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its operating expenses and service its debt. However,
pipeline usage declined steadily from 1979 to 1983. Seaway
transported the following volumes of crude oil during those
years:
Barrels of
Year Crude Transported
1979 59,294,000
1980 37,015,000
1981 23,400,000
1982 10,817,000
1983 12,663,000
This decrease in pipeline usage caused Seaway to experience
a shortage of cash and forced the company to make cash
calls pursuant to the TDA between 1980 and 1983.
Petitioner's portion of the cash calls totaled $11,844,791.
Of this amount, approximately $1,327,427 was ultimately
applied to transportation charges for crude oil transported
through the pipeline on petitioner's behalf.
In 1983, Seaway's board of directors decided to sell
the pipeline. Seaway later agreed to sell the pipeline to
Phillips Petroleum (Phillips), one of its shareholders, for
$127.6 million. Phillips also agreed to purchase the port
terminal facilities for $15 million. Seaway sold the
Cushing terminal to Amoco Oil Co. for $10.2 million.
Petitioner’s annual report for 1984 describes the sale of
the pipeline as follows:
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