from Shell on October 1, 2004. The remaining increase of $1.8 million was primarily due to increases in rent and incidental revenues.

Other Operations

Contract operations revenue of $33.2 million for the year ended December 31, 2004 increased by $9.6 million from the comparable period in 2003. Revenue from pipeline construction activities increased by $12.7 million in 2004, due to a new contract, but was partially offset by a decline in contract operation service revenue of $3.2 million which resulted from the loss of an operations and maintenance contract with a third party.

Operating Expenses

Payroll and payroll benefits costs were $71.5 million in 2004, an increase of $7.7 million over 2003. Of this increase, approximately $3.9 million is related to employees added as a result of the acquisition of the Midwest Pipelines and Terminals on October 1, 2004. Buckeye hired approximately 104 employees in 2004, most of whom previously worked for Shell primarily on the Midwest Pipelines and Terminals. The employees were hired as employees of Services Company. Of the remaining increase of $3.8 million of payroll costs in 2004, approximately $1.2 million resulted from Buckeye recording expenses from operation services contracts on a gross basis, rather than the net-of-cost basis previously used. The balance of the increase resulted principally from increases in wage rates in 2004 compared to 2003, as well as increased employee benefits (principally related to retiree medical costs), partially offset by increased salaries and wages capitalized as part of maintenance and expansion capital projects.

Depreciation and amortization expense of $21.5 million increased by $3.6 million in 2004 over 2003. Depreciation related to the Midwest Pipelines and Terminals was $2.5 million. The remaining increase of $1.1 million resulted from Buckeye's ongoing maintenance and expansion capital program.

Operating power, consisting primarily of electricity required to operate pumping facilities, was $23.0 million in 2004, an increase of $1.1 million over 2003. The Midwest Pipelines and Terminals added $0.7 million in operating power costs from the date of their acquisition on October 1, 2004. Of the remaining increase of $0.4 million in operating power costs, increases at Buckeye and Laurel of $1.4 million (related to higher volumes) were partially offset by a decrease of $1.0 million at BGC related to the loss of an operations and maintenance contract with a third party in 2004.

Outside services costs, consisting principally of third-party contract services for maintenance activities, were $18.9 million, an increase of $1.1 million over 2003. Outside services costs related to the Midwest Pipelines and Terminals were $1.6 million. Pipeline and terminals operations added approximately $0.7 million related to ongoing maintenance activities, which were more than offset by reductions of $1.2 million at BGC that resulted from the loss of an operations and maintenance contract with a third party in 2004.

Property and other taxes were $13.3 million in 2004, an increase of $2.9 million over 2003. Property and other taxes related to the Midwest Pipelines and Terminals were $0.6 million. Of the remaining increases of $2.3 million, Buckeye experienced higher real property tax assessments in several states.

Construction management costs were $12.3 million in 2004 as a result of a significant construction contract with a major chemical company. Construction management costs were minimal in 2003.

All other costs were $47.2 million in 2004 compared to $35.5 million in 2003, an increase of $11.7 million. Of this increase, $3.7 million resulted from recording certain expenses on a gross basis compared to the net-of-cost basis previously used, including fuel purchases by WesPac Reno ($3.0 million) and costs related to an operation services contract ($0.7 million). Other costs related to the Midwest Pipelines and Terminals added $2.3 million. Casualty losses increased by $1.4 million in 2004 primarily as a result of pipeline and terminal releases. In addition, in August 2004, BGC elected to be treated as a corporation for Federal income tax purposes. Buckeye accrued $0.5 million, included in operating expenses, related to these income taxes incurred during the period after BGC elected to be treated as a corporation for Federal income tax purposes. Professional fees increased by $2.2 million, principally associated with Sarbanes-Oxley compliance and restructuring of certain agreements between Buckeye GP and its owners and Buckeye. The remainder of the increases related to various other pipeline operating costs.

Other Income (Expense)

Other income (expense) was a net expense of $41.1 million in 2004 compared to net expense of $72.5 million in 2003.

Investment income of $0.4 million in 2004 was consistent with investment income generated in 2003.

Interest and debt expense in 2004 increased by $10.3 million over 2003. We incurred $2.9 million of interest related to our Senior Secured Credit Facility, which was entered into in May 2004. Buckeye incurred approximately $3.3 million in interest related to its 5.30% Notes due 2014 which were issued in October 2004 in connection with the acquisition of the Midwest Pipelines and Terminals. The balance of the increase in interest expense resulted from higher average balances outstanding on Buckeye's 5-year revolving line of credit in the second half of 2004

compared to 2003, a portion of which was related to the acquisition of the Midwest Pipelines and Terminals.

In 2004, we expensed $3.5 million of deferred financing costs related to our prior credit facility. In 2003, Buckeye paid a yield maintenance premium of $45.5 million on the retirement of the $240 million Senior Notes of Buckeye.

Equity income in 2004 of $5.7 million increased by $2.5 million over 2003, which resulted from a full year's investment income from West Texas LPG Pipeline, L.P. ("WTP") compared to five months of such investment income in 2003 (Buckeye's 20% interest in WTP was acquired in August 2003) and increased earnings from Buckeye's ownership interest in West Shore.

Liquidity and Capital Resources

Our primary objective is to increase our cash available for distribution to our unitholders by actively assisting Buckeye in executing its business strategy. We intend to support Buckeye in the implementation of its business strategy by assisting Buckeye in identifying, evaluating and pursuing growth opportunities.

Capital Requirements

Historically, our only capital requirement has been the debt service related to our indebtedness. This indebtedness includes the $100 million term loan used to fund part of the acquisition price of our predecessor, Glenmoor, in May 2004, our $180 million Senior Secured Credit Facility, which was used to repay the $100 million term loan and to make a distribution to our equity owners, and the indebtedness of our Predecessor. As discussed previously, we will pay off the balance outstanding under our Senior Secured Credit Facility, approximately $168.6 million at July 3, 2006, with the proceeds of this offering. Otherwise, we have no capital requirements other than those of Buckeye. Buckeye's primary future capital requirements will consist of:

•: maintenance and capital expenditures to maintain the integrity and expand the capabilities of its existing pipelines and terminals;
•: expenditures for acquisitions to complement its existing asset base or provide entry into new markets; and
•: debt service requirements.

Liquidity

Our primary cash-generating asset is our ownership interest in Buckeye's general partner, which owns (i) general partner units, or GP Units, in Buckeye, (ii) approximate one percent general partner interests in Buckeye's subsidiary operating partnerships, and (iii) the incentive distribution rights in Buckeye. Our cash flow is, therefore, directly dependent upon the ability of Buckeye to make cash distributions to its partners. The actual amount of cash that Buckeye will have available for distribution will depend primarily on its ability to generate cash beyond its working capital requirements. Buckeye's primary future sources of liquidity are:

•: operating cash flow;
•: proceeds from borrowings under its credit facility; and
•: proceeds from the issuance of LP units.

As it has for the years 2003, 2004 and 2005, we believe that Buckeye's cash generated from operations will be sufficient to meet expected maintenance and capital expenditures for 2006.

Consistent with past practice, we expect that Buckeye's expenditures for acquisitions will be financed with borrowings under its credit facility, issuance of additional LP units or debt securities or a combination thereof. A discussion of Buckeye's credit facility and financing transactions follows:

On August 6, 2004, Buckeye entered into a $400 million 5-year revolving credit facility. The credit facility contains a one-time expansion feature to $550 million subject to certain conditions. It matures on August 6, 2009. At December 31, 2005 and March 31, 2006, Buckeye had $348.7 million and $298.0 million available under its credit facility, respectively.

Buckeye's financial strategy is to maintain an investment-grade credit rating, which involves, among other things, the issuance of additional LP units in connection with its acquisitions and internal growth activities in order to maintain financial ratios, including total debt to total capital, acceptable to Buckeye. Since 2003, Buckeye has issued LP units in registered offerings raising approximately $503.5 million in net proceeds in support of its acquisition and growth strategies. Buckeye may issue additional LP units in the future to fund acquisitions and internal growth activities, market conditions permitting. Buckeye is subject, however, to changes in the equity markets for its LP units, and there can be no assurance that Buckeye will be able or willing to access the public or private markets for its LP units in the future. If Buckeye were unable or unwilling to issue additional LP units, Buckeye would be required to either restrict potential future acquisitions or pursue debt or other equity financing alternatives, some of which could involve higher costs.

Debt

At December 31, 2005 and March 31, 2006, we and our subsidiaries, together with Buckeye and Services Company, had outstanding approximately $1.1 billion face amount of debt, as summarized below.

MainLine L.P.

As described previously, we have a Senior Secured Credit Facility (the "Term Loan") with a consortium of financial institutions arranged by Goldman Sachs Credit Partners. Borrowings under the Term Loan are guaranteed by MainLine Sub LLC. The Term Loan can be prepaid in whole or in part at any time after December 17, 2005 without penalty. Any amounts prepaid prior to December 17, 2005 were subject to a 1% prepayment penalty on amounts prepaid. We may borrow up to an additional $35 million under the Term Loan on or before December 17, 2007 subject to certain provisions.

Borrowings under the Term Loan bear interest under one of two rate options, selected by us, equal to either (i) the greater of (a) the federal funds rate plus one half of one percent and (b) the prime interest rate or (ii) the London Interbank Offered Rate ("LIBOR") plus an applicable margin. The applicable margin, which was 2.375% at December 31, 2005 and March 31, 2006, is determined based upon an interest coverage ratio defined in the loan agreement. The applicable margin will be 2.375% when the interest rate coverage ratio is less than 4.0 to 1 and 2.00% in periods in which the interest coverage ratio is greater than 4.0 to 1. At December 31, 2005 and March 31, 2006, the interest rate under the Term Loan was approximately 6.88% and 7.31%, respectively.

We are required to maintain an interest coverage ratio, as defined in the Term Loan agreement, of 1.75 to 1 for each fiscal quarter. The Term Loan also contains a requirement that we maintain an interest expense reserve account in the amount of the anticipated interest payments for the next two quarterly periods, although failure to maintain such a balance is not an event of default under the Term Loan. At December 31, 2005, the amount on deposit in the interest expense reserve account was $5,117,000, compared to estimated interest in the next two quarters of $5,949,000. At

March 31, 2006, the amount on deposit in the interest expense reserve account was $5.7 million, compared to estimated interest in the next two quarters of $6.2 million.

The Term Loan contains a provision, under which excess cash flow ("ECF"), which is generally defined in the Term Loan agreement as cash revenues less cash expenses along with interest, principal and other payments required under the Term Loan, is used to reduce outstanding principal under the loan. In any quarterly period in which the interest coverage ratio, as defined in the agreement, is less than 2.5 to 1, 100% of ECF is used to reduce outstanding principal. In any quarterly period in which the interest coverage ratio is greater than or equal to 2.5 to 1 but less than 3.5 to 1, 75% of ECF is used to reduce outstanding principal. In any quarterly period in which the interest coverage ratio is greater than or equal to 3.5 to 1 but less than 5.0 to 1, 50% of ECF is used to reduce outstanding principal. When interest coverage ratio is greater than or equal to 5.0 to 1, 25% of interest coverage ratio is used to reduce outstanding principal. At December 31, 2005 and March 31, 2006, the interest coverage ratio was 2.0. The interest coverage ratio and ECF are determined using only amounts attributable to us, excluding amounts attributable to Buckeye and Services Company. Principal payments required, exclusive of ECF, are $1.8 million per year, payable quarterly.

The balance outstanding under the Term Loan at December 31, 2005 and March 31, 2006 was $173.2 million and $169.0 million, respectively. The balance, approximately $168.6 million at July 3, 2006, will be paid off with the proceeds of this offering.

We expect that we will enter into a five-year $10 million revolving credit facility with SunTrust Bank, or a syndicate of banks led by SunTrust Bank, in connection with the closing of this offering. SunTrust Bank will act as the sole and exclusive administrative agent for the facility. The credit facility may be used for working capital and other general partnership purposes.

We will be allowed to prepay all loans under the credit facility at any time without premium or penalty (other than customary LIBOR breakage costs). Amounts drawn under the credit facility will bear interest under one of two rate options, selected by us, equal to either (i) SunTrust Bank's base rate or (ii) LIBOR, as adjusted for statutory reserve requirements for Eurocurrency liabilities, plus an applicable margin. The applicable margin for LIBOR-based loans will be determined based upon the ratings assigned by S&P and Moody's for Buckeye's senior unsecured non-credit enhanced long-term debt. Our ability to borrow amounts under the revolving credit facility will be subject to the execution of customary documentation relating to the facility, including satisfaction of certain customary conditions precedent and compliance with terms and conditions included in the loan documents.

The credit agreement will require us to maintain leverage and funded debt coverage ratios. The leverage ratio covenant will require us to maintain, as of the last day of each fiscal quarter, a ratio of our total funded indebtedness, measured as of the last day of each fiscal quarter, to the aggregate dividends and distributions received by us from Buckeye, plus all other cash received by us, measured for the preceding twelve months, less expenses, of not more than 2.50 to 1.00. The funded debt coverage ratio covenant will require us to maintain, as of the last day of each fiscal quarter, a ratio of total consolidated funded debt of us and Buckeye to consolidated EBITDA (to be defined in the Credit Facility) of us and Buckeye, measured for the preceding twelve months, of not more than 5.25 to 1.00, subject to a provision for increases to 5.75 to 1.00 in connection with future acquisitions.

The credit agreement will prevent us from declaring dividends or distributions if any default or event of default, as defined in the credit agreement, occurs or would result from such a declaration. In addition, the credit agreement will contain covenants requiring us to adhere to certain financial covenants and limiting the ability of our subsidiaries to, among other things:

•: incur or guarantee indebtedness;

•: make certain negative pledges and grant certain liens;
•: make certain loans, acquisitions and investments;
•: make any material changes to the nature of our business; or
•: enter into a merger, consolidation or sale of assets.

If an event of default exists under our credit agreement, the lenders will be able to terminate the credit facility and accelerate the maturity of all outstanding loans, as well as exercise other rights and remedies. Each of the following will be an event of default under our credit facility:

•: failure to pay any principal, interest, fees, expenses or other amounts when due;
•: failure of any representation or warranty to be true and correct in any material respect;
•: failure to perform or otherwise comply with the covenants in the credit agreement or other loan documents, subject to certain grace periods;
•: default by us on the payment of any other indebtedness in excess of $5.0 million or default by Buckeye on the payment of any indebtedness in excess of $25.0 million, or any default in the performance of any obligation or condition with respect to such indebtedness beyond the applicable grace period if the effect of the default is to permit or cause the acceleration of the indebtedness;
•: bankruptcy or insolvency events involving us or our subsidiaries;
•: the entry against us or Buckeye of a judgment in excess of specified amounts, or otherwise having a material adverse effect, that is not stayed, discharged or deferred with specified periods;
•: a change in control of us;
•: the invalidity or unenforceability of any material provision in our credit agreement or related documents; and
•: the occurrence of certain events with respect to employee benefit plans subject to ERISA.

Services Company

Services Company's debt consists of its 3.60% Senior Secured Notes (the "3.60% ESOP Notes") due March 28, 2011, payable by the ESOP to a third-party lender. The 3.60% ESOP Notes were issued May 4, 2004 in order to refinance Services Company's 7.24% Senior Secured Notes which were originally issued to purchase Services Company's common stock. The 3.60% ESOP Notes are secured by a pledge of Services Company's common stock and are guaranteed by Services Company. In addition, Buckeye has committed that, in the event that the value of Buckeye's LP units owned by Services Company falls below 125% of the balance payable under the 3.60% ESOP Notes, Buckeye will fund an escrow account with sufficient assets to bring the value of the total collateral (the value of the Services Company LP units and the escrow account) up to the 125% minimum. Amounts deposited in the escrow account are returned to Buckeye when the value of the Services Company's LP units returns to an amount which exceeds the 125% minimum. At December 31, 2005 and March 31, 2006, the value of Buckeye's LP units held by Services Company exceeded the 125% requirement. The balance outstanding on the 3.60% ESOP Notes at December 31, 2005 and March 31, 2006 was $33.6 million and $32.1 million, respectively.

Buckeye

As described previously, Buckeye has a $400 million 5-year revolving credit facility (the "Credit Facility") with a syndicate of banks led by SunTrust Bank. The Credit Facility contains a one-time expansion feature to $550 million subject to certain conditions. Borrowings under the Credit Facility are guaranteed by certain of Buckeye's subsidiaries. The Credit Facility matures on August 6, 2009.

At December 31, 2005 and March 31, 2006, Buckeye had $50 million and $100 million outstanding under the Credit Facility, respectively, and another $1.3 million and $2 million used for letters of credit, respectively.

Borrowings under the Credit Facility bear interest under one of two rate options, selected by Buckeye, equal to either (i) the greater of (a) the federal funds rate plus one half of one percent and (b) SunTrust Bank's prime rate or (ii) the LIBOR plus an applicable margin. The applicable margin is determined based upon ratings assigned by Standard and Poors and Moody's Investor Services for Buckeye's senior unsecured non-credit enhanced long-term debt. The applicable margin, which was 0.5% at December 31, 2005 and March 31, 2006, will increase during any period in which Buckeye's Funded Debt Ratio (described below) exceeds 5.25 to 1.0. At December 31, 2005, Buckeye had $50 million outstanding under the Credit Facility and the weighted average interest rate of borrowings under the Credit Facility was 5.85%, consisting of $30 million borrowed at a LIBOR rate of 4.91% and $20 million borrowed at the base rate of 7.25%. The weighted average interest rate on amounts outstanding under the Credit Facility at March 31, 2006 was 5.22%.

The Credit Facility contains covenants and provisions which affect Buckeye including covenants and provisions that:

•: Restrict Buckeye and certain of its subsidiaries' ability to incur additional indebtedness based on certain ratios described below;
•: Prohibit Buckeye and certain of its subsidiaries from creating or incurring certain liens on its property;
•: Prohibit Buckeye and certain of its subsidiaries from disposing of property material to its operations; and
•: Limit consolidations, mergers and asset transfers by Buckeye and certain of its subsidiaries.

The Credit Facility requires that Buckeye and its subsidiaries maintain a maximum "Funded Debt Ratio" and a minimum "Fixed Charge Coverage Ratio." The Funded Debt Ratio equals the ratio of Buckeye's long-term debt (including the current portion, if any) to its earnings before interest, taxes, depreciation, depletion and amortization and incentive compensation payments to Buckeye GP ("Adjusted EBITDA") for the four preceding fiscal quarters. As of the end of any fiscal quarter, the Funded Debt Ratio may not exceed 4.75 to 1.00, subject to a provision for increases to 5.25 to 1.00 in connection with future acquisitions. At December 31, 2005 and March 31, 2006, Buckeye's Funded Debt Ratio was 4.37 to 1.00 and 4.40 to 1.00, respectively. The Fixed Charge Coverage Ratio is defined as the ratio of Adjusted EBITDA for the four preceding fiscal quarters to the sum of payments for interest and principal on debt plus certain capital expenditures required for the ongoing maintenance and operation of Buckeye's assets. Buckeye is required to maintain a Fixed Charge Coverage Ratio of greater than 1.25 to 1.00 as of the end of any fiscal quarter. As of December 31, 2005 and March 31, 2006, Buckeye's Fixed Charge Coverage Ratio was 2.98 to 1.00 and 2.86 to 1.00, respectively.

At December 31, 2005 and March 31, 2006, Buckeye was in compliance with the remainder of its covenants under the Credit Facility.

In January 2006, Buckeye borrowed $93 million under the Credit Facility in order to fund the acquisitions of a terminal in Niles, Michigan and a natural gas liquids pipeline located in Colorado and Kansas.

At December 31, 2005 and March 31, 2006, Buckeye also had outstanding $850 million of long-term debt consisting of:

•: $300 million aggregate principal amount of 4.625% Notes due 2013 (the "4.625% Notes"),
•: $275 million aggregate principal amount of 5.30% Notes due 2014 (the "5.30% Notes"),

•: $150 million aggregate principal amount of 6.75% Notes due 2033 (the "6.75% Notes"), and
•: $125 million aggregate principal amount of 5.125% Notes due 2017 (the "5.125% Notes").

Cash Flows from Operations

The components of cash flows from operations for the years ended December 31, 2003, 2004 and 2005 and three months ended March 31, 2005 and 2006 are as follows:

		Year Ended December 31,								Three Months Ended March 31,
		2003		2004			2005			2005			2006
		(in thousands)
Net income		$	13,606	$	2,327		$	6,986		$	1,228		$	2,239
Premium paid on retirement of long-term debt			45,464		3,531			—			—			—
Value of ESOP shares released			6,654		7,148			5,012			1,197			1,047
Depreciation and amortization			17,960		21,546			32,408			7,431			9,104
Non-controlling interest			22,583		78,140			99,704			23,198			23,197
Changes in current assets and liabilities			6,665		(13,758	)		(979	)		(11,421	)		(17,917	)
Changes in other assets and liabilities			2,740		5,272			5,832			1,313			1,394
Other			28		(179	)		1,974			2			785

	Total	$	115,700	$	104,027		$	150,937		$	22,948		$	19,849

Cash flows from operations were $19.8 million for the first three months of 2006, a decrease of $3.1 million from cash flows from operations in the first three months of 2005. Net income was $1.3 million for the first quarter of 2006 and $1.2 million for the first quarter of 2005. Depreciation and amortization was $9.1 million for the first quarter of 2006 compared to $7.4 million during the same period in 2005. The increase resulted principally from depreciation and amortization on the Northeast Pipelines and Terminals (acquired on May 5, 2005) and the NGL Pipeline (acquired on January 31, 2006) along with ongoing capital additions. Cash used for working capital was $17.9 million in the first quarter of 2006 compared to $11.4 million in the first quarter of 2005.

In the first quarter of 2006, the decrease in cash used for working capital resulted from increases in prepaid and other current assets of $6.0 million, construction and pipeline relocation receivables of $1.7 million, and trade receivables of $3.6 million and a decrease in accounts payable of $6.9 million. Prepaid and other current assets increased due to an increase in insurance receivables and an increase in a receivable for activity on the 29-mile ammonia pipeline acquired in November 2005. The increase in construction and pipeline relocation receivables is due to an increase in pipeline relocation activity in the first quarter of 2006. Trade receivables increased due to an increase in Buckeye's pipeline and terminal activities due to its acquisitions. The decrease in accounts payable resulted from the timing of invoice payments at year-end of 2005 as well as lower maintenance and outside service activities in the first quarter compared to year end.

In the first quarter of 2005, the decrease in cash used for working capital resulted principally from reductions in accounts payable of $7.9 million and accrued and other current liabilities of $5.5 million as well as an increase in trade receivables of $5.2 million, partially offset by a reduction in construction and pipeline relocation receivables of $3.2 million and prepaid and other current assets of $4.5 million. The decrease in accounts payable resulted principally from the timing of invoice payments at year-end 2004 as well as lower maintenance and outside service activities in the first quarter compared to year-end. Lower accrued and other current liabilities resulted from semi-annual interest payments on the 4.625% Notes and the 6.75% Notes totaling $12.0 million, most of which was accrued at year-end. The increase in trade receivables resulted principally from

the timing of billings related to terminals operations. The reduction in construction and pipeline relocation receivables resulted from the collection of a large construction contract completed in December 2004. The reduction in prepaid and other current assets resulted principally from the collection of insurance receivables in the first quarter.

