                                                                    Exhibit 10.6

                                 Kaneb Services LLC

                                 August 31, 2004

Mr. James L. Tidmore
3205 Wrangler Road
Plano, TX 75074

Dear Mr. Tidmore:

     You are and have been a valuable  and key  employee of Kaneb  Services  LLC
(the "Company") and/or one or more of its Subsidiaries (as hereinafter defined).
The Company  recognizes  that an attempt to effect a major change in the control
of the Company could have a disturbing  and  disruptive  adverse effect upon you
and your employment  relationship.  In writing this letter to you, management of
the Company is endeavoring to foster and encourage your continued  attention and
dedication  to  your  assigned  duties  in the  face of  potentially  disturbing
circumstances.  Accordingly,  the  Company  agrees,  in  consideration  of  your
continued service, as follows:

     In the event a third party begins a tender or exchange  offer,  initiates a
proxy contest or takes other steps to effect a Change of Control (as hereinafter
defined) of the Company,  the Company will pay to an escrow account  established
at any appropriate banking or trust institution selected by the Company ("Bank")
an amount  equal to 100% of your  then-current  annual base  salary.  The escrow
account will be governed by a standard form of escrow agreement,  an actual copy
of which will be furnished to you upon its execution  and funding.  In addition,
the Company will pay into escrow any incentive  compensation  amounts accrued or
earned to which you are then  entitled  otherwise  than as a result of Change of
Control.  The amounts so  deposited  with Bank are  collectively  referred to as
Escrowed Funds.

     Thereafter, you agree that you will not voluntarily leave the employ of the
Company and all of its Subsidiaries and will perform the services of your office
until the third party has abandoned or terminated  efforts to effect a Change of
Control  or until a Change of  Control  has  occurred.  In the event a Change of
Control occurs,  and your employment by the Company and all of its  Subsidiaries
terminates,  voluntarily or involuntarily, for any reason, you shall be paid the
Escrowed Funds upon your written demand.  In the event such Change of Control is
supported  and endorsed by management  of the Company,  you agree,  upon written
request of the Board of  Directors of the  Company,  to assist,  for a period of
ninety (90) days from the date of Change of Control,  in the orderly  transition
of  management  of the Company,  provided the Company shall pay any expenses you
incur in connection with such assistance.

     For the purposes of this letter,  a "Change of Control"  shall be deemed to
have  taken  place if:  (i) a third  person,  including  a "group" as defined in
Section  13  (d)  (3) of the  Securities  Exchange  Act  of  1934,  becomes  the
beneficial  owner of Member  Interests  (as  defined  in the  Limited  Liability
Company  Agreement of Kaneb  Services LLC) of the Company  having 20% or more of
the total  number of votes that may be cast for the election of directors of the
Company;  or (ii) as a result  of, or in  connection  with,  any cash  tender or
exchange offer, merger or other business combination,  restructure or proceeding
under  the  bankruptcy  laws,  sale or  assets  or  contested  election,  or any
combination of the foregoing transactions,  the persons who are directors of the
Company  before the  transaction  cease to constitute a majority of the Board of
Directors  of the  Company  or any  successor  to the  Company;  or  (iii)  as a
consequence  of a tender or  exchange  offer or a proxy  contest or third  party
consent  solicitation,  a majority of the fair market value of the assets of the
Company are distributed to the Company's securities holders.

     For the purposes of this letter, a "Subsidiary"  means, with respect to the
Company,  (i) a  corporation  a majority of whose  voting  stock is at the time,
directly  or  indirectly,  owned by the  Company,  by one or more  wholly  owned
subsidiaries  of the  Company or by the  Company  and one or more  wholly  owned
subsidiaries of the Company, (ii) a partnership in which the Company or a wholly
owned subsidiary of the Company is, at the date of  determination,  a general or
limited partner of such partnership, but only if the Company or its wholly owned
subsidiary  is entitled to receive more than fifty percent of the assets of such
partnership  upon its  dissolution  or (iii)  any  other  entity  (other  than a
corporation or partnership) in which the Company,  a wholly owned  subsidiary of
the  Company or the Company and one or more  wholly  owned  subsidiaries  of the
Company,  directly or indirectly,  at the date of determination thereof, has (x)
at least a majority  ownership  interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such entity.

     The Company may withdraw the Escrowed  Funds held in the escrow  account if
one year elapses from the date of deposit by the Company of said Escrowed  Funds
into the escrow  account  and if no written  demand for payment has been made by
you during said one year period.  If, prior to the  expiration  of said one year
period,  there shall occur  another event of the type set forth in the preceding
paragraph,  the Company  will not be required to make an  additional  deposit of
Escrowed  Funds,  but the one year period  described  herein  shall be deemed to
commence on the date of the occurrence of the last such event; provided however,
if a period of six (6) months has expired  from the date of the initial  deposit
of Escrowed Funds, any incentive compensation to which you are entitled shall be
recomputed pursuant to the terms of the applicable  incentive  compensation plan
and an appropriate  deposit or withdrawal  adjustment based upon such recomputed
incentive compensation shall be made.

     The  Company  shall  pay the usual and  customary  charges  of the Bank for
acting as escrow  agent.  The Company will be entitled to the payment of any and
all interest and other income  earned by the Bank through the  investment of the
Escrowed Funds.

     The obligations of the Company  contained  herein shall be binding upon the
Company and upon its successors and assigns. Your rights to receive Escrow Funds
are personal to you and may not be assigned.

     If your  employment  with the  Company and all of its  Subsidiaries  should
terminate for any reason prior to the occurrence of the Change of Control events
described  above,  this agreement  shall  terminate and the Company will have no
further obligation to you hereunder.

     If you are in agreement with the foregoing, please indicate your acceptance
by executing and  returning a copy of this letter to my  attention.  A duplicate
original is enclosed for your files.

                                     Very truly yours,

                                     KANEB SERVICES LLC



                                     By:     //s// HOWARD C. WADSWORTH
                                        ----------------------------------------
                                        Name:  Howard C. Wadsworth
                                        Title:    Vice President



AGREED and ACCEPTED this 31st day of August, 2004:

   //s//  JAMES L. TIDMORE
-------------------------------------
James L. Tidmore


