Blueknight Energy Partners, L.P. ("BKEP" or the "Partnership")
(NASDAQ:BKEP) (NASDAQ:BKEPP), today announced plans to build a major
pipeline linking the emerging East Texas Eaglebine/Woodbine crude oil
resource play to Oiltanking Houston, a crude oil and product terminal on
the Houston Ship Channel, owned and operated by Oiltanking Partners,
L.P. (NYSE:OILT). The project is backed by long-term shipper
commitments, one of which is a transportation agreement with a joint
venture between Vitol, a diversified multinational energy company, which
also owns 50% of BKEP's general partner, and SEI Energy, LLC, a natural
gas and crude oil marketer/producer services company with offices in
Tennessee, Texas, Virginia and Oklahoma.
Blueknight will construct a 160-mile, 16-inch diameter pipeline
originating in Madison County and running south through Leon, Walker and
Houston counties. The pipeline will have an initial capacity of 100,000
BPD, will be expandable up to 200,000 BPD and serve Eaglebine/Woodbine
crude oil producers via two origination stations located near North
Zulch and Madisonville with a third station near Roans Prairie planned
to accommodate future production growth in the area. The pipeline will
have the capability to segregate and batch crude oil in order to help
producers capture value for this premium product. Construction on the
pipeline will start immediately and is expected to be complete by March
2016. The pipeline is estimated to cost approximately $300 million,
subject to final pipeline design and shipper commitments, and is
anticipated to be financed using a combination of debt and equity.
"This is a transformative project for our company in terms of scale and
scope," said Mark Hurley, BKEP's Chief Executive Officer. "The
Eaglebine/Woodbine region is emerging as one of the most prolific crude
oil plays in the country and the area needs new infrastructure to
realize its full potential. Our project, which will be known as the
Knight Warrior Pipeline, represents a significant investment in a new
system to ensure crude oil producers have access to key refining
markets. Moreover, our ability to increase the capacity of this pipeline
in the future is an important feature of the project as we see strong
interest from producers to expand their presence and activity in the
Eaglebine/Woodbine play."
"We are pleased to be working with Oiltanking to enhance the Knight
Warrior Pipeline's connectivity," Hurley said. "With Oiltanking Houston
as the termination point, our customers will have a direct link to the
Gulf Coast refinery complex, as well as other U.S. and foreign markets
through their extensive waterfront capabilities."
"One of Blueknight's core principles is being a responsible corporate
citizen and sharing our success with the communities in which we
operate. The Knight Warrior name recognizes the legacy, commitment and
sacrifices of U.S. military veterans and their families," Hurley said.
"We want to honor our veterans, many of whom have been injured while
protecting our freedom during combat duty overseas. Beyond the name of
the pipeline, we actively reach out to hire veterans for positions
throughout our company. We will continue to support organizations that
share our passion to help our veterans improve their lives and
opportunities. Therefore, a portion of the proceeds from this project
and others in the future will be donated to charities supporting our
veterans."
Forward-Looking Statements
This release may include forward-looking statements. Statements included
in this release that are not historical facts are forward-looking
statements. Such forward-looking statements are subject to various risks
and uncertainties. These risks and uncertainties include, among other
things, expectations regarding the development of the Knight Warrior
Pipeline, including the expected timing, costs and profitability of such
project. If any of these risks or uncertainties materializes, or should
underlying assumptions prove incorrect, actual results or outcomes may
vary materially from those expected. The Partnership undertakes no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
About Blueknight Energy Partners, L.P.
BKEP owns and operates a diversified portfolio of complementary
midstream energy assets consisting of approximately 7.8 million barrels
of crude oil storage located in Oklahoma and Texas, approximately 6.6
million barrels of which are located at the Cushing Oklahoma
Interchange, approximately 920 miles of crude oil pipeline located
primarily in Oklahoma and Texas, approximately 300 crude oil
transportation and oilfield services vehicles deployed in Kansas,
Colorado, New Mexico, Oklahoma and Texas and approximately 7.0 million
barrels of combined asphalt product and residual fuel oil storage
located at 42 terminals in 21 states. BKEP provides integrated services
for companies engaged in the production, distribution and marketing of
crude oil, asphalt and other petroleum products. BKEP is headquartered
in Oklahoma City, Oklahoma. For more information, visit the
Partnership's web site at www.bkep.com.
Blueknight Energy Partners, L.P.
Investor Relations, 918-237-4032
investor@bkep.com
or
Media
Relations:
Brent Gooden, 405-715-3232 or 405-818-1900