Cash flows from operations were $150.9 million in 2005, compared to $104.0 million in 2004, an increase of $46.9 million. The reasons for the increase were an increase in net income, an increase in depreciation and amortization of $10.9 million (a non-cash expense), an increase in non-controlling interest, and a decrease in working capital, which were partially offset by the premium paid on retirement of long-term debt that occurred in 2004 that did not recur in 2005. Net income in 2005 increased by $4.7 million over net income in 2004, which is a result of an increase in incentive distributions offset by an increase in interest expense and the premium paid on the retirement of long-term debt of $3.5 million. Depreciation and amortization increased by $10.9 million as a result of the inclusion of the Midwest Pipelines and Terminals for twelve months in 2005 compared to three months in 2004, as well as the addition of the Northeast Pipelines and Terminals in May 2005, along with ongoing capital additions. Also, in 2004 we experienced a $13.8 million increase in working capital resulting from the operations Buckeye acquired with the Midwest Pipelines and Terminals which was not repeated in 2005 (working capital increased by $1.0 million). In 2005, increases in trade and other receivables of $6.4 million and construction and pipeline relocation receivables of $1.2 million (related to timing of pipeline billings) were principally offset by a reduction in prepaid and other current assets of $5.6 million and an increase in accounts payable and accrued liabilities of $1.6 million. In 2004, trade receivables increased by $15.4 million and construction receivables increased by $4.4 million. The increase in trade receivables was related to increased outstanding billings related primarily to the terminal assets acquired as part of the Midwest Pipelines and Terminals. In connection with terminal revenue, Buckeye bills on a monthly basis, compared to the weekly basis used in pipeline billings. Construction and pipeline relocation receivables increased in 2004 due to an increase in construction activity in the fourth quarter. Prepaid and other current assets increased by $4.3 million in 2004, principally related to Buckeye's insurance receivables associated with environmental claims. Partially offsetting these reductions in 2004 cash from operations were increases in accounts payable of $1.9 million and accrued and other current liabilities of $8.7 million. The 2004 increase in accrued and other current liabilities resulted from an increase in accrued interest payable related to the timing of the semi-annual interest payments due on Buckeye's 5.30% Notes issued in October 2004 and an increase in Buckeye's accrued environmental liabilities offset by a reduction in amounts accrued for Buckeye defined benefit plan.

Cash flows from operations were $104.0 million in 2004 compared to $115.7 million in 2003, a decrease of $11.7 million. The reasons for the decrease were decreases in net income and the premium paid on long term debt in 2004 as compared to 2003 and the 2004 increase in working capital of $13.8 million described above compared to a decrease in working capital of $6.7 million in 2003. In 2003, an increase in prepaid and other current assets of $10.2 million was more than offset by increases in accounts payable of $6.2 million and accrued and other current liabilities of $12.0 million. During 2003 trade receivables balances were essentially unchanged. In 2003, accounts payable increased by $6.2 million mostly due to certain insurance amounts payable at year-end. Accrued and other liabilities increased in 2003 by $12.0 million principally due to an increase in accrued interest related to the timing of the semi-annual interest payments due on Buckeye's 4.625% and 6.75% Notes. These changes more than offset the increases in non-controlling interest of $55.6 million and depreciation and amortization of $3.6 million.

Cash Flows from Investing Activities

Net cash used in investing activities for the years ended December 31, 2003, 2004 and 2005 and three months ended March 31, 2005 and 2006 are as follows:

		Year Ended December 31,								Three Months Ended March 31,
		2003			2004			2005		2005		2006
		(in millions)
Capital expenditures		$	42.3		$	72.8		$	77.8	$	21.5	$	18.3
Acquisitions and equity investments			36.0			761.0			210.2		—		92.8
Other			(18.9	)		(3.2	)		3.2		2.3		0.7

	Total	$	59.4		$	830.6		$	291.2	$	23.8	$	111.8

For the three months ended March 31, 2006, Buckeye expended $92.8 million related to acquisitions, including $79.3 million related to the NGL Pipeline, $12.5 million related to the acquisition of the Niles, Michigan terminal and approximately $1 million for miscellaneous asset acquisitions.

In 2005, cash used for acquisitions and equity investments consisted of the Northeast Pipelines and Terminals ($176.3 million), with the balance expended in connection with a terminal acquisition in Taylor, Michigan, a deposit for a natural gas liquids pipeline acquired in January 2006, the acquisition of an ammonia pipeline located near Houston, Texas and the acquisition of the remainder of the membership interests in WesPac-Reno LLC. In 2004, acquisitions and equity investments consisted of the acquisition of the Midwest Pipelines and Terminals and our acquisition of our Predecessor. In 2003, Buckeye invested $36.0 million for a 20% interest in West Texas LPG Pipeline Limited Partnership ($28.5 million) and an additional 7% interest in West Shore Pipe Line Company ($7.5 million). Our Predecessor also sold $18.0 million of short term investments in 2003.

In addition, in December 2005, Buckeye acquired an approximately 26-mile pipeline and a 40% interest in Muskegon Pipeline LLC ("Muskegon"). Muskegon owns an approximately 170-mile pipeline which extends from Griffith, Indiana to Muskegon, Michigan (together with the 26-mile pipeline, the "Pipeline Interests"). The Pipeline Interests were acquired in exchange for consideration that included capacity lease agreements (with purchase options) related to one of Buckeye's pipelines and a terminal. Buckeye has recorded the Pipeline Interests at their estimated fair values of $20.1 million, with $4.8 million allocated to the 26-mile pipeline and $15.3 million allocated to the 40% interest in Muskegon.

Capital expenditures are summarized below:

		Year Ended December 31,						Three Months Ended March 31,
		2003		2004		2005		2005		2006
		(in millions)
Sustaining capital expenditures:
Operating infrastructure		$	9.5	$	11.0	$	12.9	$	1.7	$	3.6
Pipeline and tank integrity			18.9		21.8		10.5		0.9		1.9

	Total sustaining		28.4		32.8		23.4		2.6		5.5
Expansion and cost reduction			13.9		40.0		54.4		18.9		12.8

	Total	$	42.3	$	72.8	$	77.8	$	21.5	$	18.3

In the first quarter of 2006, our capital expenditures were $18.3 million compared to $21.5 million in the first quarter of 2005. The decrease in capital expenditures resulted from a decrease of $6.1 million in expansion and cost reduction projects partially offset by an increase in sustaining capital expenditures, which consists of operating infrastructure and pipeline and tank integrity expenditures, of $2.9 million.

During 2005, our capital expenditures of $77.8 million increased by $5.0 million from $72.8 million in 2004. In 2005, sustaining capital expenditures decreased by $9.4 million to $23.4 million principally as a result of a reduction in pipeline and tank integrity capital expenditures of $11.3 million, which was only partially offset by an increase in operating infrastructure expenditures of $1.9 million. As described under "—Critical Accounting Policies and Estimates," until December 31, 2005 Buckeye's initial integrity expenditures on its pipelines and tanks were capitalized as part of pipeline cost when such expenditures improved or extended the life of the pipeline or related assets. Subsequent to December 31, 2005 integrity expenditures are expensed. During 2003 and 2004, Buckeye accelerated much of the expenditures required under its comprehensive integrity management plan. Please see "—Pipeline and Terminal Maintenance and Safety Regulation." Accordingly, in 2005 Buckeye was able to reduce such expenditures as it had completed a large portion of its initial integrity expenditures in previous periods. These expenditures included electronic internal inspections, other integrity expenditures and associated repairs and improvements. Also, an increasing portion of Buckeye's integrity expenditures were for subsequent inspections of pipeline and tank infrastructure, which were charged to expense. As a result, Buckeye charged $3.0 million of integrity expenditures to expense in 2005, compared to $0.9 million in 2004, when most of Buckeye's integrity expenditures were for initial integrity inspections. Effective January 1, 2006, Buckeye will begin charging all internal inspection integrity expenditures to expense, whether or not such expenditures are the initial or subsequent internal inspection. Buckeye expects to charge $7 million to $10 million of internal integrity expenditures to expense in 2006. Of this estimated range, approximately $2.8 million would have been capitalized under Buckeye's previous accounting policy, with the remainder charged to expense as a result of Buckeye's conducting subsequent internal inspections.

During 2005, operating infrastructure expenditures increased to $12.9 million principally as a result of $5.3 million of integration expenditures undertaken in connection with the acquisition of the Midwest Pipelines and Terminals in October 2004 and the acquisition of the Northeast Pipelines and Terminals in May 2005. Buckeye does not anticipate significant capital expenditures related to the integration of these assets in 2006.

Expansion and cost reduction projects in the first quarter of 2006 include the completion of an approximate 11-mile pipeline and related terminal facilities to serve Federal Express at the Memphis International Airport. This project is being implemented by WesPac Pipelines — Memphis LLC, a 75%-owned subsidiary of Buckeye. The pipeline and terminal construction project is supported by a long-term throughput and deficiency agreement entered into between WesPac Pipelines — Memphis LLC and Federal Express. Expansion projects in the first quarter of 2005 include a capacity expansion project related to the Laurel pipeline across Pennsylvania and the construction of the Memphis International Airport project. The Laurel pipeline project involved the construction of two new pump stations, and the expansion of an existing pump station at Macungie, Pennsylvania, and increased the capacity of the Laurel pipeline by 17%.

Expansion and cost reduction capital expenditures were $54.4 million in 2005, an increase of $14.4 million from $40.0 million in 2004. The majority of these expenditures related to two major projects. During 2005, Buckeye expended $33.7 million on an approximately 11-mile pipeline and associated terminal to serve the Memphis International Airport. In 2004, approximately $10.3 million was expended in connection with this project. Also in 2005, Buckeye expended approximately $9.3 million to complete a major expansion of its Laurel pipeline across Pennsylvania. In 2004, approximately $11.0 million was expended in connection with this project. The remaining

$11.4 million of expansion and cost reduction capital expended in 2005 related to various other projects including a butane blending project associated with Buckeye's Macungie, Pennsylvania station. In 2004, Buckeye expended approximately $12.8 million to complete the replacement of approximately 45 miles of pipeline in the Midwest between Lima, Ohio and Huntington, Indiana. The pipeline replacement project improved the reliability of the pipeline and expanded its capacity.

During 2004, our capital expenditures of $72.8 million increased by $30.5 million from 2003. During 2004, Buckeye's sustaining capital expenditures of $32.8 million increased by $4.4 million over 2003. In 2004 and 2003, Buckeye continued to emphasize its pipeline and tank integrity projects, including electronic internal inspections and other integrity assessments and associated repairs, as part of its comprehensive program to comply with legal requirements and to improve the reliability of its pipelines and terminals.

Expansion and cost reduction expenditures of $39.8 million increased by $26.1 million in 2004 over 2003. These expenditures related primarily to three projects. The first project, which commenced in 2003, involved the replacement of approximately 45 miles of pipeline in the Midwest between Lima, Ohio and Huntington, Indiana, for which approximately $12.8 million was expended in 2004. The remaining projects, which are mentioned above, included the Laurel pipeline expansion and the 11-mile pipeline and associated terminal construction project serving Federal Express at the Memphis International Airport.

Total capital expenditures among our three operating segments were as follows:

		Year Ended December 31,						Three Months Ended March 31,
		2003		2004		2005		2005		2006
		(in millions)
Pipeline Operations		$	34.8	$	67.3	$	70.3	$	21.4	$	14.2
Terminalling and Storage			2.6		3.6		7.0		—		3.9
Other Operations			4.8		1.8		0.5		0.1		0.1
Consolidating level			0.1		0.1		—		—		0.1

	Total	$	42.3	$	72.8	$	77.8	$	21.5	$	18.3

Buckeye expects to spend approximately $80 million in capital expenditures in 2006, of which approximately $30 million is expected to relate to sustaining capital expenditures and $50 million is expected to relate to expansion and cost reduction projects. Sustaining capital expenditures include renewals and replacement of tank floors and roofs, upgrades to station and terminalling equipment, field instrumentation and cathodic protection systems.

Expansion and cost reduction expenditures include projects to facilitate increased pipeline volumes, extend the pipeline incrementally to new facilities, expand terminal facilities or improve the efficiency of operations. Among the projects expected to be substantially completed in 2006 are a pipeline connection from a propane storage facility in Illinois to the Wood River pipeline system and the acquisition of a terminal in Indiana expected to enhance pipeline volumes on the Wood River pipeline system.

Cash Flows from Financing Activities

Primarily to fund its acquisition and internal growth opportunities (including the May 2005 acquisition of the Northeast Pipelines and Terminals and the October 2004 acquisition of the Midwest Pipelines and Terminals), Buckeye issued debt and equity securities in each of 2003, 2004 and 2005 and the first quarter of 2006, and borrowed amounts under the Credit Facility (portions of which were repaid with the proceeds from the issuance of debt and equity securities).

Our and Buckeye's financing transactions are summarized below.

Debt proceeds and payments

On June 30, 2005, Buckeye sold $125 million aggregate principal of its 5.125% Notes due July 1, 2017 in an underwritten public offering. Proceeds from the note offering, after underwriters' fees and expenses, were approximately $123.5 million. Proceeds from the offering were used in part to repay $122.0 million that was outstanding under the Credit Facility.

In December 2004, we entered into the Term Loan for $180 million which replaced our $100 million Senior Secured Credit Facility (the "Prior Credit Facility") that was entered into on May 4, 2004 in order to fund part of the acquisition of the Predecessor. The proceeds from the Term Loan were used to refund the amounts outstanding under the Prior Credit Facility and pay a distribution to our partners of $80 million.

On October 1, 2004, in connection with the acquisition of the Midwest Pipelines and Terminals, Buckeye borrowed a total of $490.0 million, consisting of $300.0 million under a 364-day interim loan (the "Interim Loan") and $190.0 million under the Credit Facility. On October 12, 2004, Buckeye sold $275.0 million aggregate principal amount of its 5.30% Notes due 2014 in an underwritten public offering. Proceeds from the note offering, after underwriter's discount and commissions, were approximately $272.1 million. Proceeds from the note offering, together with additional borrowings under the Credit Facility, were used to repay the Interim Loan.

On July 7, 2003, Buckeye sold $300 million aggregate principal amount of its 4.625% Notes due 2013 in an underwritten public offering. Proceeds from the note offering, after underwriters' fees and expenses, were approximately $296.4 million. On August 14, 2003, Buckeye sold $150 million aggregate principal amount of its 6.750% Notes due 2033 in a Rule 144A offering. The Notes were subsequently exchanged for equivalent notes which are publicly traded. Proceeds from the note offering, after underwriters' fees and expenses, were approximately $148.1 million. Proceeds from these offerings were used in part to repay all amounts then outstanding under Buckeye's prior credit facility and to repay Buckeye's $240 million Senior Notes and applicable yield maintenance premium of $45.5 million.

In connection with the repayment of the $240 million Senior Notes, Buckeye was required to pay a yield maintenance premium of $45.5 million. The yield maintenance premium was charged to expense in 2003 in the consolidated financial statements.

In addition to the above, Buckeye borrowed $24 million, $320 million and $250 million, and repaid $189 million, $247 million and $273 million under the Credit Facility or its prior credit facilities in 2003, 2004 and 2005, respectively. During the first three months of 2006, Buckeye borrowed $115 million under its Credit Facility and repaid $65 million, principally from the proceeds of a LP Unit offering.

Payments on the Term Loan were approximately $6.8 million and $4.3 million in 2005 and the first quarter of 2006, respectively. Payments on Services Company's ESOP Notes were $4.4 million, $5.6 million and $1.5 million in 2003, 2005 and the first quarter of 2006, respectively. In 2004 the ESOP Notes were refinanced from an interest rate of 7.24% to a rate of 3.60%. Payments in 2004

consisted of $49.3 million: $42 million to retire the previous notes, $2.1 million incurred as debt retirement fee on the transaction and ongoing principal payments of $5.2 million. The original proceeds from the previous notes were used to purchase Services Company's common stock.

Equity issuances

On March 7, 2006, Buckeye issued 1.5 million LP units in an underwritten public offering at $44.22 per LP unit. Proceeds from the offering, after underwriter's discount of $1.45 per LP unit and offering expenses, were approximately $64.2 million. Proceeds from the offering were used to reduce amounts outstanding under Buckeye's Credit Facility.

On May 17, 2005, Buckeye issued 2.5 million LP units in an underwritten public offering at $45.20 per LP unit. Proceeds from the offering, after underwriters' discount of $1.80 per LP unit and offering expenses, were approximately $108.4 million. Proceeds from the offering were used in part to repay $108 million that was outstanding under Buckeye's Credit Facility.

On February 7, 2005, Buckeye issued 1.1 million LP units in an underwritten public offering at $45.00 per LP unit. Proceeds from the offering, after underwriters' discount of $1.46 per LP unit and offering expenses, were approximately $47.7 million. Proceeds from the offering were used to reduce amounts outstanding under Buckeye's Credit Facility and to fund Buckeye's expansion and cost reduction capital expenditures.

On October 19, 2004, Buckeye issued 5.5 million LP units in an underwritten public offering at $42.50 per LP unit. Proceeds from the LP unit offering were approximately $223.3 million after underwriters' discount of $1.806 per LP unit and offering expenses and were used to reduce amounts outstanding under Buckeye's Credit Facility.

On May 4, 2004, MainLine issued: (1) 14,595 Class A Units to MainLine Management LLC (formerly BPL Management LLC) for $14,595; (2) 134,985,405 Class A Units to Carlyle/Riverstone BPL Holdings II, L.P. for $134,985,405; (3) 8,000,000 Class A Units to Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992, David J. Martinelli, Susan Martinelli Shea and William H. Shea, Jr., Trustees F/B/O Susan Martinelli Shea for $8,000,000; (4) 1,400,000 Class A Units to Stephen C. Muther for $1,400,000; (5) 500,000 Class A Units to Brian K. Jury for $500,000; (6) 500,000 Class A Units to Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992, David J. Martinelli and William H. Shea, Jr., Trustees F/B/O David Martinelli for $500,000; (7) 400,000 Class A Units to Eric A. Gustafson for $400,000; and (8) 150,000 Class A Units to Robert A. Malecky for $150,000. Aggregate proceeds of approximately $145.95 million were used to purchase our predecessor, Glenmoor.

On February 28, 2003, Buckeye issued 1,750,000 LP units in an underwritten public offering at $36.01 per LP unit. Net proceeds to Buckeye, after underwriters' discount of $1.62 per LP unit and offering costs, were approximately $59.9 million. The net proceeds were used to repay a portion of amounts outstanding under Buckeye's prior credit facility.

Equity distributions and proceeds

Distributions to non-controlling interests, consisting primarily of Buckeye's distributions to holders of its LP Units, were $26.7 million in the first three months of 2006 compared to $22.9 million in the first three months of 2005. The increase resulted principally from additional LP Units outstanding as a result of Buckeye's issuance of 1.1 million LP Units in February 2005, the issuance of 2.5 million LP Units in May 2005, and an increase in the distribution rate.

Distributions to non-controlling interest increased from $67.5 million in 2003 to $74.9 million in 2004 and to $97.8 million in 2005. Distributions in 2005 increased over 2004 as a result of increases in the unit distribution rate, the issuance of the 3.6 million LP units in 2005 and the payment of four

quarters of distributions on the 5.5 million LP units issued in October 2004 compared to only one quarter in 2004. Distributions in 2004 increased over 2003 as a result of increases in the unit distribution rate and the issuance of the 5.5 million LP units in October 2004.

Hedging activities

In accordance with requirements under the prior term loan, we purchased an interest rate cap from Goldman Sachs Capital Markets, L.P. on a notional amount of $50 million for $375,000. Under the interest rate cap, if the variable interest rate we paid on the prior term loan exceeded 5.0%, Goldman Sachs Capital Markets, L.P. would pay us the difference between the variable rate in effect on the $50 million notional amount and the capped rate. We did not designate the interest rate cap as a cash flow hedge and, accordingly, changes in value of the cap have been reflected in income. At December 31, 2004 and 2005 and March 31, 2006, the value of the interest rate cap was $145,000, $96,000 and $190,000, respectively. Interest expense included $230,000 and $49,000 for the period May 4 to December 31, 2004 and the year ended December 31, 2005, respectively. Interest expense was reduced by $94,000 for the three months ended March 31, 2006 due to changes in the value of the interest rate cap.

In accordance with requirements under our current Term Loan, we entered into two interest rate swap agreements with Goldman Sachs Capital Markets, L.P. We designated these transactions as hedges of our cash flow risk associated with the Term Loan. The first agreement, which terminated on December 22, 2005, was for a notional amount of $172.8 million and called for us to receive floating rate payments based on the notional amount times a rate equal to three-month LIBOR in exchange for paying a fixed rate based on the notional amount times 3.029%. The interest rate swap was effective December 22, 2004, the date of closing of the Term Loan, and terminated on December 22, 2005. The three-month LIBOR reset on dates that coincided with the reset dates for the variable interest rate of the Term Loan. The second agreement is for a notional amount of $86 million and calls for us to receive floating rate payments based on the notional amount times a rate equal to three-month LIBOR in exchange for paying a fixed rate based on the notional amount times 3.853%. The agreement became effective on December 22, 2005 and will terminate December 22, 2007. During 2005, we entered into another interest rate swap agreement. This agreement is for a notional amount of $12 million and calls for us to receive floating rate payments based on the notional amount times a rate equal to three-month LIBOR in exchange for paying a fixed rate based on the notional amount times 4.54%.

For the period May 4 to December 31, 2004, the year ended December 31, 2005 and the first quarter of 2006, we had no ineffectiveness with respect to our cash flow hedges and, accordingly, no change in the fair value of the hedge has been reflected in net income. The fair value of the interest rate swap agreements was a non-current liability of $11,000 at December 31, 2004 and a non-current asset of $1.5 million and $2.0 million at December 31, 2005 and March 31, 2006, respectively. Interest expense was reduced by $0.4 million for the year ended December 31, 2005 and $0.1 million for the quarter ended March 31, 2006, as a result of the interest rate swaps. A 1% increase or decrease in LIBOR would increase or decrease annual interest expense by $1 million.

In order to hedge a portion of its fair value risk related to the 4.625% Notes due 2013, on October 28, 2003, Buckeye entered into an interest rate swap agreement with a financial institution. The notional amount of the swap agreement was $100 million. The swap agreement called for Buckeye to receive fixed payments from the financial institution at a rate of 4.625% of the notional amount in exchange for floating rate payments from Buckeye based on the notional amount using a rate equal to the six-month LIBOR (determined in arrears) minus 0.28%. The swap agreement was scheduled to terminate on the maturity date of the 4.625% Notes and interest amounts under the swap agreement were payable semiannually on the same date as interest payments on the 4.625% Notes. Buckeye designated the swap agreement as a fair value hedge at the inception of the

agreement and elected to use the short-cut method provided for in Statement of Financial Accounting Standards No. 133, which assumes no ineffectiveness will result from the use of the hedge.

Buckeye terminated the interest rate swap agreement on December 8, 2004 and received proceeds of $2.0 million. Buckeye has deferred the $2.0 million gain as an adjustment to the fair value of the hedged portion of its debt and is amortizing the gain as a reduction of interest expense over the remaining life of the hedged debt. Interest expense was reduced by $2.6 million in 2004 and by $0.6 million in 2003 as a result of the interest rate swap agreement.

Operating Leases

We lease space in an office building and certain office equipment. Buckeye leases certain computing equipment and automobiles. Future minimum lease payments under these non-cancelable operating leases at December 31, 2005 were as follows: $888,000 for 2006, $435,000 for 2007, $305,000 for 2008 and none thereafter.

Buckeye's operating subsidiaries lease certain land and rights-of-way. Minimum future lease payments for these leases as of December 31, 2005 are approximately $4.2 million for each of the next five years. Substantially all of these lease payments may be canceled at any time should the leased property no longer be required for operations.

Rent expense under operating leases was $7,824,000, $8,477,000, $8,740,000 and $2,623,000 for the years ended December 31, 2003, 2004 and 2005 and the quarter ended March 31, 2006, respectively.

Contractual Obligations

Contractual obligations, as of December 31, 2005, are summarized in the following table:

		Payments Due by Period
Contractual Obligations		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
		(In thousands)
Debt		$	1,105,584	$	7,811	$	15,926	$	230,321	$	851,526
Interest payable on fixed debt obligations			589,449		46,106		91,516		90,583		361,244
Acquisitions			92,300		92,300		—		—		—
Operating leases			1,628		888		740		—		—
Other long-term obligations			10,458		1,743		3,486		3,486		1,743
Rights-of-way payments			20,930		4,186		8,372		8,372		—
Purchase obligations			16,933		16,933		—		—		—

	Total contractual cash obligations	$	1,837,282	$	169,967	$	120,040	$	332,762	$	1,214,513

Interest payable on fixed long-term debt obligations include semi-annual payments required for Buckeye's 4.625% Notes, 6.750% Notes, 5.30% Notes and 5.125% Notes. Amounts also include interest due under Services Company's ESOP Notes.

We have not included interest or principal payments associated with Buckeye's Credit Facility and our Term Loan because we are unable to determine the interest rates that will apply to the interest payments and the principal amounts which will be outstanding during the respective periods.

Amounts for acquisitions represent amounts for which Buckeye was contractually obligated to close, in January 2006, including a refined petroleum products terminal located in Niles, Michigan and a 350-mile natural gas liquids pipeline.

Purchase obligations generally represent commitments for recurring operating expenses or capital projects.

On March 1, 2006, an energy services agreement obligation of $10,458,000 was terminated as a result of Buckeye's purchase of the natural gas engines that were the source of the obligation.

Services Company's obligations related to its pension and post-retirement benefit plans are discussed in Note 14 in the accompanying consolidated financial statements.

Environmental Matters

Buckeye's operating subsidiaries are subject to federal, state and local laws and regulations relating to the protection of the environment. These laws and regulations, as well as Buckeye's own standards relating to protection of the environment, cause the operating subsidiaries to incur current and ongoing operating and capital expenditures. Environmental expenses are incurred in connection with emergency response activities associated with the release of petroleum products to the environment from Buckeye's pipelines and terminals, and in connection with longer term environmental remediation efforts which may involve groundwater monitoring and treatment. Buckeye regularly incurs expenses in connection with these environmental remediation activities. In 2005, Buckeye's operating subsidiaries incurred operating expenses of $9.3 million and, at December 31, 2005, had $21.4 million accrued for environmental matters. At December 31, 2005, Buckeye estimates that approximately $8 million of environmental expenditures incurred will be covered by insurance. These recovery amounts have not been included in expense in the financial statements. Buckeye maintains environmental liability insurance covering all of its pipelines and terminals with a per occurrence deductible in the amount of $2.5 million. Expenditures, both capital and operating, relating to environmental matters are expected to continue due to Buckeye's commitment to maintaining high environmental standards and to increasingly rigorous environmental laws.

Competition and Other Business Conditions

Buckeye conducts business without the benefit of exclusive franchises from government entities. In addition, Buckeye's pipeline operations generally operate as common carriers, providing transportation services at posted tariffs and without long-term contracts. Buckeye does not own the products it transports. Demand for the services provided by Buckeye derives from demand for petroleum products in the regions served and the ability and willingness of refiners, marketers and end-users to supply such demand by deliveries through its pipelines. Demand for petroleum products is primarily a function of price, prevailing general economic conditions and weather. Buckeye's businesses are, therefore, subject to a variety of factors partially or entirely beyond their control. Multiple sources of pipeline entry and multiple points of delivery, however, have historically helped maintain stable total volumes even when volumes at particular source or destination points have changed.

Buckeye's customer base was approximately 160 customers in 2005. Affiliates of Shell contributed 13% of consolidated revenue in 2005. Approximately, 6% of consolidated revenue generated by Shell was in the Pipeline Operations segment and the remaining 7% of consolidated revenue was generated in the Terminalling and Storage segment. The 20 largest customers accounted for 63% of consolidated revenue in 2005. For the years ended December 31, 2004 and 2003, no customer contributed more than 10% of consolidated revenue.

Generally, pipelines are the lowest cost method for long-haul overland movement of petroleum products. Therefore, Buckeye's most significant competitors for large volume shipments are other pipelines, many of which are owned and operated by major integrated oil companies. Although it is unlikely that a pipeline system comparable in size and scope to Buckeye's pipeline system will be built in the foreseeable future, new pipelines (including pipeline segments that connect with existing pipeline systems) could be built to effectively compete with Buckeye in particular locations.

Trucks competitively deliver petroleum products in a number of areas served by Buckeye. While their costs may not be competitive for longer hauls or large volume shipments, trucks compete effectively for certain volumes in many areas served by Buckeye. The availability of truck transportation places a significant competitive constraint on the ability of Buckeye to increase its tariff rates.

Privately arranged exchanges of petroleum products between marketers in different locations are another form of competition. Generally, such exchanges reduce both parties' costs by eliminating or reducing transportation charges. In addition, consolidation among refiners and marketers that has accelerated in recent years has altered distribution patterns, reducing demand for transportation services in some markets and increasing them in other markets.

Distribution of refined petroleum products depends to a large extent upon the location and capacity of refineries. However, because Buckeye's business is largely driven by the consumption of fuel in its delivery areas and its pipelines have numerous source points, Buckeye does not believe that the expansion or shutdown of any particular refinery is likely, in most instances, to have a material effect on its business. Certain of the pipelines which were acquired from Shell on October 1, 2004, the "Midwest Pipelines and Terminals," emanate from a refinery owned by ConocoPhillips and are located in the vicinity of Wood River, Illinois. While these pipelines are, in part, supplied by connecting pipelines, a temporary or permanent closure of the ConocoPhillips Wood River refinery could have a negative impact on volumes delivered through these pipelines. In addition, Marathon Oil Company recently completed a significant expansion of its refinery located in the Detroit, Michigan area. Buckeye is unable to determine whether the expansion of this Marathon refinery will have an impact on its business.

Buckeye's mix of products transported tends to vary seasonally. Declines in demand for heating oil during the summer months are, to a certain extent, offset by increased demand for gasoline and jet fuel. Overall, operations have been only moderately seasonal, with somewhat lower than average volume being transported during March, April and May and somewhat higher than average volume being transported in November, December and January.

Many of the general competitive factors discussed above such as demand for petroleum products and competitive threats from methods of transportation of petroleum products to end users other than pipelines, also impact Buckeye's terminal operations. In addition, Buckeye's terminals generally are in competition with other terminals in the same geographic market for terminal throughput business. Many competitive terminals are owned by major integrated oil companies. These major oil companies may have the opportunity for product exchanges which are not available to Buckeye's terminals. In addition, Buckeye's terminal throughput fees are not regulated. Terminal throughput fees are subject to price competition from competitive terminals and alternate modes of transporting petroleum products to end users such as retail gas stations.

Other independent pipeline companies, engineering firms and major integrated oil companies and petrochemical companies compete with Buckeye to operate and maintain pipelines. In addition, in many instances, it is more cost-effective for petrochemical companies to operate and maintain their own pipelines than to enter into agreements for Buckeye to operate and maintain such pipelines. Numerous engineering and construction firms compete with Buckeye for pipeline construction business.

Buckeye's Employee Stock Ownership Plan

Services Company provides the ESOP to the majority of its regular full-time employees hired before September 16, 2004. Certain employees covered by a union multi-employer pension plan and employees hired after September 16, 2004 do not participate in the ESOP. The ESOP owns all of the outstanding common stock of Services Company.

Services Company common stock is released to employee accounts in the proportion that current payments of principal and interest on the ESOP Notes bear to the total of all principal and interest payments due under the ESOP Notes. Individual employees are allocated shares based on the ratio of their eligible compensation to total eligible compensation. Eligible compensation generally includes base salary, overtime payments and certain bonuses. Except for the period March 1, 2003 through November 1, 2004, Services Company stock held in employee accounts received stock dividends in lieu of cash. The ESOP was amended to eliminate the payment of stock dividends on allocations made after February 28, 2003. Based upon provisions contained in the American Jobs Creation Act of 2004, the plan was amended further to reinstate this feature on allocations made after November 1, 2004. Total ESOP related costs charged to earnings were $10.0 million for the years ended December 31, 2003 and 2004, $6.9 million for the year ended December 31, 2005 and $1.5 million for the quarter ended March 31, 2006.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to select appropriate accounting principles from those available, to apply those principles consistently and to make reasonable estimates and assumptions that affect revenues and associated costs as well as reported amounts of assets and liabilities. The following describes the estimation risk underlying our critical accounting policies and estimates:

Depreciation Methods and Estimated Useful Lives of Property, Plant and Equipment

Property, plant and equipment is generally recorded at cost or fair value. Approximately 87% of our consolidated assets consist of property, plant and equipment consisting of pipeline and related transportation facilities, land, rights-of-way, buildings, leasehold improvements and machinery and equipment. The most significant of these assets are pipelines and related facilities, which, consistent with industry practice, are generally depreciated on a straight line basis over an estimated life of 50 years. Depreciation is the systemic and rational allocation of an asset's cost or fair value, less its residual value (if any), to the periods it benefits. Straight line depreciation results in depreciation expense being incurred evenly over the life of an asset.

The determination of an asset's useful life takes into account a number of factors including technological change, normal depreciation and actual physical usage. If any of these assumptions subsequently change, the estimated useful life of the asset could change and result in an increase or decrease in depreciation expense that could have a material impact on our financial statements.

At December 31, 2004 and 2005, the net book value of our consolidated property plant and equipment was $1.3 billion and $1.6 billion, respectively. Depreciation expense was $21.0 million

and $31.8 million for the years ending December 31, 2004 and 2005, respectively. We do not believe there is a reasonable likelihood that there will be a material change in the future estimated useful life of these assets. In the past. we generally have not determined it necessary to materially change the depreciable lives of our assets. However, a 10% reduction in the depreciable life of these assets, from 50 to 45 years, would increase annual depreciation expense, and reduce operating income by approximately $3.0 million annually.

Reserves for Environmental Matters

As discussed under "Environmental Matters" above, Buckeye's operating subsidiaries are subject to federal, state and local laws and regulations relating to the protection of the environment. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to existing conditions caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable, and the costs can be reasonably estimated based upon past experience and advice of outside engineering, consulting and law firms. Generally, the timing of these accruals coincides with Buckeye's commitment to a formal plan of action. Accrued environmental remediation related expenses include estimates of direct costs of remediation and indirect costs related to the remediation effort, such as compensation and benefits for employees directly involved in the remediation activities and fees paid to outside engineering, consulting and law firms. Historically, our estimates of direct and indirect costs related to the remediation effort have generally not required material adjustments, however the accounting estimates relative to environmental matters are uncertain because; (1) estimated future expenditures related to environmental matters are subject to cost fluctuations and can change materially, (2) unanticipated liabilities may arise in connection with environmental remediation projects and may impact cost estimates, and (3) changes in federal, state and local environmental regulations can significantly increase the cost or potential liabilities related to environmental matters. Buckeye maintains insurance which covers certain environmental expenditures. During 2003, 2004 and 2005, Buckeye's operating subsidiaries incurred environmental related operating expenses, net of insurance recoveries, of $4.9 million, $6.2 million and $9.3 million, respectively. At December 31, 2004 and 2005, the operating subsidiaries had accrued $16.8 million, which included $4.9 million related to the acquisition of the Midwest Pipelines and Terminals, and $21.4 million, respectively for environmental matters. During the first quarter of 2006, Buckeye incurred $1.8 million of operating expense related to environmental matters, net of insurance recoveries, and had accrued $25.4 million at March 31, 2006 for such matters. The environmental accruals are revised as new matters arise, or as new facts in connection with environmental remediation projects require a revision of estimates previously made with respect to the probable cost of such remediation projects. Changes in estimates of environmental remediation for each remediation project will affect operating income on a dollar-for-dollar basis up to Buckeye's self-insurance limit. Buckeye's self-insurance limit is currently $2.5 million per occurrence.

Related Party Transactions

In connection with its acquisition of the Predecessor, MainLine agreed to pay Carlyle Riverstone BPL Holdings II, L.P. ("CRF") an annual management fee of $300,000 for its services pursuant to a management oversight agreement. General and administrative expenses include $200,000 and $300,000 related to the management fee for the period May 4 to December 31, 2004 and the year ended December 31, 2005, respectively. During the first quarter of 2006, MainLine paid $75,000 to CRF for management services. In connection with the closing of this offering, the management oversight agreement will be terminated.

Services Company and Buckeye are considered related parties with respect to us and our Predecessor. Our financial statements and those of the Predecessor include the accounts of Services Company and Buckeye on a consolidated basis, and therefore all intercompany transactions have been eliminated.

With respect to additional related party transactions see "Certain Relationships and Related Transactions."

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement No. 123 (Revised 2004) "Share-Based Payment" ("SFAS No. 123R") which requires that compensation costs related to share-based payment transactions be recognized in our financial statements and effectively eliminates the intrinsic value method permitted by Accounting Principles Board Opinion No. 25. We have adopted SFAS No. 123R effective January 1, 2006 using the modified prospective method, as permitted under the Statement. The adoption of SFAS No. 123R did not have a material effect on our financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, "Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29" ("SFAS No. 153") which addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29, "Accounting for Nonmonetary Transactions", and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.

In March 2005, the FASB issued Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations" ("FIN 47"). FIN 47 clarifies the term conditional asset retirement obligation as used in FASB Statement No. 143, "Accounting for Asset Retirement Obligations" as a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. This interpretation became effective for us in the fiscal quarter ended December 31, 2005. The adoption of FIN 47 did not have a material effect on our consolidated financial statements.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, "Accounting Changes and Error Corrections" ("SFAS No. 154"). SFAS No. 154 provides guidance on the accounting for and reporting of changes in accounting principles, estimates, and error corrections. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

On June 30, 2005, FERC issued an Order on Accounting for Pipeline Assessment Costs (the "Order") to address what has been diverse practice by FERC-regulated pipeline companies (including natural gas pipelines and petroleum product pipelines like Buckeye) and to enhance comparability of financial statements filed with FERC. The Order, which became effective on January 1, 2006, requires companies to record certain costs related to pipeline integrity programs as capital and other costs as operating expenses in financial reports filed with FERC. Buckeye has disclosed that its practice is to capitalize integrity management expenditures when such expenditures improve or extend the life of the pipeline or related assets. Other integrity management costs are expensed as incurred. Buckeye's practice in this regard relates to pipeline internal inspection activities, which generally consist of the use of electronic devices placed in the pipeline to test for and measure anomalies in the pipeline. Prior to January 1, 2006, Buckeye's practice was to capitalize such costs the first time such internal inspections were performed

because they were part of a program designed to upgrade and improve Buckeye's overall pipeline system. Subsequent internal pipeline inspection activities were expensed as maintenance and repairs. Buckeye followed this practice for generally accepted accounting principles and periodic regulatory reports to FERC.

Buckeye has determined that, as of January 1, 2006, it will adopt the requirements of the Order for generally accepted accounting principles as well as regulatory purposes. The Company does not expect the adoption of the Order for generally accepted accounting principles purposes to have a material effect on the Company's financial statements, principally because Buckeye had completed the majority of its initial pipeline internal inspection activities as of January 1, 2006.

Quantitative and Qualitative Disclosures About Market Risk

Market Risk — Trading Instruments

Currently, we do not engage in hedging activity with respect to trading instruments.

Market Risk — Other than Trading Instruments

We are exposed to risk resulting from changes in interest rates. We do not have significant commodity or foreign exchange risk. Buckeye is exposed to fair value risk with respect to the fixed portion of its financing arrangements (the 5.125% Notes, the 5.30% Notes, the 4.625% Notes and the 6.750% Notes) and we and Buckeye are exposed to cash flow risk with respect to our variable rate obligations (Buckeye's Credit Facility and the Term Loan). Fair value risk represents the risk that the value of the fixed portion of the respective financing arrangements will rise or fall depending on changes in interest rates. Cash flow risk represents the risk that interest costs related to the Credit Facility and the Term Loan will rise or fall depending on changes in interest rates.

At December 31, 2005 and March 31, 2006, Buckeye had total fixed debt obligations at face value of $850 million, consisting of $125 million of the 5.125% Notes, $275 million of the 5.30% Notes, $300 million of the 4.625% Notes and $150 million of the 6.750% Notes. Services Company had fixed debt obligations of approximately $33.6 million at December 31, 2005 and $32.1 million at March 31, 2006 of its 3.60% ESOP Notes. The fair value of these obligations at December 31, 2005 and March 31, 2006 was approximately $891 million and $848 million, respectively. A 1% increase in rates for obligations of similar maturities would increase the fair value of these obligations by $73 million at December 31, 2005 and $68 million at March 31, 2006. Our variable debt obligation under the Term Loan was $173 million and $169 million at December 31, 2005 and March 31, 2006, respectively. Buckeye's variable debt obligation under the Credit Facility was $50 million and $100 million at December 31, 2005 and March 31, 2006, respectively. Based on the balances outstanding at December 31, 2005 and March 31, 2006, a 1% increase or decrease in interest rates would increase or decrease consolidated annual interest expense by $2.2 million and $2.7 million, respectively.

In accordance with requirements under the Prior Term Loan, we purchased an interest rate cap from Goldman Sachs Capital Markets, L.P. on a notional amount of $50 million for $375,000. Under the interest rate cap, if the variable interest rate we paid on the Prior Term Loan exceeded 5.0%, Goldman Sachs Capital Markets, L.P. would pay us the difference between the variable rate in effect on the $50 million notional amount and the capped rate. We did not designate the interest rate cap as a cash flow hedge and, accordingly, changes in value of the cap have been reflected in income. At December 31, 2005 and March 31, 2006, the value of the interest rate cap was $96,000 and $190,000, respectively.

In accordance with requirements under the Term Loan, we entered into two interest rate swap agreements with Goldman Sachs Capital Markets L.P., one of which was outstanding as of

December 31, 2005. We designated these transactions as hedges of our cash flow risk associated with the Term Loan. The currently effective agreement is for a notional amount of $86 million and calls for us to receive floating rate payments based on the notional amount times a rate equal to three-month LIBOR in exchange for paying a fixed rate based on the notional amount times 3.853%. The agreement became effective on December 22, 2005 and will terminate December 22, 2007. During 2005, we entered into another interest rate swap agreement. This agreement is for a notional amount of $12 million and calls for us to receive the floating rate payments based on the notional amount times a rate equal to three-month LIBOR in exchange for paying a fixed rate based on the notional amount times 4.54%.

For the period May 4 to December 31, 2004, the year ended December 31, 2005 and the quarter ended March 31, 2006, we had no ineffectiveness with respect to its cash flow hedges and, accordingly, no change in the fair value of the hedge has been reflected in net income. The fair value of the interest rate swap agreements was a non-current asset of $1.5 million and $2.0 million at December 31, 2005 and March 31, 2006, respectively. Interest expense was reduced by $0.4 million for the year ended December 31, 2005 and $0.1 million for the quarter ended March 31, 2006 as a result of the interest rate swap agreements. A 1% increase or decrease in LIBOR would increase or decrease annual interest expense by $1 million.

On October 28, 2003, Buckeye entered into an interest rate swap agreement with a financial institution in order to hedge a portion of its fair value risk associated with its 4.625% Notes. The notional amount of the swap agreement was $100 million. The swap agreement called for Buckeye to receive fixed payments from the financial institution at a rate of 4.625% of the notional amount in exchange for floating rate payments from Buckeye based on the notional amount using a rate equal to the six-month LIBOR (determined in arrears) minus 0.28%. The swap agreement was scheduled to settle on the maturity date of the 4.625% Notes and interest amounts under the swap agreement were payable semiannually on the same date as interest payments on the 4.625% Notes. Buckeye designated the swap agreement as a fair value hedge at the inception of the agreement and elected to use the short-cut method provided for in SFAS No. 133, which assumes no ineffectiveness will result from the use of the hedge. Buckeye terminated the interest rate swap agreement on December 8, 2004 and received proceeds of $2.0 million. Buckeye has deferred the $2.0 million gain as an adjustment to the fair value of the hedged portion of Buckeye's debt and is amortizing the gain as a reduction of interest expense over the remaining life of the hedged debt. Consolidated interest expense was reduced by $2.6 million in 2004 and by $0.6 million in 2003 as a result of the interest rate swap agreement.

BUSINESS

Buckeye GP Holdings L.P.

We own and control Buckeye GP LLC, which is the general partner of Buckeye Partners, L.P. (NYSE symbol: BPL), a publicly traded Delaware limited partnership. Our primary cash-generating assets are our general partner interests in Buckeye, which consist of (i) general partner units, or GP units, in Buckeye, (ii) the incentive distribution rights in Buckeye, and (iii) approximate one percent general partner interests in Buckeye's subsidiary operating partnerships. The incentive distribution rights entitle us to receive incentive distributions based upon the amount of quarterly cash distributions that Buckeye pays to its limited partners. As the amount of cash distributions paid by Buckeye to its limited partners meets certain target distribution levels, we receive payments equal to an increasing percentage of such cash distributions. Buckeye's most recent quarterly cash distribution was in excess of the highest distribution level. Based upon Buckeye's quarterly distribution of $0.75 per Buckeye limited partner unit, or LP unit, our initial quarterly cash distribution will be $0.205 per common unit, or $0.82 per unit on an annualized basis, to the extent we have sufficient cash from operations after establishment of cash reserves and payment of fees and expenses.

Buckeye is principally engaged in the transportation, terminalling and storage of petroleum products in the United States for major integrated oil companies, large refined products marketing companies and major-end users of petroleum products on a fee basis through facilities that Buckeye owns and operates. Buckeye owns and operates one of the largest independent petroleum products pipeline systems in the United States in terms of volumes delivered, with approximately 5,350 miles of pipeline, serving 17 states. Buckeye also operates approximately 2,100 miles of pipeline under agreements with major oil and chemical companies. Further, Buckeye owns and operates 45 active refined petroleum products terminals in Illinois, Indiana, Massachusetts, Michigan, Missouri, New York, Ohio and Pennsylvania with aggregate storage capacity of approximately 17.6 million barrels. Buckeye's pipelines service approximately 100 delivery locations, transporting petroleum products including gasoline, turbine fuel, diesel fuel, heating oil and kerosene from major supply sources to terminals and airports located within major end-use markets. These pipelines also transport other products, such as propane and butane, refinery feedstocks and blending components. Buckeye's transportation services are typically provided on a common-carrier basis under published tariffs. Buckeye's geographical diversity, connections to multiple sources of supply and extensive delivery system help create a stable business. Buckeye is an independent transportation provider that is not affiliated with any oil company or marketer of petroleum products and generally does not own the petroleum products that it transports.

Our Strengths and Strategies

We believe the following competitive strengths of Buckeye position us, through our ownership of the general partner of Buckeye, to execute successfully our business strategy:

•: Strategic location of Buckeye's assets. Buckeye's petroleum products pipeline systems and its terminal and storage facilities are strategically located, allowing Buckeye to promote high levels of overall throughput and incrementally increase pipeline and terminal volumes on its system. Buckeye's assets are primarily located in the northeast and upper midwest areas of the United States, which have historically experienced demand for refined products in

excess of local supply. The strategic location of its assets enables Buckeye to take advantage of domestic imbalances and international imports of petroleum products.

•: Cash flow stability due to the fee-based nature of Buckeye's business. Buckeye provides pipeline transportation services at posted tariffs, storage services for a fee and pipeline operation and maintenance services pursuant to contracts. In addition, because Buckeye generally does not take title to the products it transports, it has limited direct exposure to volatile commodity prices.
•: Unique market-based tariff. Buckeye Pipe Line Company L.P., Buckeye's largest operating subsidiary, has a market-based tariff program, approved by the Federal Energy Regulatory Commission, or FERC, providing Buckeye with more flexibility in its tariff pricing than is available under the producer price index pricing formula, which is used by most petroleum products pipelines.
•: Flexible sources of supply. Buckeye's pipeline system is connected to various refineries, third-party pipelines and import marine terminals, which provide flexibility in sourcing throughput. These connections, together with its strong customer relationships, enable Buckeye to maintain stable pipeline throughput.
•: Extensive industry experience. Buckeye has been in the pipeline business for over 100 years. Its senior management and operating personnel have extensive experience in all facets of Buckeye's operations. In addition, Buckeye's affiliation, through us, with Riverstone Holdings, LLC and The Carlyle Group, two leading private equity firms, provides additional management expertise and increased exposure to acquisition opportunities.

•: own and operate high-quality logistics assets;
•: increase throughput on those of its pipelines and terminals where it has available capacity;
•: expand its existing pipelines and terminals to facilitate customer-generated growth;
•: maintain and enhance the integrity of its pipelines and terminals;
•: focus on customer service in order to remain the provider of choice in the markets it serves; and
•: pursue selective strategic acquisition opportunities that complement its existing asset base or provide entry into new markets.

Our Interest in Buckeye

Our cash flows consist of distributions from Buckeye on the general partner interests we own, which consist of the following:

•

243,914 GP units in Buckeye (representing approximately 0.6% of Buckeye's outstanding units as of July 24, 2006);

•

the incentive distribution rights described below; and

•

approximately a 1% general partner interest in each of the following Buckeye subsidiaries:

•: Buckeye Pipe Line
•: Laurel

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•: Everglades
•: BPH.

We also own 80,000 LP units, representing a de minimis limited partner interest in Buckeye.

Since its initial public offering in 1986, as adjusted for LP unit splits, Buckeye has increased its quarterly distribution by approximately 173%, from $0.275 per LP unit, or $1.10 on an annualized basis, to a current level of $0.75 per LP unit, or $3.00 per LP unit on an annualized basis. Based upon Buckeye's quarterly distribution of $0.75 per LP unit, paid with respect to the first quarter of 2006, and the number of Buckeye LP units outstanding at March 31, 2006, we would receive a quarterly cash distribution of approximately $6.7 million (or approximately $26.8 million on an annualized basis), consisting of $0.5 million ($1.9 million annualized) from our GP units and approximate 1% general partner interest in Buckeye's subsidiary operating partnerships, $6.2 million ($24.7 million annualized) from the incentive distribution rights and $60,000 ($0.2 million annualized) from the 80,000 LP units that we own. This quarterly incentive distribution payment would be 17.0% of the aggregate quarterly cash distribution paid by Buckeye.

Our incentive distribution rights entitle us to receive amounts equal to specified percentages of the incremental amount of cash distributed by Buckeye to each of its LP units when target distribution levels for each quarter are exceeded. 2,573,146 LP units originally issued to Buckeye's Employee Stock Ownership Plan are excluded for the purpose of calculating incentive distributions. The target distribution levels begin at $0.325 and increase in steps to the highest target distribution level of $0.525 per eligible LP unit. When Buckeye makes quarterly distributions above this level, the incentive distributions include an amount equal to 45% of the incremental cash distributed to each eligible LP unit for the quarter, or approximately 29.5% of total incremental cash distributed by Buckeye above $0.525. Given the current level of quarterly distributions on Buckeye's LP units, the incentive distribution rights already participate at the 45% level. The following table illustrates the percentage allocations of distributions among the owners of Buckeye, including us, at the target distribution levels.

		Distributions to Us as a Percentage of Total Distributions(2)
Buckeye Quarterly Distribution Per LP Unit	Distributions to Owners of LP Units as a Percentage of Total Distributions(1)	GP Units	Incentive Distributions
up to $0.325	99.4%	0.6%	0.0%
above $0.325 up to $0.350	87.2%	0.5%	12.1%
above $0.350 up to $0.375	80.7%	0.5%	18.8%
above $0.375 up to $0.400	77.7%	0.5%	21.8%
above $0.400 up to $0.425	75.0%	0.5%	24.5%
above $0.425 up to $0.525	72.5%	0.4%	27.1%
above $0.525	70.1%	0.4%	29.5%

(1): Includes distributions made with respect to 80,000 LP units owned by us.
(2): Excludes distributions made with respect to 80,000 LP units owned by us.

The table above excludes distributions made by Buckeye's subsidiary operating partnerships with respect to our approximate 1% general partner interests in such subsidiaries. For more

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information on how our incentive distributions are calculated, please read "How We Make Cash Distributions—Our Sources of Distributable Cash and Incentive Distribution Rights."

•: Buckeye Partners has approximately 39.4 million LP units outstanding (including approximately 2.6 million which are not eligible for calculating incentive distributions); and
•: our continued ownership of 80,000 Buckeye LP units.

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comparable to any increase in Buckeye's distributions. In November 2006, we will pay a distribution equal to the initial quarterly distribution prorated for the portion of the quarter ending September 30, 2006 that we are a publicly traded partnership. However, we cannot assure you that any distributions will be declared or paid. Please read "Our Cash Distribution Policy and Restrictions on Distributions."

Buckeye Partners, L.P.

Overview

Buckeye Partners, L.P., is a publicly traded limited partnership organized in 1986 under the laws of the State of Delaware. Buckeye is principally engaged in the transportation, terminalling and storage of petroleum products in the United States for major integrated oil companies, large refined products marketing companies and major end users of petroleum products on a fee basis through facilities that it owns and operates. Buckeye also operates pipelines owned by third parties under contracts with major integrated oil and chemical companies and performs pipeline construction activities, generally for these same customers.

Buckeye owns and operates one of the largest independent petroleum products pipeline systems in the United States in terms of volumes delivered, with approximately 5,350 miles of pipeline, serving 17 states. Buckeye also operates approximately 2,100 miles of pipeline under agreements with major oil and chemical companies. Further, Buckeye owns and operates 45 active refined petroleum products terminals in Illinois, Indiana, Massachusetts, Michigan, Missouri, New York, Ohio and Pennsylvania with aggregate storage capacity of approximately 17.6 million barrels.

Buckeye's pipelines service approximately 100 delivery locations, transporting petroleum products including gasoline, turbine fuel, diesel fuel, heating oil and kerosene from major supply sources to terminals and airports located within major end-use markets. These pipelines also transport other products, such as propane and butane, refinery feedstocks and blending components. Buckeye's transportation services are typically provided on a common-carrier basis under published tariffs for customers. Buckeye's geographical diversity, connections to multiple sources of supply and extensive delivery system help create a stable base business. Buckeye is an independent transportation provider that is not affiliated with any oil company or marketer of petroleum products and generally does not own the petroleum products that it transports.

Buckeye currently conducts all of its operations through the following seven subsidiaries, which we refer to as Buckeye's operating subsidiaries:

•: Buckeye Pipe Line owns a 2,643-mile interstate common carrier refined petroleum products pipeline system serving major population centers in eight states. It is the primary turbine fuel provider to John F. Kennedy International Airport, LaGuardia Airport, Newark International Airport and certain other airports within its service territory.
•: Laurel owns a 345-mile intrastate common carrier refined products pipeline connecting five Philadelphia area refineries to 10 delivery points across Pennsylvania.
•: Wood River owns six refined petroleum products pipelines with aggregate mileage of approximately 925 miles located in Illinois, Indiana, Missouri and Ohio.
•: BPL Transportation owns a refined petroleum products pipeline system with aggregate mileage of approximately 478 miles located in New Jersey, New York and Pennsylvania.
•: Everglades owns a 37-mile intrastate common carrier refined petroleum products pipeline connecting Port Everglades, Florida to Ft. Lauderdale Hollywood International Airport and Miami International Airport.

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•: Buckeye NGL owns an approximate 350-mile natural gas liquids pipeline extending generally from the Wattenberg, Colorado area to Bushton, Kansas.
•: BPH owns (or in certain instances leases from Buckeye's other subsidiaries) and operates 45 refined petroleum products terminals with aggregate storage capacity of approximately 17.6 million barrels, and owns interests in 535 miles of pipelines in the Midwest, Southwest and West Coast. BPH operates, through its subsidiary Buckeye Gulf Coast Pipe Lines, L.P., or BGH, pipelines in the Gulf Coast region for third parties. BPH also holds minority stock interests in two midwest products pipelines and a natural gas liquids pipeline system.

Buckeye's Business Strategy

Buckeye's objective is to increase the value of its limited and general partner interests by consistently increasing its cash flow and, accordingly, its cash available for distributions to its unitholders, including us. Buckeye's business strategy to accomplish this objective is to:

•: Own and operate high-quality logistics assets;
•: Increase throughput on those of its pipelines and terminals where it has available capacity;
•: Expand its existing pipelines and terminals to facilitate customer-generated growth;
•: Maintain and enhance the integrity of its pipelines and terminals;
•: Focus on customer service in order to remain the provider of choice in the markets it serves; and
•: Pursue selective strategic acquisition opportunities that complement its existing asset base or provide entry into new markets.

Buckeye continually evaluates new acquisition opportunities. Consistent with its balanced risk profile, Buckeye focuses its acquisition efforts on stable cash flow businesses with a substantial fee-based component. Since 1999, Buckeye has invested approximately $1.1 billion in acquisitions of various pipeline and terminal businesses and major capital expansion projects. In recent years, major independent and integrated oil and gas companies have sold midstream assets, continuing the trend of rationalization of the energy infrastructure in the United States. We expect this trend will continue and believe Buckeye is well-positioned to take advantage of these opportunities.

Buckeye's Business Activities

The following discussion describes the business activities of Buckeye's operating segments.

Pipeline Operations

Buckeye owns and operates petroleum products pipelines which receive petroleum products from refineries, connecting pipelines and bulk and marine terminals, and transports those products to other locations. In 2001 petroleum products transportation accounted for substantially all of Buckeye's consolidated revenues. In 2002, 2003, 2004 and 2005, petroleum products transportation accounted for approximately 87%, 86%, 82% and 75% of Buckeye's consolidated revenues, respectively. In 2005, approximately 6% of consolidated revenue was generated by affiliates of Shell in Pipeline Operations.

Buckeye transported an average of approximately 1,200,600 barrels of petroleum products per day in 2004 and approximately 1,385,400 barrels per day in 2005. The following table shows the average daily volume and percentage of petroleum products Buckeye transported over the five years ended December 31, 2001, 2002, 2003, 2004 and 2005.

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Volume and Percentage of Refined Petroleum Products Transported(a)

	Year Ended December 31,
	2001			2002			2003			2004			2005
	Volume	Percent		Volume	Percent		Volume	Percent		Volume	Percent		Volume	Percent
Gasoline	540.7	49.6	%	556.4	50.5	%	578.8	50.9	%	609.0	50.7	%	721.2	52.0	%
Jet Fuels	260.0	23.8	%	250.9	22.8		248.5	21.9		273.1	22.8		323.6	23.4
Middle Distillates(b)	266.8	24.5	%	265.4	24.1		285.4	25.1		293.0	24.4		319.6	23.1
Other Products	22.9	2.1	%	28.7	2.6		23.7	2.1		25.5	2.1		21.0	1.5
Total	1,090.4	100.0	%	1,101.4	100.0	%	1,136.4	100.0	%	1,200.6	100.0	%	1,385.4	100.0	%

(a): Excludes local product transfers.
(b): Includes diesel fuel, heating oil, kerosene and other middle distillates.

Buckeye provides pipeline transportation service in the following states: California, Colorado, Connecticut, Florida, Illinois, Indiana, Kansas, Massachusetts, Michigan, Missouri, New Jersey, Nevada, New York, Ohio, Pennsylvania and Tennessee.

Pennsylvania — New York — New Jersey. Buckeye Pipe Line serves major population centers in Pennsylvania, New York and New Jersey through 928 miles of pipeline. Refined petroleum products are received at Linden, New Jersey from approximately 17 major source points, including two refineries, six connecting pipelines and nine storage and terminalling facilities. Products are then transported through two lines from Linden, New Jersey to Macungie, Pennsylvania. From Macungie, the pipeline continues west through a connection with the Laurel pipeline to Pittsburgh, Pennsylvania (serving Reading, Harrisburg, Altoona/Johnstown and Pittsburgh, Pennsylvania) and north through eastern Pennsylvania into New York (serving Scranton/Wilkes-Barre, Binghamton, Syracuse, Utica, Rochester and, via a connecting carrier, Buffalo, New York). Buckeye Pipe Line leases capacity in one of the pipelines extending from Pennsylvania to upstate New York to a major oil pipeline company. Products received at Linden, New Jersey are also transported through one line to Newark International Airport and through two additional lines to JFK and LaGuardia airports and to commercial refined products terminals at Long Island City and Inwood, New York. These pipelines supply JFK, LaGuardia and Newark International Airports with substantially all of each airport's turbine fuel requirements.

In addition, BPL Transportation's pipeline system acquired from ExxonMobil in May 2005 delivers refined products from the Valero refinery located in Paulsboro, New Jersey to destinations in New Jersey, Pennsylvania, and New York. A portion of the pipeline system extends from Paulsboro, New Jersey to deliver products to Malvern, Pennsylvania. From Malvern, a pipeline segment delivers product to locations in upstate New York, while another segment delivers refined products to central Pennsylvania. Two shorter pipeline segments connect the Valero refinery to the Colonial pipeline system and the Philadelphia International Airport, respectively.

The Laurel pipeline system transports refined petroleum products through a 345-mile pipeline extending westward from five refineries and a connection to the Colonial pipeline system in the Philadelphia area to Reading, Harrisburg, Altoona/Johnstown and Pittsburgh, Pennsylvania.

Illinois — Indiana — Michigan — Missouri — Ohio. Buckeye Pipe Line and Norco Pipe Line Company, LLC, a subsidiary of BPH, transport refined petroleum products through 2,025 miles of pipeline in northern Illinois, central Indiana, eastern Michigan, western and northern Ohio and western Pennsylvania. A number of receiving lines and delivery lines connect to a central corridor which runs from Lima, Ohio through Toledo, Ohio to Detroit, Michigan. Refined petroleum products are received at a refinery and other pipeline connection points near Toledo, Lima, Detroit and East Chicago, Illinois. Major market areas served include Peoria, Illinois; Huntington/Fort Wayne,

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Indianapolis and South Bend, Indiana; Bay City, Detroit and Flint, Michigan; Cleveland, Columbus, Lima and Toledo, Ohio and Pittsburgh, Pennsylvania.

Wood River owns six refined petroleum products pipelines with aggregate mileage of approximately 925 miles located in the midwestern United States. Refined petroleum products are received at the ConocoPhillips Wood River refinery in Illinois and transported to the Chicago area, to a terminal in the St. Louis, Missouri area and to the Lambert St. Louis Airport, to receiving points across Illinois and Indiana and to Buckeye Pipe Line's pipeline in Lima, Ohio. At Buckeye's tank farm located in Hartford, Illinois, one of Wood River's pipelines also receives refined petroleum products from the Explorer pipeline which are transported to Buckeye's 1.3 million barrel terminal located on the Ohio River in Mt. Vernon, Indiana. Wood River also owns an approximately 26-mile pipeline that extends from Marathon's Wood River Station in Southern Illinois to a third party terminal in the East St. Louis, Missouri area.

Colorado — Kansas. Buckeye NGL owns an approximately 350-mile natural gas liquids pipeline that extends generally from the Wattenberg, Colorado area to Bushton, Kansas. This pipeline was acquired from BP Pipelines (North America) Inc. in January 2006.

Other Refined Products Pipelines. Buckeye Pipe Line serves Connecticut and Massachusetts through 112 miles of pipeline, which we refer to as the Jet Lines System, that carry refined products from New Haven, Connecticut to Hartford, Connecticut and Springfield, Massachusetts.

Everglades transports primarily turbine fuel on a 37-mile pipeline from Port Everglades, Florida to Ft. Lauderdale-Hollywood International Airport and Miami International Airport. Everglades supplies Miami International Airport with substantially all of its turbine fuel requirements.

WesPac Pipelines-Reno LLC, or WesPac Reno, owns a 3-mile pipeline serving the Reno/Tahoe International Airport. WesPac Pipelines-San Diego LLC, or WesPac San Diego, owns a 4.3 mile pipeline serving the San Diego International Airport. WesPac Pipelines-Memphis LLC, or WesPac Memphis, has constructed and operates an 11-mile pipeline and related terminal facilities to serve Memphis International Airport. Each of the WesPac entities originally was a joint venture between BPH and Kealine Partners. In May 2005, BPH purchased the membership interest in WesPac Reno owned by Kealine Partners for approximately $2.5 million. Thus, at December 31, 2005, BPH owns 100% of WesPac Reno. BPH has a 75% ownership interest in WesPac Memphis and a 50% ownership interest in WesPac San Diego. Kealine Partners owns the remaining interest in these two joint ventures. As of December 31, 2005, Buckeye had provided an aggregate of approximately $40.3 million in intercompany debt financing to these WesPac entities.

Terminalling and Storage

Through BPH and its subsidiary, Buckeye Terminals, Buckeye's Terminalling and Storage segment owns and operates 45 terminals located in Illinois, Indiana, Massachusetts, Michigan, Missouri, New York, Ohio and Pennsylvania that provide bulk storage and throughput services and have the capacity to store an aggregate of approximately 17.6 million barrels of refined petroleum products. In addition, Buckeye Terminals owns five currently idled terminals with an aggregate storage capacity of approximately 924,000 barrels. In 2001, 2002, 2003, 2004 and 2005, terminalling and storage activities provided approximately 7%, 8%, 6%, 8% and 17% of consolidated revenues, respectively. In addition, affiliates of Shell contributed 7% of consolidated revenue in Terminalling and Storage activities in 2005.

Buckeye's refined products terminals receive refined products from pipelines and distribute them to third parties, who in turn deliver them to end-users and retail outlets. Buckeye's refined products terminals play a key role in moving refined products to the end-user market by providing storage and inventory management, distribution, blending to achieve specified grades of gasoline,

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and other ancillary services that include the injection of ethanol and other additives. Typically, Buckeye's terminal facilities consist of multiple storage tanks and are equipped with automated truck loading equipment that is available 24 hours a day. This automated system provides for control of allocations, credit and carrier certification.

Buckeye's refined products terminals derive most of their revenues from terminalling fees paid by customers. A fee is charged for receiving refined products into the terminal and delivering them to trucks, barges, or pipelines. In addition to terminalling fees, Buckeye's revenues are generated by charging customers fees for blending and injecting additives, and, in certain instances, leasing terminal capacity to customers on either a short-term or long-term basis. Of Buckeye's 45 refined products terminals, 32 are connected to Buckeye's pipelines, and 13 are not connected to Buckeye's pipelines.

In December 2005, Buckeye Terminals acquired a refined products terminal located in Taylor, Michigan from affiliates of Atlas Oil Company. The terminal has aggregate storage capacity of approximately 260,000 barrels, as well as rail offloading capabilities used to offload ethanol for blending with gasoline at the terminal.

The table below sets forth the total average daily throughput for the refined products terminals in each of the years and quarters presented:

		Year Ended December 31,						Three Months Ended March 31,
		2003		2004		2005		2005		2006
Refined products throughput (barrels per day)		73,000		160,900		419,200		382,500		447,400

The following table outlines the number of terminals and storage capacity in barrels by state:

State		Number of Terminals	Storage Capacity
			(in thousands)
Illinois		5	1,574
Indiana		9	6,847
Massachusetts		1	106
Michigan		6	1,792
Missouri		2	345
New York		9	2,067
Ohio		9	3,501
Pennsylvania		4	1,372

	Total	45	17,604

Other Operations

The business of Buckeye's Other Operations segment consists primarily of pipeline operation and maintenance services and pipeline construction services for third parties pursuant to contractual arrangements. Buckeye Gulf Coast Pipe Lines, L.P., or Buckeye Gulf Coast, a wholly owned subsidiary of BPH, is a contract operator of pipelines owned in Texas by major petrochemical companies. Buckeye Gulf Coast currently has 11 operations and maintenance contracts in place. In addition, Buckeye Gulf Coast owns a 29-mile ammonia pipeline and a 23-mile pipeline located in Texas and leases a portion of the pipeline to a third-party chemical company. Subsidiaries of Buckeye Gulf Coast also own an approximate 63% interest in a crude butadiene

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pipeline between Deer Park, Texas and Port Arthur, Texas. Volumes of crude butadiene transported on this pipeline, known as the Sabina pipeline, are supported by a long-term throughput agreement with Sabina Petrochemicals, LLC. Buckeye Gulf Coast also provides engineering and construction management services to major chemical companies in the Gulf Coast area.

In 2001, 2002, 2003, 2004 and 2005, other operations activities generated revenues of approximately 4%, 5%, 9%, 10% and 8% of consolidated revenues, respectively.

Other Investments

BPH owns a 24.99% equity interest in West Shore Pipe Line Company, or West Shore. West Shore owns and operates a pipeline system that originates in the Chicago, Illinois area and extends north to Green Bay, Wisconsin and west and then north to Madison, Wisconsin. The pipeline system transports refined petroleum products to markets in northern Illinois and Wisconsin. The other equity holders of West Shore are a number of major oil companies. The pipeline is operated under contract by Citgo Pipeline Company.

BPH also owns a 20% equity interest in West Texas LPG Pipeline, L.P. West Texas LPG Pipeline, L.P. owns and operates a pipeline system that delivers natural gas liquids to Mont Belvieu, Texas for fractionation. The natural gas liquids are delivered to the WTP pipeline system from the Rocky Mountain region via connecting pipelines and from gathering fields located in West and Central Texas. The majority owners and the operators of WTP are affiliates of ChevronTexaco, Inc.

BPH also owns a 40% equity interest in Muskegon Pipeline LLC, or Muskegon. The majority owner of Muskegon is Marathon Pipe Line LLC. Muskegon owns an approximately 170-mile pipeline that delivers petroleum products from Griffith, Indiana to Muskegon, Michigan. The pipeline is operated by Marathon Pipe Line LLC.

Employees

At December 31, 2005, Services Company employed all of the employees that work for Buckeye's operating subsidiaries. At December 31, 2005, Services Company had 801 full-time employees. Prior to December 26, 2004, the 122 employees of Norco, Buckeye Gulf Coast and Buckeye Terminals, each a wholly-owned subsidiary of BPH, were employed directly by each respective entity. On December 26, 2004, these employees became employees of Services Company. Under a Services Agreement among Services Company and Buckeye's operating subsidiaries, Services Company continues to employ the employees that work for Buckeye's operating subsidiaries, and is reimbursed by Buckeye's operating subsidiaries and their subsidiaries for the costs of those services. Under the Services Agreement, certain executive compensation costs and related benefits are not reimbursed by Buckeye or its operating subsidiaries, but are instead reimbursed by MainLine Sub LLC pursuant to an Executive Employment Agreement between MainLine Sub LLC, Buckeye GP LLC and Services Company.

Government Regulation

General

Buckeye Pipe Line, Wood River, BPL Transportation, Buckeye NGL and Norco operate pipelines in interstate common carrier services subject to the regulatory jurisdiction of FERC under the Interstate Commerce Act and the Department of Energy Organization Act. FERC regulation requires that interstate oil pipeline rates be posted publicly and that these rates be "just and reasonable" and non-discriminatory. FERC regulation also enforces common carrier obligations and specifies a uniform system of accounts. In addition, Wood River, Buckeye Pipe Line, BPL Transportation, Buckeye NGL, Norco and the other operating subsidiaries are subject to the

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jurisdiction of certain other federal agencies with respect to environmental and pipeline safety matters.

The operating subsidiaries are also subject to the jurisdiction of various state and local agencies, including, in some states, public utility commissions which have jurisdiction over, among other things, intrastate tariffs, the issuance of debt and equity securities, transfers of assets and pipeline safety. Laurel operates a pipeline in intrastate service across Pennsylvania and its tariff rates are regulated by the Pennsylvania Public Utility Commission. Wood River operates a pipeline in intrastate service in Illinois and tariff rates related to this pipeline are regulated by the Illinois Commerce Commission.

FERC Rate Regulation

The generic oil pipeline regulations issued under the Energy Policy Act of 1992 rely primarily on an index methodology, whereby a pipeline is allowed to change its rates in accordance with an index (currently the Producer Price Index, or PPI, plus 1.3%) that FERC believes reflects cost changes appropriate for application to pipeline rates. This methodology is used to establish rates on the pipelines owned by Wood River, BPL Transportation, Buckeye NGL and Norco. The indexing method allows a pipeline to increase its rates by a percentage equal to the change in the annual producer price index for finished goods, or PPI, plus 1.3 percent. If the percentage is negative, Buckeye could be required to reduce the rates charged by Wood River, BPL Transportation, Buckeye NGL and Norco if they exceed the new maximum allowable rate.

In addition, in decisions involving unrelated pipeline limited partnerships, FERC had a longstanding rule that pass-through entities, like Buckeye, may not claim an income tax allowance for income attributable to non-corporate limited partners in justifying the reasonableness of their rates. Buckeye's general partner believes only a small percentage of Buckeye's LP units are held by corporations. Further, in a July 2004 decision involving an unrelated pipeline limited partnership, the United States Court of Appeals for the District of Columbia Circuit overruled a prior FERC decision allowing a limited partnership to claim a partial income tax allowance. This opinion suggested that in the future a limited partnership may not be able to claim any income tax allowance despite being partially owned by a corporation. In December 2004, FERC issued a Notice of Inquiry seeking comments regarding whether the July 2004 appeals court decision applies only to the specific facts of that case, or whether it applies more broadly, and, if the latter, what effect that ruling might have on energy infrastructure investments. On May 4, 2005, FERC adopted a policy statement providing that all entities owning public utility assets — oil and gas pipelines and electric utilities — would be permitted to include an income tax allowance in their cost-of-service rates to reflect the actual or potential income tax liability attributable to their public utility income, regardless of the form of ownership. FERC determined that any pass-through entity seeking an income tax allowance in a rate proceeding must establish that its partners have an actual or potential income tax obligation on the entity's public utility income. The amount of any income tax allowance will be reduced accordingly to the extent that any of the partners do not have an actual or potential income tax obligation. This reduction will be reflected in the weighted income tax liability of the entity's partners. Whether a pipeline's owners have such actual or potential income tax liability will be reviewed by the FERC on a case-by-case basis. This policy was applied by FERC in June 2005 with an order involving SFPP, L.P. FERC found that SFPP, L.P. should be afforded an income tax allowance on all of its partnership interests to the extent that the ultimate owners of those interests had an actual or potential income tax obligation during the periods at issue for the income of a jurisdictional pass-through entity. In December 2005, FERC reaffirmed its new income tax allowance policy as it applies to SFPP, L.P. It directed SFPP, L.P. to provide certain evidence necessary for determination of its income tax allowance. FERC's remand decision of the July 2004 opinion and the new tax allowance policy have been appealed to the United States Court

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of Appeals for the District of Columbia Circuit. Rehearing of the December 2005 order has also been sought. The ultimate outcome of these proceedings is not certain and could result in changes to the FERC's treatment of income tax allowances in cost of service. We expect the final adoption and implementation by FERC of the policy statement in individual cases will be subject to review by the United States Court of Appeals.

A shipper or FERC could cite these decisions in a protest or complaint challenging indexed rates maintained by certain of Buckeye's operating subsidiaries. If a challenge were brought and FERC were to find that some of the indexed rates exceed levels justified by the cost of service, FERC could order a reduction in the indexed rates and could require reparations. As a result, our results of operations could be adversely affected.

Under FERC's regulations, as an alternative to indexed rates, a pipeline may be allowed to charge market-based rates if the pipeline establishes that it does not possess significant market power in a particular market.

Buckeye Pipe Line's rates are governed by an exception to the rules discussed above, pursuant to specific FERC authorization. Buckeye Pipe Line's market-based rate regulation program was initially approved by FERC in March 1991 and was subsequently extended in 1994. Under this program, in markets where Buckeye Pipe Line does not have significant market power, individual rate increases: (a) will not exceed a real (i.e., exclusive of inflation) increase of 15% over any two-year period (the "rate cap"), and (b) will be allowed to become effective without suspension or investigation if they do not exceed a "trigger" equal to the change in the Gross Domestic Product implicit price deflator since the date on which the individual rate was last increased, plus 2%. Individual rate decreases will be presumptively valid upon a showing that the proposed rate exceeds marginal costs. In markets where Buckeye Pipe Line was found to have significant market power and in certain markets where no market power finding was made: (i) individual rate increases cannot exceed the volume-weighted average rate increase in markets where Buckeye Pipe Line does not have significant market power since the date on which the individual rate was last increased and (ii) any volume-weighted average rate decrease in markets where Buckeye Pipe Line does not have significant market power must be accompanied by a corresponding decrease in all of Buckeye Pipe Line's rates in markets where it does have significant market power. Shippers retain the right to file complaints or protests following notice of a rate increase, but are required to show that the proposed rates violate or have not been adequately justified under the market-based rate regulation program, that the proposed rates are unduly discriminatory, or that Buckeye Pipe Line has acquired significant market power in markets previously found to be competitive.

The Buckeye Pipe Line program was subject to review by FERC in 2000 when FERC reviewed the index selected in the generic oil pipeline regulations. FERC decided to continue the generic oil pipeline regulations with no material changes and did not modify or discontinue Buckeye Pipe Line's program. We cannot predict the impact that any change to Buckeye Pipe Line's rate program would have on Buckeye Pipe Line's operations. Independent of regulatory considerations, we expect that tariff rates will continue to be constrained by competition and other market factors.

Environmental Matters

The operating subsidiaries are subject to federal, state and local laws and regulations relating to the protection of the environment. Although we believe that the operations of the operating subsidiaries comply in all material respects with applicable environmental laws and regulations, risks of substantial liabilities are inherent in pipeline operations, and there can be no assurance that material environmental liabilities will not be incurred. Moreover, it is possible that other developments, such as increasingly rigorous environmental laws, regulations and enforcement policies thereunder, and claims for damages to property or injuries to persons resulting from the

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operations of the operating subsidiaries could result in substantial costs and liabilities to Buckeye. Please read "—Litigation" and "—Liquidity and Capital Resources—Environmental Matters."

The Oil Pollution Act of 1990 ("OPA") amended certain provisions of the federal Water Pollution Control Act of 1972, commonly referred to as the Clean Water Act ("CWA"), and other statutes as they pertain to the prevention of and response to petroleum product spills into navigable waters. The OPA subjects owners of facilities to strict joint and several liability for all containment and clean-up costs and certain other damages arising from a spill. The CWA provides penalties for any discharges of petroleum products in reportable quantities and imposes substantial liability for the costs of removing a spill. State laws for the control of water pollution also provide varying civil and criminal penalties and liabilities in the case of releases of petroleum or its derivatives into surface waters or into the ground.

Contamination resulting from spills or releases of petroleum products occurs in the petroleum pipeline industry. The operating subsidiaries' pipelines cross numerous navigable rivers and streams. Although we believe that the operating subsidiaries comply in all material respects with the spill prevention, control and countermeasure requirements of federal laws, any spill or other release of petroleum products into navigable waters may result in material costs and liabilities to Buckeye.

The Resource Conservation and Recovery Act ("RCRA"), as amended, establishes a comprehensive program of regulation of "hazardous wastes." Hazardous waste generators, transporters, and owners or operators of treatment, storage and disposal facilities must comply with regulations designed to ensure detailed tracking, handling and monitoring of these wastes. RCRA also regulates the disposal of certain non-hazardous wastes. As a result of these regulations, certain wastes typically generated by pipeline operations are considered "hazardous wastes" which are subject to rigorous disposal requirements.

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), also known as "Superfund," governs the release or threat of release of a "hazardous substance." Releases of a hazardous substance, whether on or off-site, may subject the generator of that substance to liability under CERCLA for the costs of clean-up and other remedial action. Pipeline maintenance and other activities in the ordinary course of business generate "hazardous substances." As a result, to the extent a hazardous substance generated by the operating subsidiaries or their predecessors may have been released or disposed of in the past, the operating subsidiaries may in the future be required to remedy contaminated property. Governmental authorities such as the Environmental Protection Agency, and in some instances third parties, are authorized under CERCLA to seek to recover remediation and other costs from responsible persons, without regard to fault or the legality of the original disposal. In addition to their potential liability as a generator of a "hazardous substance," the property or right-of-way of the operating subsidiaries may be adjacent to or in the immediate vicinity of Superfund and other hazardous waste sites. Accordingly, the operating subsidiaries may be responsible under CERCLA for all or part of the costs required to clean up such sites, which costs could be material.

The Clean Air Act, amended by the Clean Air Act Amendments of 1990 (the "Amendments"), imposes controls on the emission of pollutants into the air. The Amendments required states to develop facility-wide permitting programs over the past several years to comply with new federal programs. Existing operating and air-emission requirements like those currently imposed on the operating subsidiaries are being reviewed by appropriate state agencies in connection with the new facility-wide permitting program. It is possible that new or more stringent controls will be imposed upon the operating subsidiaries through this permit review process.

The operating subsidiaries are also subject to environmental laws and regulations adopted by the various states in which they operate. In certain instances, the regulatory standards adopted by the states are more stringent than applicable federal laws.

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Pipeline and Terminal Maintenance and Safety Regulation

The pipelines operated by the operating subsidiaries are subject to regulation by the United States Department of Transportation ("DOT") under the Hazardous Liquid Pipeline Safety Act of 1979 ("HLPSA"), and its subsequent re-authorizations relating to the design, installation, testing, construction, operation, replacement and management of pipeline facilities. HLPSA covers petroleum and petroleum products and requires any entity that owns or operates pipeline facilities to comply with applicable safety standards, to establish and maintain a plan of inspection and maintenance and to comply with such plans.

The Pipeline Safety Reauthorization Act of 1988 requires coordination of safety regulation between federal and state agencies, testing and certification of pipeline personnel, and authorization of safety-related feasibility studies. Buckeye has a drug and alcohol testing program that complies in all material respects with the regulations promulgated by the Office of Pipeline Safety and DOT.

HLPSA also requires, among other things, that the Secretary of Transportation consider the need for the protection of the environment in issuing federal safety standards for the transportation of hazardous liquids by pipeline. The legislation also requires the Secretary of Transportation to issue regulations concerning, among other things, the identification by pipeline operators of environmentally sensitive areas; the circumstances under which emergency flow restricting devices should be required on pipelines; training and qualification standards for personnel involved in maintenance and operation of pipelines; and the periodic integrity testing of pipelines in unusually sensitive and high-density population areas by internal inspection devices or by hydrostatic testing. Effective in August 1999, the DOT issued its Operator Qualification Rule, which required a written program by April 27, 2001, for ensuring operators are qualified to perform tasks covered by the pipeline safety rules. All persons performing covered tasks were required to be qualified under the program by October 28, 2002. Buckeye filed its written plan and has qualified its employees and contractors as required and requalified the employees under its plan in 2005. On March 31, 2001, DOT's rule for Pipeline Integrity Management in High Consequence Areas (Hazardous Liquid Operators with 500 or more Miles of Pipeline) became effective. This rule sets forth regulations that require pipeline operators to assess, evaluate, repair and validate the integrity of hazardous liquid pipeline segments that, in the event of a leak or failure, could affect populated areas, areas unusually sensitive to environmental damage or commercially navigable waterways. Under the rule, pipeline operators were required to identify line segments which could impact high consequence areas by December 31, 2001. Pipeline operators were required to develop "Baseline Assessment Plans" for evaluating the integrity of each pipeline segment by March 31, 2002 and to complete an assessment of the highest risk 50% of line segments by September 30, 2004, with full assessment of the remaining 50% by March 31, 2008. Pipeline operators will thereafter be required to re-assess each affected segment in intervals not to exceed five years. Buckeye has implemented an Integrity Management Program in compliance with the requirements of this rule.

In December 2002, the Pipeline Safety Improvement Act of 2002 ("PSIA") became effective. The PSIA imposes additional obligations on pipeline operators, increases penalties for statutory and regulatory violations, and includes provisions prohibiting employers from taking adverse employment action against pipeline employees and contractors who raise concerns about pipeline safety within the company or with government agencies or the press. Many of the provisions of the PSIA are subject to regulations to be issued by the Department of Transportation. The PSIA also requires public education programs for residents, public officials and emergency responders and a measurement system to ensure the effectiveness of the public education program. Buckeye has commenced implementation of a public education program that complies with these requirements and the requirements of the American Petroleum Institute Recommended Practice 1162. While the

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PSIA imposes additional operating requirements on pipeline operators, Buckeye does not believe that cost of compliance with the PSIA is likely to be material.

Buckeye also has certain contractual obligations to Shell for testing and maintenance of pipelines. In 2003, Shell entered into a consent decree with the United States Environmental Protection Agency arising out of a June 1999 incident unrelated to the assets acquired. The consent decree included requirements for testing and maintenance of two of the pipelines (the "North Line" and the "East Line") acquired from Shell in 2004, the creation of a damage prevention program, submission to independent monitoring and various reporting requirements. In the purchase agreement with Shell, Buckeye agreed to perform, at its own expense, the work required of Shell on North Line and East Line under the consent decree. Buckeye's obligations to Shell with respect to the consent decree extend to approximately 2008, a date five years from the date of the consent decree.

We believe that the operating subsidiaries currently comply in all material respects with HLPSA and other pipeline safety laws and regulations. However, the industry, including Buckeye, will incur additional pipeline and tank integrity expenditures in the future and Buckeye is likely to incur increased operating costs based on these and other government regulations. During 2005, Buckeye's integrity expenditures for these programs were approximately $13.5 million (of which $10.5 million was capital and $3.0 million was expense). We expect 2006 integrity expenditures for these programs to be approximately $26.0 million of which approximately $16.0 million will be capital and $10.0 million will be expense.

The operating subsidiaries are also subject to the requirements of the Federal Occupational Safety and Health Act ("OSHA") and comparable state statutes. We believe that the operating subsidiaries' operations comply in all material respects with OSHA requirements, including general industry standards, record-keeping, hazard communication requirements, training and monitoring of occupational exposure to benzene, asbestos and other regulated substances.

Buckeye cannot predict whether or in what form any new legislation or regulatory requirements might be enacted or adopted or the costs of compliance. In general, any such new regulations could increase operating costs and impose additional capital expenditure requirements, but we do not presently expect that such costs or capital expenditure requirements would have a material adverse effect on Buckeye's results of operations or financial condition.

Title to Properties

As of March 31, 2006, Buckeye's principal facilities included approximately 5,350 miles of 6-inch to 24-inch diameter pipeline, approximately 100 delivery points and 45 active bulk storage and terminal facilities with aggregate capacity of approximately 17.6 million barrels. Buckeye's pipelines are used by its Pipeline Operations segment and its terminals and storage facilities are used in its Terminalling and Storage segment. Properties used in Buckeye's Other Operations segment include the Sabina Pipeline, a 23-mile pipeline located in Texas that is leased to a third-party chemical company and a 29-mile ammonia pipeline located in Texas. The operating subsidiaries own substantially all of these facilities.

In general, Buckeye's pipelines are located on land owned by others pursuant to rights granted under easements, leases, licenses and permits from railroads, utilities, governmental entities and private parties. Like other pipelines, certain of the operating subsidiaries' rights are revocable at the election of the grantor or are subject to renewal at various intervals, and some require periodic payments. The operating subsidiaries have not experienced any revocations or lapses of such rights that were material to their business or operations, and we have no reason to expect any such revocation or lapse in the foreseeable future. Most delivery points, pumping stations and terminal facilities are located on land owned by the operating subsidiaries.

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We believe that the operating subsidiaries have sufficient title to their material assets and properties, possess all material authorizations and revocable consents from state and local governmental and regulatory authorities and have all other material rights necessary to conduct their business substantially in accordance with past practice. Although in certain cases the operating subsidiaries' title to assets and properties or their other rights, including their rights to occupy the land of others under easements, leases, licenses and permits, may be subject to encumbrances, restrictions and other imperfections, none of such imperfections are expected to interfere materially with the conduct of the operating subsidiaries' businesses.

Litigation

Buckeye GP Holdings L.P.

We are not a party to any litigation.

Buckeye Partners, L.P.

Buckeye, in the ordinary course of business, is involved in various claims and legal proceedings, some of which are covered in whole or in part by insurance. We are unable to predict the timing or outcome of these claims and proceedings.

With respect to environmental litigation, certain operating subsidiaries (or their predecessors) have been named in the past as defendants in lawsuits, or have been notified by federal or state authorities that they are potentially responsible parties ("PRPs") under federal laws or a respondent under state laws relating to the generation, disposal or release of hazardous substances into the environment. In connection with actions brought under CERCLA and similar state statutes, an operating subsidiary is usually one of many PRPs for a particular site and its contribution of total waste at the site is usually de minimis.

Although there is no material environmental litigation pending against Buckeye or the operating subsidiaries at this time, claims may be asserted in the future under various federal and state laws, and the amount of any potential liability associated with such claims cannot be estimated. Please read "Business—Environmental Matters."

In late October 2005, Buckeye experienced a release of approximately 43,000 gallons of unleaded gasoline at its Macungie, Pennsylvania station and tank farm complex. Buckeye estimates that it has recovered approximately 60 percent of the released gasoline. Buckeye is actively engaged in delineation of impacted soils and groundwater and has instituted product recovery through remediation systems. At December 31, 2005, Buckeye had expended approximately $1.2 million on emergency response and environmental remediation efforts. In addition, Buckeye accrued an additional $1.3 million of expense as of the end of 2005 in connection with additional costs anticipated to be incurred in 2006. Buckeye expects that insurance reimbursements will cover expenses in connection with environmental remediation costs in excess of $2.5 million.

Buckeye is working with the United States Environmental Protection Agency ("EPA"), and the Pennsylvania Department of Environmental Protection ("PA DEP"), in connection with the delineation of the contamination and the development of a long-term remediation plan for the site. In the first quarter of 2006, Buckeye entered into administrative consent orders with the EPA and the PA DEP. In addition, in connection with the administrative consent order entered into with the PA DEP, Buckeye agreed (without admitting to any violations of law) to pay a civil penalty in connection with the release in the amount of $150,000. Buckeye is unable to estimate whether any additional penalties may be assessed by regulatory agencies in connection with the release.

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MANAGEMENT

The following table sets forth certain information with respect to the executive officers and members of the board of directors of our general partner, MainLine Management LLC, and the executive officers and members of the board of directors of Buckeye's general partner, Buckeye GP LLC. Executive officers and directors of our general partner will serve until their successors are duly appointed or elected.

Name	Age	Position with Our General Partner	Position with Buckeye's General Partner
William H. Shea, Jr.	51	Chairman of the Board, President and Chief Executive Officer and Director	Chairman of the Board, President and Chief Executive Officer and Director
Michael B. Hoffman	55	Director	Director
David M. Leuschen	55	Director	Director
Frank S. Sowinski	50	Director	—
Andrew W. Ward	39	Director	Director
Stephen C. Muther	56	Senior Vice President — Administration, General Counsel and Secretary	Senior Vice President — Administration, General Counsel and Secretary
Robert B. Wallace	45	Senior Vice President — Finance and Chief Financial Officer	Senior Vice President — Finance and Chief Financial Officer
Brian F. Billings	67	—	Director
Edward F. Kosnik	61	—	Director
Joseph A. LaSala	51	—	Director
Jonathan O'Herron	76	—	Director
Eric Gustafson	57	—	Senior Vice President — Transportation and Technology

William H. Shea, Jr. is a member of the MainLine Management LLC board of managers and has been President and Chief Executive Officer since May 4, 2004. Upon closing of the offering he will be appointed Chairman of the Board of Directors of MainLine Management LLC. He was named Chairman of the Board of the predecessor of Buckeye GP LLC, or the Prior General Partner, on May 12, 2004 and President and Chief Executive Officer and a director of the Prior General Partner on September 27, 2000, and serves Buckeye GP LLC in the same capacity. He served as President and Chief Operating Officer of the Prior General Partner from July 1998 to September 2000. Mr. Shea serves on the Board of Trustees of The Franklin Institute.

Michael B. Hoffman is a member of the MainLine Management LLC board of managers and will be appointed a member of the Board of Directors. He served as a Vice President of MainLine Management LLC from May 4, 2004 to June 14, 2006. He became a director of the Prior General Partner on May 4, 2004, and serves Buckeye GP LLC in the same capacity. He has served as a Managing Director at Riverstone Holdings, LLC since January 2003. He currently serves as a member of the board of directors of Kramer Junction, Topaz Power Group, LLC, Microban International, and Onconova Therapeutics, and he serves on the Board of Trustees of Lenox Hill Hospital and Manhattan Eye, Ear and Throat Hospital. Prior to joining Riverstone Holdings, LLC,

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Mr. Hoffman was a Senior Managing Director and Co-Head of M&A Advisory at The Blackstone Group, where he was also a member of Blackstone's Principal Group Investment Committee.

David M. Leuschen is a member of the MainLine Management LLC board of managers and will be appointed a member of the Board of Directors. He has served as a Vice President of MainLine Management LLC since May 4, 2004, but will resign from such position at or prior to the closing of this offering. He became a director of the Prior General Partner on May 4, 2004, and serves Buckeye GP LLC in the same capacity. He is a founder of Riverstone Holdings, LLC where he has served as a Managing Director since May 2000. He currently serves as a member of the board of directors of Petroplus International, N.V., Cobalt International Exploration, Frontier Drilling ASA, Legend Natural Gas, L.P. and Mega Energy LLC. Previously, he served as a director of Seabulk International Inc., Belden & Blake Corporation, Cambridge Energy Research Associates, Cross Timbers Oil Company and Magellan GP LLC. He is also the owner and President of Switchback Ranch LLC, an integrated cattle ranching operation in the western United States. Prior to joining Riverstone Holdings, LLC, Mr. Leuschen spent 22 years with Goldman, Sachs & Co., where he founded the firm's Global Energy and Power Group in 1982.

Frank S. Sowinski will be appointed as a member of the Board of Directors of MainLine Management LLC upon the closing of this offering. He became a director of the Prior General Partner on February 22, 2001, and serves Buckeye GP LLC in the same capacity. Mr. Sowinski will resign from the board of directors of Buckeye GP LLC prior to his appointment to the Board of Directors of MainLine Management LLC. He served as Executive Vice President of Liz Claiborne, Inc. from January 2004 until October 2004. Mr. Sowinski served as Executive Vice President and Chief Financial Officer of PWC Consulting, a systems integrator company, from May 2002 to October 2002. He was a Senior Vice President of the Dun & Bradstreet Corporation from October 2000 to April 2001. Mr. Sowinski served as President of the Dun & Bradstreet operating company from September 1999 to October 2000. He had been Senior Vice President and Chief Financial Officer of the Dun & Bradstreet Corporation from November 1996 to September 1999.

Andrew W. Ward is a member of the MainLine Management LLC board of managers and will be appointed a member of the Board of Directors. He served as Vice President and Chief Financial Officer of MainLine Management LLC from May 4, 2004 to June 14, 2006. He is currently a Managing Director of Riverstone Holdings, LLC where he served as a Principal from March 2002 to December 2004. He has served as Vice President and Chief Financial Officer of the general partner of MainLine since May 4, 2004. Prior to joining Riverstone Holdings, LLC, Mr. Ward was a Limited Partner and Managing Director with Hyperion Partners/Ranieri & Co., a private equity fund that specialized in investments in the financial services and real estate sectors.

Stephen C. Muther is the Senior Vice President — Administration, General Counsel and Secretary of MainLine Management LLC. He was the Senior Vice President — Administration, General Counsel and Secretary of the Prior General Partner for more than five years and serves Buckeye GP LLC in the same capacity.

Robert B. Wallace is the Senior Vice President — Finance and Chief Financial Officer of MainLine Management LLC. He became the Senior Vice President — Finance and Chief Financial Officer of the Prior General Partner on September 1, 2004, and serves Buckeye GP LLC in the same capacity. He was an executive director in the UBS Energy Group from September 1997 to February 2004 and a private investor and consultant to Buckeye GP LLC from February 2004 until September 2004.

Brian F. Billings became a director of the Prior General Partner on December 31, 1998, and serves Buckeye GP LLC in the same capacity. Mr. Billings was a director of Buckeye Management

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Company, or, BMC (the predecessor of the Prior General Partner) from October 1986 to December 1998. Mr. Billings has been a private investor for the past five years.

Edward F. Kosnik became a director of the Prior General Partner on December 31, 1998, and serves Buckeye GP LLC in the same capacity. He was a director of BMC from October 1986 to December 1998. Mr. Kosnik was President and Chief Executive Officer of Berwind Corporation, a diversified industrial real estate and financial services company, from December 1999 until February 2001 and was President and Chief Operating Officer of Berwind Corporation from June 1997 to December 1999. Since November 2004, he has served on the Board of Directors of Premcor, Inc. and is a member of Premcor, Inc.'s audit committee.

Joseph A. LaSala, Jr. became a director of the Prior General Partner on April 23, 2001, and serves Buckeye GP LLC in the same capacity. He has served as Vice President, General Counsel and Secretary of Novell, Inc. since July 11, 2001. Mr. LaSala served as Vice President, General Counsel and Secretary of Cambridge Technology Partners from March 2000 to July 2001. He had been Vice President, General Counsel and Secretary of Union Pacific Resources, Inc. from January 1997 to February 2000.

Jonathan O'Herron became a director of the Prior General Partner on December 31, 1998, and serves Buckeye GP LLC in the same capacity. He was a director of BMC from September 1997 to December 1998. He has been Managing Director of Lazard Freres & Company, LLC for more than five years.

Eric Gustafson became the Senior Vice President — Operations and Technology of Buckeye GP LLC on January 1, 2005. He had served as Vice President — Transportation and Technology of Buckeye Pipeline Services Company since May 1998.

Board Committees

Audit Committee

Our general partner's board of directors has established an audit committee to be effective upon the closing of this offering. Ultimately, three independent members of our general partner's board of directors will serve on the audit committee which reviews our external financial reporting, is responsible for engaging our independent auditors and reviews procedures for internal auditing and the adequacy of our internal accounting controls. The members of the audit committee must meet the independence standards established by the NYSE. Upon the completion of this offering, Mr. Sowinski will be the sole initial member of the audit committee.

Conflicts Committee

Our general partner's board of directors has the ability to establish a conflicts committee under our partnership agreement. The conflicts committee, if formed, will consist of one or more members and will be charged with reviewing specific matters that our general partner's board of directors believes may involve conflicts of interest. A conflicts committee may determine if the resolution of any conflict of interest submitted to it is fair and reasonable to us. In addition to satisfying certain other requirements, the members of the conflicts committee must meet the independence standards for service on an audit committee of a board of directors, which standards are established by the NYSE. Any matters approved by the conflicts committee will be conclusively deemed to be fair and reasonable to us, approved by all of our unitholders, and not a breach by us of any duties we may owe to our unitholders.

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Compensation Committee

Our general partner's board of directors performs the functions of a compensation committee. Its responsibilities will include making compensation decisions for the officers and independent directors of our general partner.

Other Committees

Our general partner's board of directors may establish other committees from time to time to facilitate our management.

Election of our Directors

Our general partner's limited liability company agreement establishes a board of directors that will be responsible for the oversight of our business and operations. Our general partner's board of directors will be elected by the sole member of our general partner.

Compensation of Directors

No additional remuneration will be paid to officers or employees of our general partner who also serve as directors. We anticipate that each independent director will receive a combination of cash and common unit options and restricted common unit grants as compensation for services rendered, including attending meetings of the board of directors and committee meetings. In addition, each independent director will be reimbursed for his out-of-pocket expenses in connection with attending meetings of the board of directors or committees. Each director will be indemnified for his actions associated with being a director to the fullest extent permitted under Delaware law.

Compensation Committee Interlocks and Insider Participation

While our executive officers and certain of our directors serve in similar roles with the general partner of Buckeye, none of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of the board of directors or compensation committee of our general partner, except for William H. Shea, Jr.

Executive Officer Compensation

MainLine Sub LLC and Mr. Shea are parties to an Employment Agreement (the "Shea Employment Agreement"), dated as of May 4, 2004, and a Benefits Continuation Agreement (the "Benefits Continuation Agreement") dated as of January 1, 2004. Mr. Shea's base salary under the Shea Employment Agreement is not less than $400,000 per year (less applicable taxes and withholdings). The Shea Employment Agreement is terminable at any time for any reason by MainLine Sub or Mr. Shea. Pursuant to the Benefits Continuation Agreement, upon the termination of Mr. Shea's employment for any reason within two years following a change in control of Buckeye Partners, L.P., Mr. Shea will be entitled to continued coverage by MainLine Sub for 36 months after the effective date of such termination under the medical and dental benefits and disability insurance plans and policies at the same level of coverage that Mr. Shea enjoyed prior to such termination, subject to certain limitations. For purposes of the Benefits Continuation Agreement, a "change of control" is defined as the acquisition (other than by Buckeye GP and its affiliates) of 80 percent or more of the LP units of Buckeye Partners, L.P., 51 percent or more of the general partner interests owned by Buckeye GP LLC or 50 percent or more of the voting equity interest of Buckeye Partners, L.P. and Buckeye GP LLC on a combined basis. Mr. Shea has waived any change of control related to this offering.

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Mr. Muther and MainLine Sub are parties to an Amended and Restated Employment and Severance Agreement, dated as of May 4, 2004 (the "Muther Employment Agreement"), which provides for, among other things, the payment of severance and the continuation of certain benefits following a termination of Mr. Muther's employment by MainLine Sub (and its affiliates). Mr. Muther's base salary under the Muther Employment Agreement is not less than $300,000 per year (less applicable taxes and withholdings). The Muther Employment Agreement also provides for, among other things, the payment of severance and the continuation of certain benefits following (a) an involuntary termination of Mr. Muther's employment for any reason other than for "cause" or (b) a voluntary termination of employment by Mr. Muther for "good reason," which includes, in certain circumstances, a termination in connection with a "change of control" of the Partnership. The Muther Employment Agreement provides for a severance payment of 3.0 times Mr. Muther's annualized base salary at the time of termination in the circumstances described in clauses (a) and (b) above. In addition, the Partnership will provide certain benefits to Mr. Muther for a period of 18 months (36 months if the triggering event is a "change of control") following his termination. For purposes of the Muther Employment Agreement, "change of control" is defined similarly to such term in the Benefits Continuation Agreement discussed above. Mr. Muther has waived any change of control related to this offering.

Mr. Wallace's base salary is $300,000 per year. MainLine Sub and Mr. Wallace are parties to a Severance Agreement, dated as of September 1, 2004 (the "Wallace Severance Agreement"). The Wallace Severance Agreement generally provides for, among other things, the payment of severance and the continuation of certain benefits following a voluntary termination of employment by Mr. Wallace after a "change of control" has occurred and upon the occurrence of certain specified adverse changes in Mr. Wallace's employment conditions. The Wallace Severance Agreement provides for a severance payment of 2.0 times Mr. Wallace's annualized base salary at the time of termination. In addition, MainLine Sub will provide certain continued benefits to Mr. Wallace for a period of 12 months following his termination, subject to certain limitations. For purposes of the Wallace Severance Agreement, "change of control" is defined similarly to such term in the Benefits Continuation Agreements discussed above. Mr. Wallace has waived any change of control related to this offering.

In connection with the successful closing of this offering, we will pay one-time cash bonuses to officers of our general partner and to certain employees of Services Company. These bonuses will be an aggregate amount of $2.0 million and will be paid either from cash on hand immediately prior to the closing of the offering or from our current equity owners' portion of Buckeye's distribution to us in respect of the second quarter of 2006. Included in these bonuses will be a one-time cash bonus of up to $700,000 payable to Mr. Shea, a one-time cash bonus of up to $650,000 payable to Mr. Muther and a one-time cash bonus of up to $650,000 payable to Mr. Wallace.

Buckeye GP LLC has released Buckeye from its obligations to reimburse Buckeye GP LLC for total compensation, including all benefits, paid for the four highest salaried officers performing duties for Buckeye GP LLC with respect to the functions of operations, finance, legal, marketing and business development, treasury, or performing the function of president of Buckeye GP LLC. The four highest salaried officers are Mr. Shea, Mr. Muther, Mr. Wallace, and Eric A Gustafson. Mr. Gustafson is the Senior Vice President—Operations and Technology of Buckeye GP LLC.

Long-Term Incentive Plan

Buckeye GP Holdings Long-Term Incentive Plan

Our general partner intends to adopt a long-term incentive plan for its officers and directors and for certain key employees of our subsidiaries. Our general partner has made no decision with

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respect to grants under the long-term incentive plan except with respect to the grant of common units to the directors of our general partners as described above. The long-term incentive plan will consist of some combination of the following five common unit components: units, restricted units, phantom units, unit options and unit appreciation rights. The long-term incentive plan will limit the number of common units that may be issued thereunder to 1,415,000 common units. The board of directors of our general partner, or a committee thereof, will administer the plan and in its discretion may terminate, suspend or discontinue the long-term incentive plan at any time with respect to any award that has not yet been granted. The plan administrator also will have the right to alter or amend the long-term incentive plan or any part of the plan from time to time, including increasing the number of units that may be granted subject to unitholder approval as required by the exchange upon which the common units are listed at that time. However, no change in any outstanding grant will be made that would materially impair the rights of a participant without the consent of the participant.

Buckeye Unit Option and Distribution Equivalent Plan

Buckeye has a Unit Option and Distribution Equivalent Plan (the "Option Plan"), which was approved by the Board of Directors of Buckeye GP on April 25, 1991 and by holders of Buckeye's LP units on October 22, 1991. The Option Plan was amended and restated on July 14, 1998. On April 24, 2002, the Buckeye GP Board approved an Amended and Restated Unit Option and Distribution Equivalent Plan to extend the term thereof for an additional ten years and to make certain administrative changes in the Plan, the Unit Option Loan Program of Buckeye GP and related documents. On April 1, 2005, Buckeye's general partner, after receiving approval under a solicitation of consents from LP unitholders, amended and restated the Option Plan to increase the granting of options (the "Options") to acquire LP units to an amount not to exceed 1,400,000 LP units in the aggregate. The options are granted to selected key employees (the "Optionees"). The price at which each LP unit may be purchased pursuant to the Options granted under the Option Plan is generally equal to the market value on the date of the grant. There are no options outstanding that were granted prior to 1998. Options granted after 1997 contain a "Distribution Equivalent" feature. Distribution Equivalents are an amount equal to (i) Buckeye's per LP unit regular quarterly distribution, multiplied by (ii) the number of LP units subject to such Options that have not vested. The Distribution Equivalents are paid as independent cash bonuses on the date the Options vest and are dependent upon the percentage attainment of 3-year targets related to cash distributions paid to Buckeye's limited partners.

Generally, the Options vest three years after the date of grant and are exercisable for up to 7 years following the date on which they vest.

Employee Stock Ownership Plan

Services Company provides an employee stock ownership plan (the "ESOP") to the majority of its regular full-time employees hired before September 16, 2004. Effective September 16, 2004, new employees, including employees hired by Services Company from BGC, Buckeye Terminals and Norco on December 26, 2004, do not participate in the ESOP. The ESOP owns all of the outstanding common stock of Services Company. Services Company owns, as of March 31, 2006, 2,359,045 LP units of Buckeye. At December 31, 2005, the ESOP was directly obligated to a third-party lender for $33.6 million of 3.60% Notes due 2011 (the "ESOP Notes"). The ESOP Notes were issued on May 4, 2004 to refinance Services Company's 7.24% Notes which were originally issued to purchase Services Company common stock. The ESOP Notes are secured, as of March 31, 2006, by 2,359,045 shares of Services Company's common stock. Buckeye has committed that, in the event that the value of the LP units owned by Services Company falls to less than 125% of the balance payable under the ESOP Notes, Buckeye will fund an escrow account with sufficient assets

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to bring the value of the total collateral (the value of the Services Company LP units and the escrow account) up to the 125% minimum. Amounts deposited in the escrow account are returned to Buckeye when the value of the Services Company LP units returns to an amount which exceeds the 125% minimum. At March 31, 2006, the value of the LP units exceeded the 125% minimum requirement.

Buckeye issued 2,573,146 LP units to Services Company in August 1997 in exchange for the elimination of Buckeye's obligation to reimburse the predecessor of Buckeye GP LLC and the parent of its general partner for certain executive compensation costs, a reduction of the incentive payments paid by Buckeye to the predecessor of Buckeye GP LLC, and other changes that made the ESOP a less expensive fringe benefit for Buckeye. Funding for the ESOP Notes is provided by distributions that Services Company receives on the LP units that it owns and from cash payments from Buckeye, which are required to cover any shortfall between the distributions that Services Company receives on the LP units that it owns and amounts currently due under the ESOP Notes (the "top-up reserve"), except that Buckeye has no obligation to fund the accelerated portion of the ESOP Notes upon a default. Buckeye will also incur ESOP-related costs for routine administrative costs and taxes associated with annual taxable income or the sale of LP units, if any. Total ESOP-related costs charged to earnings were $10.0 million for the year ended December 31, 2003, $3.4 million for the period January 1 to May 4, 2004, $6.6 million for the period May 4 to December 31, 2004 and $6.9 million for the year ended December 31, 2005.

Management Units

In 2004 MainLine issued 16,216,668 Class B units to executive officers of Buckeye GP LLC pursuant to the terms of MainLine's partnership agreement. Prior to closing, the executive officers will contribute their Class B units in MainLine to us in exchange for 1,362,000 management units, or approximately 7% of the total number of units owned by our current equity owners following this offering. Each management unit will represent a limited partner interest in us and will be entitled to receive quarterly cash distributions in the same amount as the quarterly cash distributions we make on each common unit. Each management unit will be allocated a portion of our income, gain, loss, deduction and credit in a pro rata basis with each common unit, and each management unit will be entitled to receive distributions upon liquidation in the same manner as each common unit. Each management unit will also have the same voting rights as a common unit. Each management unit will be convertible into one common unit at the election of the holder of the management unit. 30% of the management units are subject to vesting, with 10% vesting on May 4, 2007, 2008 and 2009. The management units, unlike the common units, will have a zero initial capital account balance.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Buckeye GP Holdings L.P.

The following table sets forth certain information regarding the beneficial ownership of our units following the consummation of this offering and the related transactions by:

•: each person who is known to us to beneficially own more than 5% of such units to be outstanding;
•: our general partner;
•: each of the named executive officers of our general partner;
•: each of the directors of our general partner; and
•: all of the directors and named executive officers of our general partner as a group.

All information with respect to beneficial ownership has been furnished by the respective directors, officers or 5% or more unitholders, as the case may be.

	Beneficially Owned After Offering
Name of Beneficial:	Common Units		Percent
Carlyle/Riverstone BPL Holdings II, L.P.(a)	15,204,728		53.7	%
MainLine Management LLC	2,830		*
William H. Shea, Jr.	1,281,464	(b)(c)	4.5	%
Michael B. Hoffman	—		—
David M. Leuschen	—		—
Frank S. Sowinski	—		—
Andrew W. Ward	—		—
Stephen C. Muther	430,079	(c)	1.5	%
Robert B. Wallace	147,463	(c)	*
All directors and named executive officers as a group (consisting of 7 persons)	1,859,005	(b)(c)	6.6	%

(*): Less than one percent (1%).
(a): Includes common units owned by MainLine Management LLC. Carlyle/Riverstone BPL Holdings II, L.P. is ultimately governed by a management committee which includes Messrs. Leuschen, Hoffman and Ward, all of whom are directors of our general partner. Entities owning the equity interests of Carlyle/Riverstone BPL Holdings II, L.P. include investment partnerships affiliated with Carlyle/Riverstone Global Energy and Power Fund II, L.P. ("Carlyle/Riverstone"). The Carlyle/Riverstone partnerships are associated with Riverstone Holdings, LLC ("Riverstone") and The Carlyle Group ("Carlyle"). Riverstone is based in New York, New York and was organized in May 2000 specifically for the purpose of originating private equity investments in the energy and power industry. Carlyle is a global private equity firm, based in Washington, D.C., that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and build-ups, and growth capital financings. The address of Carlyle/Riverstone BPL Holdings II, L.P. is 712 Fifth Avenue, 51st Floor, New York, NY 10019.
(b): Includes units beneficially owned by Trust Under Agreement of Alfred W. Martinelli dated December 29, 1992, Susan Martinelli Shea and William H. Shea, Jr., Trustees F/B/O Susan Martinelli Shea. Because Mr. Shea is a trustee and the trust is for the benefit of a member of

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Mr. Shea's family, Mr. Shea may be deemed to have beneficial ownership of the common units owned by the trust. Mr. Shea disclaims beneficial ownership of all such common units.

(c): Includes management units, which are convertible into common units, at the election of the holder, on a one-for-one basis.

Buckeye Partners, L.P.

The following table sets forth certain information as of December 31, 2005 regarding the beneficial ownership of LP units by:

•: MainLine Sub LLC;
•: Buckeye GP LLC;
•: each of the named executive officers of Buckeye GP LLC;
•: each of the directors of Buckeye GP LLC and MainLine Management LLC; and
•: all of the directors and executive officers of Buckeye GP LLC as a group.

All information with respect to beneficial ownership has been furnished by the respective directors, officers or greater than 5% unitholders, as the case may be.

Name of Beneficial Owner	LP units Beneficially Owned(a)		Percentage of LP units Beneficially Owned
MainLine Sub LLC	80,000		*
Buckeye GP LLC	—		—
Brian F. Billings	17,500		*
Eric A. Gustafson	11,200		*
Michael B. Hoffman	91,100	(b)	*
Edward F. Kosnik	14,000		*
Joseph A. LaSala, Jr.	—		—
David M. Leuschen	80,000	(b)	*
Stephen C. Muther	23,100		*
Jonathan O'Herron	26,800		*
William H. Shea, Jr.	100,200	(b)(d)	*
Frank S. Sowinski	5,500		*
Robert B. Wallace	1,000		*
Andrew W. Ward	80,000	(b)	*
All directors and executive officers as a group (consisting of 12 persons)	210,400	(c)	*

(*): Less than one percent (1%).
(a): Unless otherwise indicated, the persons named above have sole voting and investment power over the LP units reported.
(b): Includes the 80,000 LP units owned by MainLine Sub, over which the indicated persons share voting and investment power by virtue of their membership on the Board of Managers of MainLine Management LLC, which is our general partner, and by virture of our being the sole member of MainLine Sub. Such individuals expressly disclaim beneficial ownership of such LP units.
(c): The 80,000 LP units owned by MainLine Sub are included in the total only once.
(d): Includes 18,800 LP units for which Mr. Shea shares voting and investment power with his spouse.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our Relationship with Buckeye and its General Partner, Buckeye GP LLC

General

Our cash flows consist of distributions from Buckeye on the partnership interest we own, which consists of the following:

•

243,914 GP units in Buckeye;

•

the incentive distribution rights; and

•

approximately a 1% general partner interest through MainLine in each of the following Buckeye subsidiaries:

•: Buckeye Pipe Line
•: Laurel
•: Everglades
•: BPH.

We also own 80,000 Buckeye LP units, representing a de minimis limited partner interest in Buckeye.

Our Relationship with Buckeye's General Partner

Buckeye GP LLC, Buckeye's general partner, manages the operations and activities of Buckeye. Buckeye GP LLC owns MainLine, which is the general partner of, and manages the operations and activities of, Buckeye Pipe Line, Laurel, Everglades and BPH. MainLine is controlled by MainLine GP, Inc., which is wholly owned by MainLine.

Cash distributions from Buckeye are generally made approximately 99.4% to LP unitholders, including affiliates of its general partner as holders of LP units, and approximately 0.6% to Buckeye GP LLC, as holder of Buckeye GP units. In addition, if distributions exceed the target levels in excess of the minimum quarterly distribution, Buckeye GP LLC is entitled to receive incentive distributions equal to an increasing percentage of such cash distributions.

MainLine Sub is entitled to receive an annual management fee for certain management functions it provides to Buckeye GP LLC pursuant to the Management Agreement. In connection with completion of this offering, MainLine Sub will assign its rights under such Management Agreement to our general partner and Buckeye will assume the direct obligation to pay such fee, rather than the obligation to reimburse Buckeye GP LLC upon its payment. The management fee includes an annual Senior Administrative Charge of not less than $975,000 and reimbursement for certain costs and expenses. The disinterested directors of Buckeye GP LLC approve the amount of the management fee on an annual basis. Amounts paid to MainLine Sub in 2005 amounted to $1,900,000 for the Senior Administrative Charge. There were no reimbursed expenses in 2005.

In recognition of increased services from MainLine Sub in the form of assistance with business development opportunities, financing strategies, insurance, investment banking and corporate development advice, the disinterested directors of Buckeye's general partner approved a Senior Administrative Charge for 2006 of $1.9 million. MainLine Sub agreed not to request an additional increase in the Senior Administrative Charge in 2006 (other than adjustments for inflation capped at the Consumer Price Index) unless there is a material change in the nature of the services rendered to Buckeye GP LLC by MainLine Sub.

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If Buckeye's general partner withdraws or is removed, and a successor general partner is elected by Buckeye's limited partners, the successor general partner is required to buy the GP units for a cash price equal to the fair market value. The fair market value of the GP units includes the value of all the rights associated with being Buckeye's general partner, including, without limitation, the general partner's pro rata interest in Buckeye and the right to receive incentive distributions.

Upon Buckeye's liquidation, the partners, including Buckeye's general partner, will be entitled to receive liquidating distributions according to their particular capital account balances.

Pre-Closing General Partner Interest Restructuring

Currently, the approximate 1% general partner interest in Buckeye Pipe Line, Laurel, Everglades, and BPH are owned by Buckeye GP LLC, rather than MainLine, and the incentive distribution rights are owned by MainLine Sub LLC, rather than Buckeye GP LLC. Moreover, distributions under the incentive distribution rights are currently characterized as contractual rights to payment, rather than distributions in respect of a partnership interest in Buckeye. Prior to the closing of this offering, the approximate 1% general partner interest in such entities will be transferred to MainLine, and MainLine will be conveyed to Buckeye GP. Additionally, the incentive distribution agreement will be assigned to Buckeye GP LLC and the agreement, together with the partnership agreement of Buckeye, will be amended and restated to clarify that the incentive distribution rights are a general partner interest in Buckeye and that the distributions thereunder are distributions in respect of such partnership interest.

Indemnification of Directors and Officers

Under our partnership agreement and subject to specified limitations, we will indemnify to the fullest extent permitted by Delaware law, from and against all losses, claims, damages or similar events any director or officer, or while serving as a director of officer, any person who is or was serving as a tax matters partner or as a director, officer, tax matters member, employee, partner, manager, fiduciary or trustee of our partnership or any of our affiliates. Additionally, we will indemnify to the fullest extent permitted by law, from and against all losses, claims, damages or similar events any person who is or was our employee (other than an officer) or agent.

Any indemnification under our partnership agreement will only be out of our assets. 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.

Related Party Transactions Involving Buckeye

Under a services agreement, Services Company is entitled to reimbursement of substantially all direct and indirect costs related to the business activities of Buckeye except for certain executive compensation and related benefits costs paid by us.

Costs reimbursed to Services Company totaled $92.9 million, $70.3 million and $65.4 million in 2005, 2004 and 2003, respectively. The reimbursable costs include insurance, general and administrative costs, compensation and benefits payable to employees of Services Company, tax information and reporting costs, legal and audit fees and an allocable portion of overhead expenses.

Services Company, which is owned by the ESOP, owned 2,359,996 LP units (approximately 6% of the LP units outstanding) as of December 31, 2005. Distributions received by Services Company on the LP units it owns are used to fund obligations of the ESOP. Distributions paid to Services Company totaled $6,708,000, $6,365,000 and $6,226,000 in 2005, 2004 and 2003,

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respectively. In addition, Buckeye recorded ESOP-related costs of $228,000, $643,000 and $1,100,000 in 2005, 2004 and 2003, respectively.

Related Party Transaction Involving Carlyle/Riverstone

In connection with the acquisition of Glenmoor in 2004, Mainline entered into an agreement with Carlyle/Riverstone Energy Partners II, L.P. pursuant to which MainLine is obligated to pay Carlyle/Riverstone Energy Partners II, L.P. an annual fee of $300,000, plus the reimbursement of certain costs and expenses. In connection with the closing of this offering, the agreement will be terminated.

Cash Bonuses Payable in Connection With Successful Closing of this Offering

In connection with the successful closing of this offering, we will pay one-time cash bonuses to officers of our general partner and to certain employees of Services Company. These bonuses will be an aggregate amount of $2.0 million and will be paid either from cash on hand immediately prior to the closing of the offering or from our current equity owners' portion of Buckeye's distribution to us in respect of the second quarter of 2006. Included in these one-time bonuses will be a one-time cash bonus of up to $700,000 payable to Mr. Shea, a one-time cash bonus of up to $650,000 payable to Mr. Muther and a one-time cash bonus of up to $650,000 payable to Mr. Wallace.

Material Provisions of Our General Partner's Limited Liability Company Agreement

Our general partner's management and operations are governed by its limited liability company agreement, which is filed as an exhibit to the registration statement of which this prospectus is a part. The limited liability company agreement establishes a board of directors that will be responsible for the oversight of our business and operations. Our general partner's board of directors is elected by Carlyle/Riverstone BPL Holdings II, L.P., as sole member.

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CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITIES

Conflicts of Interest

Conflicts of interest exist and may arise in the future as a result of the relationships between our general partner and its affiliates (including its owner) on the one hand, and us and our limited partners, on the other hand. The directors and officers of our general partner have fiduciary duties to manage our general partner in a manner beneficial to its owner. At the same time, our general partner has a fiduciary duty to manage us in a manner beneficial to us and our unitholders.

Whenever a conflict of interest arises between our general partner or its affiliates, on the one hand, and us or any other partner, on the other hand, our general partner will resolve that conflict. Our partnership agreement contains provisions that modify and limit our general partner's fiduciary duties to our unitholders. Our partnership agreement also restricts the remedies available to unitholders for actions taken that, without those limitations, might constitute breaches of fiduciary duty.

Our general partner will not be in breach of its obligations under our partnership agreement or its duties to us or our unitholders if the resolution of the conflict is:

•: approved by the conflicts committee, if established, although our general partner is not obligated to seek such approval;
•: approved by the vote of a majority of the outstanding common and management units, excluding any units owned by our general partner or any of its affiliates;
•: on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
•: fair and reasonable to us, taking into account the totality of the relationships among the parties involved, including other transactions that may be particularly favorable or advantageous to us.

If a conflicts committee is established, our general partner may, but is not required to, seek the approval of such resolution from the conflicts committee. If our general partner does not seek approval from such conflicts committee and its board of directors determines that the resolution or course of action taken with respect to the conflict of interest satisfies either of the standards set forth in the third and fourth bullet points above, then it will be presumed that, in making its decision, the board of directors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or us, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Unless the resolution of a conflict is specifically provided for in our partnership agreement, our general partner or the conflicts committee may consider any factors it determines in good faith to consider when resolving the conflict. When our partnership agreement requires someone to act in good faith, it requires that person to reasonably believe that he is acting in the best interests of the partnership, unless the context otherwise requires.

Conflicts of interest could arise in the situations described below, among others.

Actions taken by our general partner may affect the amount of cash available for distribution to our unitholders.

The amount of cash that is available for distribution to our unitholders is affected by decisions of our general partner regarding such matters as:

•: the expenses associated with being a public company and other general and administrative expenses;

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•: interest expense related to current and future indebtedness;
•: expenditures, at our election, to maintain or increase our general partner interest in Buckeye;
•: reserves our general partner believes prudent to maintain for the proper conduct of our business or to provide for future distributions; and
•: a decision by our general partner's board of directors to limit or modify the incentive distributions we are entitled to receive.

In addition, borrowings by us and our affiliates do not constitute a breach of any duty owed by our general partner to our unitholders.

We do not have any officers or employees and rely solely on officers and employees of MainLine Management LLC. In addition, all of our general partner's officers also serve as executive officers of Buckeye's general partner.

Affiliates of our general partner conduct businesses and activities of their own in which we have no economic interest. If these separate activities are significantly greater than our activities, there could be material competition for the time and effort of the officers and employees who provide services to our general partner. The officers of our general partner are not required to work full time on our affairs.

We will reimburse our general partner and its affiliates for expenses.

We will reimburse our general partner and its affiliates for costs incurred in managing and operating us, including costs incurred in rendering corporate staff and support services to us. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us in good faith. Please read "Certain Relationships and Related Transactions."

Our general partner intends to limit its liability regarding our obligations.

Our general partner intends to limit its liability under contractual arrangements so that the other party has recourse only to our assets, and not against our general partner or its assets. Our partnership agreement provides that any action taken by our general partner to limit its liability or our liability is not a breach of our general partner's fiduciary duties, even if we could have obtained more favorable terms without the limitation on liability.

Unitholders will have no right to enforce obligations of our general partner and its affiliates under agreements with us.

Any agreements between us on the one hand, and our general partner and its affiliates, on the other, will not grant to our unitholders, separate and apart from us, the right to enforce the obligations of our general partner and its affiliates in our favor.

Contracts between us, on the one hand, and our general partner and its affiliates, on the other, will not be the result of arm's-length negotiations.

Our partnership agreement allows our general partner to determine, in good faith, any amounts to pay itself or its affiliates for any services rendered to us. Our general partner may also enter into additional contractual arrangements with any of its affiliates on our behalf. Neither our partnership agreement nor any of the other agreements, contracts and arrangements between us, on the one hand, and our general partner and its affiliates, on the other, are or will be the result of arm's-length negotiations.

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Our general partner will determine, in good faith, the terms of any of these transactions entered into after the sale of the common units offered in this offering.

Our general partner and its affiliates will have no obligation to permit us to use any facilities or assets of our general partner and its affiliates, except as may be provided in contracts entered into specifically dealing with that use. There will not be any obligation of our general partner and its affiliates to enter into any contracts of this kind.

Common units are subject to our general partner's call right.

Our general partner may exercise its right to call and purchase common units as provided in our partnership agreement or assign this right to one of its affiliates or to us. Our general partner may use its own discretion, free of fiduciary duty restrictions, in determining whether to exercise this right. As a result, a common unitholder may have his common units purchased from him at an undesirable time or price. Please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Call Right."

We may not choose to retain separate counsel for ourselves or for the holders of units.

The attorneys, independent accountants and others who have performed services for us regarding this offering have been retained by our general partner. Attorneys, independent accountants and others who will perform services for us are selected by our general partner or the conflicts committee, if established, and may perform services for our general partner and its affiliates. We may retain separate counsel for ourselves or the holders of our units in the event of a conflict of interest between our general partner and its affiliates, on the one hand, and us or the holders of our units, on the other, depending on the nature of the conflict. We do not intend to do so in most cases.

Fiduciary Duties

Our general partner may be accountable to us and our unitholders as a fiduciary. Fiduciary duties owed to unitholders by our general partner are prescribed by law and our partnership agreement. The Delaware Revised Uniform Limited Partnership Act, which we refer to in this prospectus as the Delaware Act, provides that Delaware limited partnerships may, in their partnership agreements, modify, restrict or expand the fiduciary duties otherwise owed by a general partner to limited partners and the partnership.

Our partnership agreement contains various provisions modifying and restricting the fiduciary duties that might otherwise be owed by our general partner. We have adopted these restrictions to allow our general partner or its affiliates to engage in transactions with us that would otherwise be prohibited by state-law fiduciary duty standards and to take into account the interests of other parties in addition to our interests when resolving conflicts of interest. We believe this is appropriate and necessary because our general partner's board of directors has fiduciary duties to manage our general partner in a manner beneficial to its owners, as well as to you. Without these modifications, the general partner's ability to make decisions involving conflicts of interest would be restricted. The modifications to the fiduciary standards enable our general partner to take into consideration all parties involved in the proposed action, so long as the resolution is fair and reasonable to us as described below. These modifications also enable our general partner to attract and retain experienced and capable directors. These modifications are detrimental to the unitholders because they restrict the remedies available to unitholders for actions that, without those limitations, might constitute breaches of fiduciary duty, as described below, and permit our general partner to take into account the interests of third parties in addition to our interests when resolving conflicts of

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interest. The following is a summary of the material restrictions of the fiduciary duties owed by our general partner to the limited partners:

State-law fiduciary duty standards		Fiduciary duties are generally considered to include an obligation to act in good faith and with due care and loyalty. The duty of care, in the absence of a provision in a partnership agreement providing otherwise, would generally require a general partner to act for the partnership in the same manner as a prudent person would act on his own behalf. The duty of loyalty, in the absence of a provision in a partnership agreement providing otherwise, would generally prohibit a general partner of a Delaware limited partnership from taking any action or engaging in any transaction where a conflict of interest is present.
		The Delaware Act generally provides that a limited partner may institute legal action on behalf of the partnership to recover damages from a third party where a general partner has refused to institute the action or where an effort to cause a general partner to do so is not likely to succeed. In addition, the statutory or case law of some jurisdictions may permit a limited partner to institute legal action on behalf of himself and all other similarly situated limited partners to recover damages from a general partner for violations of its fiduciary duties to the limited partners.
Partnership agreement modified standards		Our partnership agreement contains provisions that waive or consent to conduct by our general partner and its affiliates that might otherwise raise issues about compliance with fiduciary duties or applicable law. For example, our partnership agreement provides that when our general partner is acting in its capacity as our general partner, as opposed to in its individual capacity, it must act in "good faith" and will not be subject to any other standard under applicable law. In addition, when our general partner is acting in its individual capacity, as opposed to in its capacity as our general partner, it may act without any fiduciary obligation to us or the unitholders whatsoever. These standards reduce the obligations to which our general partner would otherwise be held.

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		In addition to the other more specific provisions limiting the obligations of our general partner, our partnership agreement further provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for errors of judgment or for any acts or omissions unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that the general partner or its officers and directors acted in bad faith or engaged in fraud or willful misconduct, or in the case of a criminal matter, acted with the knowledge that such conduct was unlawful.
		Special provisions regarding affiliated transactions. Our partnership agreement generally provides that affiliated transactions and resolutions of conflicts of interest not involving a vote of unitholders and that are not approved by the conflicts committee of the board of directors of our general partner must be:
		•		on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
		•		"fair and reasonable" to us, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to us).
		If our general partner does not seek approval from the conflicts committee and its board of directors determines that the resolution or course of action taken with respect to the conflict of interest satisfies either of the standards set forth in the bullet points above, then it will be presumed that, in making its decision, the board of directors, which may include board members affected by the conflict of interest, acted in good faith and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. These standards reduce the obligations to which our general partner would otherwise be held.

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Rights and remedies of unitholders

The Delaware Act generally provides that a limited partner may institute legal action on behalf of the partnership to recover damages from a third party where a general partner has refused to institute the action or where an effort to cause a general partner to do so is not likely to succeed. These actions include actions against a general partner for breach of its fiduciary duties or of the partnership agreement. In addition, the statutory or case law of some jurisdictions may permit a limited partner to institute legal action on behalf of himself and all other similarly situated limited partners to recover damages from a general partner for violations of its fiduciary duties to the limited partners.

By purchasing our units, each unitholder automatically agrees to be bound by the provisions in our partnership agreement, including the provisions discussed above. This is in accordance with the policy of the Delaware Act favoring the principle of freedom of contract and the enforceability of partnership agreements. The failure of a limited partner or assignee to sign a partnership agreement does not render the partnership agreement unenforceable against that person.

We must indemnify our general partner and its officers, directors, managers and certain other specified persons, to the fullest extent permitted by law, against liabilities, costs and expenses incurred by our general partner or these other persons. We must provide this indemnification unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that these persons acted in bad faith or engaged in fraud or willful misconduct. We must also provide this indemnification for criminal proceedings unless our general partner or these other persons acted with knowledge that their conduct was unlawful. Thus, our general partner could be indemnified for its negligent acts if it met the requirements set forth above. To the extent these provisions purport to include indemnification for liabilities arising under the Securities Act, in the opinion of the Securities and Exchange Commission, such indemnification is contrary to public policy and, therefore, unenforceable. Please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Indemnification."

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DESCRIPTION OF OUR COMMON UNITS

Common Units

Our common units represent limited partner interests in us. The holders of our common units are entitled to participate in our distributions and exercise the rights or privileges available to limited partners under our partnership agreement. For a description of the rights and preferences of holders of our common units and management units in our distributions, please read "Our Cash Distribution Policy and Restrictions on Distributions." For a description of the rights and privileges of limited partners under our partnership agreement, including voting rights, please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P."

We have been authorized to list our common units on the New York Stock Exchange under the symbol "BGH."

Transfer Agent and Registrar

Duties. Computershare Trust Company N.A., will serve as registrar and transfer agent for our common units. We will pay all fees charged by the transfer agent for transfers of our common units except the following fees that will be paid by unitholders:

•: surety bond premiums to replace lost or stolen certificates, taxes and other governmental charges;
•: special charges for services requested by a holder of a common unit; and
•: other similar fees or charges.

There will be no charge to holders for disbursements of our cash distributions. We will indemnify the transfer agent, its agents and each of their shareholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the indemnified person or entity.

Resignation or Removal. The transfer agent may at any time resign, by notice to us, or be removed by us. The resignation or removal of the transfer agent will become effective upon our appointment of a successor transfer agent and registrar and its acceptance of the appointment. If no successor has been appointed and accepted the appointment within 30 days after notice of the resignation or removal, we are authorized to act as the transfer agent and registrar until a successor is appointed.

Transfer of Common Units

By transfer of our common units in accordance with our partnership agreement, each transferee of our common units will be admitted as a unitholder with respect to the common units transferred when such transfer and admission is reflected in our books and records. Additionally, each transferee of our common units:

•: represents that the transferee has the capacity, power and authority to become bound by our partnership agreement;
•: automatically agrees to be bound by the terms and conditions of, and is deemed to have executed, our partnership agreement; and
•: gives the consents and approvals contained in our partnership agreement, such as the approval of all transactions and agreements that we are entering into in connection with our formation and this offering.

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A transferee will become a substituted limited partner for the transferred common units automatically upon the recording of the transfer on our books and records. Our general partner will cause any transfers to be recorded on our books and records no less frequently than quarterly.

We may, at our discretion, treat the nominee holder of a common unit as the absolute owner. In that case, the beneficial holder's 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 transfers of securities. In addition to other rights acquired upon transfer, the transferor gives the transferee the right to become a substituted limited partner in our partnership for the transferred 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.

Management Units

In addition to the common units, as of the closing of this offering, we will have 1,362,000 management units outstanding. These units will be issued to the current owners of MainLine's Class B units, in exchange for a contribution of those Class B units to us. Each management unit will represent a limited partner interest in us and will be entitled to receive quarterly cash distributions in the same amount and at the same time as the quarterly cash distributions we make on each common unit. Each management unit will be allocated a portion of our income, gain, loss, deduction and credit on a pro rata basis with each common unit, and each management unit will be entitled to receive distributions upon liquidation in the same manner and at the same time as each common unit. Each management unit, whether or not vested, will be convertible into one common unit at the election of the holder of the management unit at any time after the management unit vests. 30% of the management units are subject to vesting, with 10% vesting on May 4, 2007, 2008 and 2009. The management units, unlike the common units, will have a zero initial capital account balance but will be allocated a portion of our income, gain, loss, deduction and credit on a pro rata basis with our common units. Other than the zero initial capital account balance and the fact that the management units will not be listed on the New York Stock Exchange, the management unit will be identical to our common units.

Comparison of Rights of Holders of Buckeye's LP Units and Our Common Units

Our common units and Buckeye's LP units are unlikely to trade in simple relation or proportion to one another. Instead, while the trading prices of our common units and Buckeye's LP units are likely to follow generally similar trends, the trading prices may diverge because, among other things, we participate in Buckeye's GP unit distributions and the incentive distributions, and Buckeye's limited partners do not.

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The following table compares certain features of Buckeye's LP units and our common units.

	Buckeye's LP Units	Our Common Units
Distributions	Buckeye has historically made quarterly distributions to its partners of its cash, less certain reserves for expenses and other uses of cash, including reimbursement of expenses owed to its general partner.	We will pay our unitholders quarterly distributions equal to the cash we receive from our Buckeye distributions, less certain reserves for expenses and other uses of cash. Our general partner owns a non-economic general partner interest, but owns common units equal to a 0.01% economic interest in us and is entitled to receive 0.01% of any distributions from us, and our capital structure does not include incentive rights. Therefore, our distributions are allocated exclusively to our units including those owned by our general partner.
Taxation of Entity	Buckeye is a flow-through entity that is not subject to an entity-level federal income tax.	Similarly, we are a flow-through entity that is not subject to an entity-level federal income tax.
	Buckeye expects that holders of its LP units, other than us, will benefit for a period of time from tax basis adjustments and remedial allocations of deductions so that they will be allocated a relatively small amount of federal taxable income compared to the cash distributed to them.	We also expect that holders of our units will benefit for a period of time from tax basis adjustments and remedial allocations of deductions. However, our ownership of incentive distribution rights will cause more taxable income to be allocated to us. If Buckeye is successful in increasing distributions over time, our income allocations from the incentive distribution rights will increase and, therefore, our ratio of federal taxable income to cash distributions will increase.
	Buckeye LP unitholders will receive Schedule K-1's from Buckeye reflecting the unitholders' share of Buckeye's items of income, gain, loss and deduction at the end of each fiscal year.	Similarly, holders of our units also will receive Schedule K-1's from us reflecting the unitholders' share of our items of income, gain, loss and deduction at the end of each fiscal year.

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Source of Cash Flow	Buckeye may, generally, engage in acquisition and development activities that expand its business and operations.	Our cash-generating assets consist of our general partner interests in Buckeye and we currently have no independent operations. Accordingly, our financial performance and our ability to pay cash distributions to our unitholders is directly dependent upon the performance of Buckeye.
Limitation on Issuance of Additional Units	Buckeye may issue an unlimited number of additional partnership interests and other equity securities without obtaining its unitholders' approval.	We may issue an unlimited number of additional partnership interests and other equity securities without obtaining our unitholders' approval.
Voting	Certain significant decisions require approval by a "Majority Interest" of LP units, which may be cast either in person or by proxy. A "Majority Interest" requires approval by the vote of a majority of the outstanding LP units. These significant decisions include, among other things, certain amendments to Buckeye's partnership agreement.	Our common units and management units vote together as a single class. Certain significant decisions require approval by a majority of our outstanding units, which may be voted either in person or by proxy. These significant decisions include, among other things: • merger of our company or the sale of all or substantially all of our assets; and
		• certain amendments to our partnership agreement.
	For more information, please read "Material Provisions of the Partnership Agreement of Buckeye Partners L.P.—Meetings; Voting."	For more information, please read "Material Provisions of the Partnership Agreement of Buckeye GP Holdings L.P.—Meetings; Voting."

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Election, Appointment and Removal of General Partner and Directors	Buckeye LP unitholders do not elect the directors of Buckeye GP LLC. Instead, these directors are appointed by MainLine Sub LLC, as the sole member of Buckeye GP LLC.	Similarly, our unitholders do not elect the directors of MainLine Management LLC, our general partner. Instead, these directors are appointed by Carlyle/Riverstone BPL Holdings II, LP, as sole member of our general partner.
	Buckeye's general partner may not be removed unless that removal is approved by the vote of the holders of not less than 80% of the outstanding LP units, including units held by Buckeye's general partner and its affiliates, and Buckeye receives an opinion of counsel regarding limited liability and tax matters.	Our general partner may not be removed unless that removal is approved by the vote of the holders of not less than 80% of our outstanding units, voting together as a single class, including units held by our general partner and its affiliates, and we receive an opinion of counsel regarding limited liability and tax matters.
Preemptive Rights to Acquire Securities	Buckeye limited partners do not have preemptive rights.	Similarly, our unitholders do not have preemptive rights.
Liquidation	Buckeye will dissolve upon any of the following:	We will dissolve upon any of the following:
	• expiration of the term of Buckeye, which is scheduled to occur December 31, 2086;	• the election of our general partner to dissolve our company, if approved by the holders of not less than 66²/3% of our units;
	• the election of Buckeye's general partner to dissolve Buckeye, if approved by the holders of not less than 66²/3% of the Buckeye units;	• the sale, exchange or other disposition of all or substantially all of our assets and properties and those of our subsidiaries;
	• the withdrawal of Buckeye's general partner unless a successor is appointed prior to such withdrawal; and	• the entry of a decree of judicial dissolution of our company; and

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• bankruptcy or dissolution of Buckeye's general partner or any other event that results in its ceasing to be Buckeye's general partner other than by reason of its withdrawal or removal in accordance with Buckeye's partnership agreement.

• the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general partner other than by reason of a transfer of its general partner interest in accordance with our partnership agreement or withdrawal or removal following approval and admission of a successor.

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MATERIAL PROVISIONS OF THE PARTNERSHIP
AGREEMENT OF BUCKEYE GP HOLDINGS L.P.

The following is a summary of the material provisions of the Amended and Restated Agreement of Limited Partnership of Buckeye GP Holdings L.P. which could impact our results of operations. The Amended and Restated Agreement of Limited Partnership of Buckeye GP Holdings L.P., which is referred to in this prospectus as our partnership agreement, is included in this prospectus as Appendix A and will be adopted contemporaneously with the closing of this offering.

We summarize the following provisions of our partnership agreement elsewhere in this prospectus:

•: With regard to the transfer of common units, please read "Description of Our Common Units—Transfer of Common Units."
•: With regard to distributions of available cash, please read "Our Cash Distribution Policy and Restrictions on Distributions" and "How We Make Cash Distributions."
•: With regard to allocations of taxable income and taxable loss, please read "Material Tax Consequences."

Organization and Duration

We were formed on June 15, 2006 and have a perpetual existence.

Purpose

Under our partnership agreement we are permitted to engage, directly or indirectly, in any business activity that is approved by our general partner and that lawfully may be conducted by a limited partnership organized under Delaware law; provided, that our general partner may not cause us to engage, directly or indirectly, in any business activity that our general partner determines would cause us to be treated as an association taxable as a corporation or otherwise taxable as an entity for federal income tax purposes.

Although our general partner has the ability to cause us, our affiliates or our subsidiaries to engage in activities other than the ownership of partnership interests in Buckeye, our general partner has no current plans to do so and may decline to do so free of any fiduciary duty or obligation whatsoever to us or the limited partners, including any duty to act in good faith or in the best interest of us or our limited partners. Our general partner is authorized in general to perform all acts it determines to be necessary or appropriate to carry out our purposes and to conduct our business.

Power of Attorney

Each limited partner, and each person who acquires a unit from a unitholder, 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 our general partner the authority to amend, and to grant consents and waivers under, our partnership agreement.

Capital Contributions

Our unitholders are not obligated to make additional capital contributions, except as described below under "—Limited Liability."

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Limited Liability

Assuming that a limited partner does not participate in the control of our business within the meaning of 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 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 our 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 our limited partners could be held personally liable for our obligations under the laws of Delaware, to the same extent as our general partner. This liability would extend to persons who transact business with us 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 our general partner. While this does not mean that a limited partner could not seek legal recourse, we know of 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 the partnership, would 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 will 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 will 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 the partnership, except the assignee is not obligated for liabilities unknown to him at the time he became a limited partner and that could not be ascertained from the partnership agreement.

Our subsidiaries conduct business in 17 states. If it were determined that we were conducting business in any state without compliance with the applicable limited partnership or limited liability company statute, or that the right or exercise of the right by the limited partners as a group to remove or replace our 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 purposes of the statutes of any relevant jurisdiction, then the limited partners could be held personally liable for our obligations under the law of that jurisdiction to the same extent as our general partner under the circumstances. We operate in a manner that our general partner considers reasonable and necessary or appropriate to preserve the limited liability of the limited partners.

Voting Rights

The following is a summary of the unitholder vote required for the matters specified below. In voting their units, our general partner and its affiliates will have no fiduciary duty or obligation whatsoever to us or the limited partners, including any duty to act in good faith or in the best

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interests of us or the limited partners. Generally, unitholders will be entitled to vote according to their percentage interests in us, and holders of a majority of our outstanding units, either in person or by proxy, constitute a quorum. Please read "—Meetings; Voting."

Issuance of additional units		No approval right.
Amendment of our partnership agreement		Certain amendments may be made by our general partner without the approval of our unitholders. Other amendments generally require the approval of a majority of our outstanding units. Please read "—Amendments to Our Partnership Agreement."
Merger or the sale of all or substantially all of our assets		A majority of our outstanding units in certain circumstances. Please read "—Merger, Sale or Other Disposition of Assets."
Dissolution		Two-thirds of our outstanding units. Please read "—Termination and Dissolution."
Reconstitution upon dissolution		A majority of our outstanding units. Please read "—Termination and Dissolution."
Withdrawal of our general partner		Under most circumstances, the approval of a majority of our outstanding units, excluding units held by our general partner and its affiliates, is required for the withdrawal of the general partner prior to the later of September 30, 2016 in a manner that would cause our dissolution. Please read "—Withdrawal or Removal of the General Partner."
Removal of our general partner		Not less than 80% of our outstanding units, including units held by our general partner and its affiliates. Please read "—Withdrawal or Removal of the General Partner."
Transfer of the general partner interest		Our general partner may transfer all, but not less than all, of its general partner interest in us without a vote of our unitholders to another entity in connection with its merger or consolidation with or into, or sale of all or substantially all of its assets to, such person. The approval of a majority of the units, excluding units held by our general partner and its affiliates, is required in other circumstances for a transfer of the general partner interest to a third party prior to September 30, 2016. Please read "—Transfer of General Partner Interests."

Issuance of Additional Securities

Our partnership agreement authorizes us to issue an unlimited number of additional limited partner interests and other equity securities for the consideration and on the terms and conditions established by our general partner in its sole discretion without the approval of any limited partners.

In accordance with Delaware law and the provisions of our partnership agreement, we may also issue additional partnership interests that have special voting rights to which the common and management units are not entitled.

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Amendments to Our Partnership Agreement

General

Amendments to our partnership agreement may be proposed only by or with the consent of our general partner. To adopt a proposed amendment, other than the amendments discussed below, our general partner must seek approval of a majority of our outstanding units required to approve the amendment or call a meeting of the limited partners to consider and vote upon the proposed amendment.

Prohibited Amendments

No amendment may be made that would:

(1): enlarge the obligations of any limited partner without its consent, unless approved by at least a majority of the type or class of limited partner interests so affected, or
(2): enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable by us to our general partner or any of its affiliates without the consent of our general partner, which may be given or withheld in its sole discretion.

The provision of our partnership agreement preventing the amendments having the effects described in clauses (1) or (2) above can be amended upon the approval of the holders of at least 90% of the outstanding units.

No Unitholder Approval

Our general partner may generally make amendments to our partnership agreement without the approval of any limited partner or assignee to reflect:

(1): a change in our name, the location of our principal place of business, our registered agent or its registered office,
(2): the admission, substitution, withdrawal or removal of partners in accordance with our partnership agreement,
(3): a change that our general partner determines is necessary or advisable for us to qualify or to continue our qualification as a limited partnership or a partnership in which the limited partners have limited liability under the laws of any state or to ensure that we will not be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes,
(4): an amendment that is necessary, in the opinion of our counsel, to prevent us or our general partner or its directors, officers, agents or trustees, from in any manner being subjected to the provisions of the Investment Company Act of 1940, the Investment Advisors Act of 1940, or "plan asset" regulations adopted under the Employee Retirement Income Security Act of 1974, whether or not substantially similar to plan asset regulations currently applied or proposed,
(5): an amendment that our general partner determines to be necessary or appropriate for the authorization of additional partnership securities or rights to acquire partnership securities,
(6): any amendment expressly permitted in our partnership agreement to be made by our general partner acting alone,

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(7): an amendment effected, necessitated or contemplated by a merger agreement that has been approved under the terms of our partnership agreement,
(8): any amendment that, in the discretion of our general partner, is necessary or advisable for the formation by us, or our investment in, any corporation, partnership or other entity, as otherwise permitted by our partnership agreement,
(9): a change in our fiscal year or taxable year and related changes,
(10): a merger with or conveyance to another limited liability entity that is newly formed and has no assets, liabilities or operations at the time of the merger or conveyance other than those it receives by way of the merger or conveyance, or
(11): any other amendments substantially similar to any of the matters described in (1) through (10) above.

In addition, our general partner may make amendments to our partnership agreement without the approval of any limited partner or assignee if those amendments, in the discretion of our general partner:

(1): do not adversely affect our limited partners (or any particular class of limited partners) in any material respect,
(2): are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state agency or judicial authority or contained in any federal or state statute,
(3): are necessary or appropriate to facilitate the trading of our limited partner interests or to comply with any rule, regulation, guideline or requirement of any securities exchange on which our limited partner interests are or will be listed for trading,
(4): are necessary or appropriate for any action taken by our general partner relating to splits or combinations of units under the provisions of our partnership agreement, or
(5): are required to effect the intent of the provisions of our partnership agreement or are otherwise contemplated by our partnership agreement.

Finally, our partnership agreement specifically permits our general partner to authorize Buckeye GP LLC to limit or modify its incentive rights if our general partner determines that such limitation or modification does not adversely affect our limited partners in any material respect.

Opinion of Counsel and Unitholder Approval

Our general partner will not be required to obtain an opinion of counsel that an amendment will not result in a loss of limited liability to the limited partners or result in our being treated as an entity for federal income tax purposes if one of the amendments described above under "—No Unitholder Approval" should occur. No other amendments to our partnership agreement will become effective without the approval of holders of at least 90% of the outstanding units, unless we obtain an opinion of counsel to the effect that the amendment will not affect the limited liability under applicable law of any of our limited partners. Any amendment that reduces the voting percentage required to take any action must be approved by the affirmative vote of limited partners constituting not less than the voting requirement sought to be reduced.

In addition to the above restrictions, any amendment that would have a material adverse effect on the rights or preferences of any type or class of outstanding units in relation to other classes of units will require the approval of at least a majority of the type or class of units so affected. Any amendment that reduces the voting percentage required to take any action must be approved by

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the affirmative vote of limited partners whose aggregate outstanding units constitute not less than the voting requirement sought to be reduced.

Merger, Sale or Other Disposition of Assets

Our partnership agreement generally prohibits our general partner, without the prior approval of a majority of our outstanding units, from causing us to, among other things, sell, exchange or otherwise dispose of all or substantially all of our assets in a single transaction or a series of related transactions, including by way of merger, consolidation or other combination, or approving on our behalf the sale, exchange or other disposition of all or substantially all of the assets of our subsidiaries. Our general partner may, however, mortgage, pledge, hypothecate or grant a security interest in all or substantially all of our assets without that approval. Our general partner may also sell all or substantially all of our assets under a foreclosure or other realization upon those encumbrances without that approval.

If conditions specified in our partnership agreement are satisfied, our general partner may merge us or any of our subsidiaries into, or convey some or all of our assets to, a newly formed entity if the sole purpose of that merger or conveyance is to effect a mere change in our legal form into another limited liability entity. Our unitholders are not entitled to dissenters' rights of appraisal under our partnership agreement or applicable Delaware law in the event of a merger or consolidation, a sale of substantially all of our assets or any other transaction or event.

Termination and Dissolution

We will continue as a limited partnership until terminated under our partnership agreement. We will dissolve upon:

(1): the election of our general partner to dissolve us, if approved by 66²/3% of our outstanding units,
(2): there being no limited partners, unless we are continued without dissolution in accordance with applicable Delaware law,
(3): the entry of a decree of judicial dissolution of us, or
(4): the withdrawal or removal of our general partner or any other event that results in its ceasing to be our general partner other than by reason of a transfer of general partner interests in accordance with our partnership agreement or withdrawal or removal of our general partner following approval and admission of a successor.

Upon a dissolution under clause (4) above, the holders of a majority of our outstanding units may also elect, within specific time limitations, to continue our business on the same terms and conditions described in our partnership agreement by appointing as a successor general partner an entity approved by the holders of a majority of the outstanding units, subject to our receipt of an opinion of counsel to the effect that:

(1): the action would not result in the loss of limited liability of any limited partner, and
(2): neither we nor the reconstituted limited partnership would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of that right to continue.

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 of the powers of our

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general partner that the liquidator deems necessary or desirable in its judgment, liquidate our assets and apply the proceeds of the liquidation as provided in "How We Make Cash Distributions—Distributions of Cash upon Liquidation." The liquidator may defer liquidation of our assets for a reasonable period of time or distribute assets to partners in kind if it determines that a sale would be impractical or would cause undue loss to the partners.

Withdrawal or Removal of the General Partner

Except as described below, our general partner has agreed not to withdraw voluntarily as the general partner prior to September 30, 2016 without obtaining the approval of the holders of at least a majority of the outstanding units, excluding units held by our general partner and its affiliates (including us), and furnishing an opinion of counsel regarding limited liability and tax matters. On or after September 30, 2016, 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 the partnership agreement. Notwithstanding the information above, our general partner may withdraw without unitholder approval upon 90 days' notice to our limited partners if at least 50% of the outstanding units are held or controlled by one person and its affiliates other than our general partner and its affiliates.

Upon the withdrawal of our general partner under any circumstances, the holders of a majority of the outstanding units may select a successor to that 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 the outstanding units agree in writing to continue our business and to appoint a successor general partner. Please read "—Termination and Dissolution" above.

Our general partner may not be removed unless that removal is approved by the vote of the holders of not less than 80% of our outstanding units and we receive an opinion of counsel regarding limited liability and tax matters. Any removal of our general partner is also subject to the approval of a successor general partner by the vote of the holders of a majority of the outstanding units. The ownership of more than 20% of our outstanding units by our general partner and its affiliates would give it the practical ability to prevent its removal. Upon completion of this offering, the owner of our general partner will beneficially own approximately 53.7% of our outstanding units.

In addition, we are required to reimburse the departing general partner for all amounts due the departing general partner, including, without limitation, all employee-related liabilities, including severance liabilities, incurred for the termination of any employees employed by the departing general partner or its affiliates for our benefit.

Transfer of General Partner Interests

Except for transfer by our general partner of all, but not less than all, of its general partner interests in us to another entity as part of the merger or consolidation of our general partner with or into another entity or the transfer by our general partner of all or substantially all of its assets to another entity, our general partner may not transfer all or any part of its general partner interest in us to another person prior to September 30, 2016 without the approval of the holders of at least a majority of the outstanding units, excluding units held by our general partner and its affiliates. As a condition of this transfer, the transferee must assume the rights and duties of the general partner to whose interest that transferee has succeeded, agree to be bound by the provisions of our partnership agreement and furnish an opinion of counsel regarding limited liability and tax matters. At any time, the owner of our general partner may sell or transfer all or part of its membership interests in our general partner without the approval of the unitholders, subject to certain restrictions

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as described elsewhere in this prospectus. Please read "Certain Relationships and Related Transactions."

Change of Management Provisions

Our partnership agreement contains specific provisions that are intended to discourage a person or group from attempting to remove our general partner as general partner or otherwise change management. If any person or group other than our general partner and its affiliates acquires beneficial ownership of 20% or more of any class of our units, that person or group loses voting rights on all of its units. This loss of voting rights does not apply to any person or group that acquires the units from our general partner or its affiliates and any transferees of that person or group approved by our general partner.

Unitholder Rights Plan

Our partnership agreement provides that our general partner, in its sole discretion, may at any time adopt a unitholder rights plan similar to a shareholder rights plan for corporations. If adopted, we would issue a dividend of one right to each holder of common or management units as of a record date to be established by our general partner. The rights would generally become exercisable if a third person or group acquires ownership in excess of a specified percentage of our common units or initiated a tender offer for in excess of that specified percentage percent of our common units. Upon such a triggering event, each right would initially entitle our unitholders to purchase a fractional share of a class of preferred units, which would convert into the right to purchase our common units. In such an event, all rights holders except such acquiring third person or group may exercise each right to purchase one common unit (or shares of the third-person acquirer in certain circumstances) at half of our common units' then-current market price. The rights will also be redeemable by us for $0.01 per right. Further details of the rights plan will be outlined in a letter that will be mailed to holders of our common units as of the record date selected by our general partner upon adoption of any such plan.

If adopted, the rights will cause substantial dilution to any person or group that attempts to acquire us. As a result, the overall effect of the rights may be to render more difficult or discourage any attempt to acquire us. Because the board of directors of our general partner can approve a redemption of the rights or a permitted offer, the rights, if adopted, should not interfere with a merger or other business combination approved by the board of directors of our general partner. By purchasing a common unit, you consent to the adoption of the rights agreement by our general partner.

Call Right

If at any time not more than 10% of the then-issued and outstanding limited partner interests of any class are held by persons other than our general partner and its affiliates, our general partner will have the right, which it may assign in whole or in part to any of its affiliates or to us, to acquire all, but not less than all, of the remaining limited partner interests of the class held by unaffiliated persons as of a record date to be selected by our general partner, on at least ten but not more than 60 days notice. The purchase price in the event of such a purchase will be the greater of:

(1): the highest price paid by our general partner or any of its affiliates for any limited partner interests of the class purchased during the 90 day period preceding the date such notice is first mailed; and

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(2): the average of the daily closing prices of the limited partner interests over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed.

At the completion of this offering, our current equity owners, including certain officers of our general partners, will own 62.9% of our common units.

As a result of our general partner's right to purchase outstanding limited partner interests, a holder of limited partner interests may have his limited partner interests purchased at an undesirable time or price. The tax consequences to a unitholder of the exercise of this call right are the same as a sale by that unitholder of his units in the market. Please read "Material Tax Consequences—Disposition of Units."

Meetings; Voting

Except as described below regarding a person or group owning 20% or more 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, 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. Unitholders may vote either in person or by proxy at meetings. The holders of a majority of the outstanding units, represented in person or by proxy, will 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 will be the greater percentage.

Each record holder of a unit has a vote according to his percentage interest in us, although additional limited partner interests having special voting rights could be issued. Please read "—Issuance of Additional Securities" above. 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, acquires, in the aggregate, beneficial ownership of 20% or more of any class of units then outstanding, that 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.

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Status as Limited Partner

By transfer of common units in accordance with our partnership agreement, each transferee of common units shall be admitted as a limited partner with respect to the common units transferred when such transfer and admission is reflected in our books and records. Except as described under "—Limited Liability" above, the common units will be fully paid, and unitholders will not be required to make additional contributions.

Non-Citizen Assignees; Redemption

If we are or become subject to federal, state or local laws or regulations that, in the reasonable determination of our general partner, create a substantial risk of cancellation or forfeiture of any property that we have an interest in because of the nationality, citizenship or other related status of any limited partner or assignee, we may redeem the units held by the limited partner or assignee at their current market price. To avoid any cancellation or forfeiture, our general partner may require each limited partner or assignee to furnish information about his nationality, citizenship or related status. If a limited partner or assignee fails to furnish information about his nationality, citizenship or other related status within 30 days after a request for the information or our general partner determines after receipt of the information that the limited partner or assignee is not an eligible citizen, the limited partner or assignee may be treated as a non-citizen assignee. In addition to other limitations on the rights of an assignee that is not a substituted limited partner, a non-citizen assignee does not have the right to direct the voting of his units and may not receive distributions in kind upon our liquidation.

Non-Taxpaying Assignees; Redemption

To avoid any adverse effect on the maximum applicable rates chargeable to customers by our subsidiaries that are regulated by FERC, or in order to reverse an adverse determination that has occurred regarding such maximum rate, our partnership agreement provides our general partner the power to amend the agreement. If our general partner, with the advice of counsel, determines that our being a pass-through entity for federal income tax purposes, coupled with the tax status (or lack of proof thereof) of one or more of our limited partners, has, or is reasonably likely to have, a material adverse effect on the maximum applicable rates chargeable to customers by Buckeye's subsidiaries that are regulated by FERC, then our general partner may, in its sole discretion, adopt such amendments to our partnership agreement as it determines necessary or advisable to:

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obtain proof of the federal income tax status of our limited partners (and their owners, to the extent relevant) and

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permit our general partner to redeem the units held by any person who's tax status has or is reasonably likely to have a material adverse effect on the maximum applicable rates or who fails to comply with the procedures instituted by the general partner to obtain proof of the federal income tax status. The redemption price in the case of such a redemption will be the lesser of:

•: the price paid by such unitholder for the relevant unit; and
•: the average of the daily closing prices per unit for the 20 consecutive trading days immediately prior to the date set for redemption.

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Indemnification

Under our partnership agreement, in most circumstances, we will indemnify the following persons, to the fullest extent permitted by law, from and against all losses, claims, damages or similar events:

•: our general partner,
•: any departing general partner,
•: any person who is or was an affiliate of our general partner or any departing general partner,
•: any person who is or was a member, partner, officer, director, employee, agent or trustee of our general partner or any departing general partner or any affiliate of our general partner or any departing general partner,
•: any person who is or was serving at the request of our general partner or any departing general partner or any affiliate of our general partner or any departing general partner as an officer, director, employee, member, partner, agent or trustee of another person, or
•: any person designated by our general partner.

Any indemnification under these provisions will only be out of our assets. Unless it otherwise agrees, our general partner will not be personally liable for, or have any obligation to contribute or loan funds or assets to us to enable it to effectuate, indemnification. We may 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.

Books and Reports

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