Blueknight Announces Growth Projects

Rhea-AI Summary

Blueknight Energy Partners, L.P. (Nasdaq: BKEP, BKEPP) has announced two significant growth projects: the acquisition of an asphalt terminal and a 200-acre industrial park in Colorado, and an organic expansion at an existing terminal. The combined capital investment is estimated at $14-$16 million, with potential future expansion costs of $5-$10 million. The projects should generate attractive returns, supported by long-term contracts averaging eight years. The acquisition will close in 30-60 days, while the expansion is expected to be operational by Q4 2022.

Positive

• Acquisition of a 200-acre industrial park and asphalt terminal in Colorado enhances asset portfolio.
• Total capital investment of $14-$16 million expected to yield attractive returns.
• Long-term contracts for projects average eight years, providing revenue stability.
• Organic expansion at existing terminal to improve logistics and storage capabilities.

Negative

• Expansion project completion is contingent on permitting and regulatory approval, which may introduce delays.

TULSA, Okla., Dec. 13, 2021 (GLOBE NEWSWIRE) -- Blueknight Energy Partners, L.P. (“Blueknight” or the “Partnership”) (Nasdaq: BKEP and BKEPP), announced today that it has entered into a definitive agreement to acquire an asphalt terminal and 200-acre industrial park in Colorado and, in a separate arrangement, entered into a definitive agreement to organically expand the storage, logistics, and product capabilities at an existing asphalt terminal owned by Blueknight. The projects were approved by Blueknight’s Board of Directors.

The combined capital requirements for the two growth projects are expected to range between $14 and $16 million initially, with potential future expansion opportunities ranging between $5 and $10 million in additional growth capital. The projects will be funded with borrowings available under Blueknight’s revolving credit facility and are expected to deliver attractive investment returns in-line with management’s long-term targets. The weighted-average customer contract term related to the two projects is approximately eight years.

“We are pleased to announce projects that showcase our ability to identify and execute accretive opportunities with high-quality customers that fully align with our growth strategy and further enhance Blueknight’s asphalt terminalling portfolio,” commented Andrew Woodward, Chief Executive Officer.

Asphalt Terminal Acquisition

Blueknight entered into a definitive agreement to acquire a 200-acre industrial property in Colorado from an undisclosed seller. The site includes an asphalt terminal with approximately 335 thousand barrels of liquid asphalt storage capacity, of which 155 thousand barrels of storage capacity is operational and currently leased by an existing Blueknight investment grade refining customer. Blueknight plans to further expand current utilization of the existing asphalt terminal and other industrial services at the site not currently factored in its return expectations. Closing is expected to occur in the next 30 to 60 days subject to customary closing conditions.

Organic Expansion at Existing Asphalt Terminal

Blueknight entered into a definitive agreement with a current third-party customer to materially enhance the site capabilities of an existing asphalt terminal owned by Blueknight. Project scope includes the construction and installation of inbound rail logistics, blending equipment for polymer modified asphalt, and additional tank storage. Blueknight anticipates the project will be in service during the fourth quarter of 2022 with initial construction pending final permitting and regulatory approval.

About Blueknight

Blueknight (Nasdaq: BKEP and BKEPP) is a publicly traded master limited partnership that owns the largest independent asphalt terminalling network in the country. Operations include 8.7 million barrels of liquid asphalt storage capacity across 53 terminals and 26 states throughout the U.S. Blueknight is focused on providing integrated terminalling solutions for tomorrow’s infrastructure and transportation end markets. More information is available at www.bkep.com.

Forward-Looking Statements

This release may include forward-looking statements. Statements included in this release that are not historical facts are forward-looking statements. These statements include, but are not limited to, statements with respect to future growth projects, capital requirements, future expansion opportunities and expected investment returns. Such forward-looking statements are subject to various risks and uncertainties. These risks and uncertainties include, among other things, uncertainties relating to the Partnership’s future cash flows and operations, the Partnership’s ability to pay future distributions, future market conditions, current and future governmental regulation, future taxation and other factors discussed in the Partnership’s filings with the Securities and Exchange Commission. 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.

FAQ

What recent expansion projects has Blueknight Energy announced?

Blueknight Energy Partners announced the acquisition of an asphalt terminal and a 200-acre industrial park in Colorado, along with an expansion at an existing asphalt terminal.

What is the estimated investment for Blueknight's new projects?

The capital investment for the two projects is estimated to be between $14 million and $16 million, with potential future expansion costs of $5 million to $10 million.

How long are the customer contracts for Blueknight's new expansion projects?

The weighted-average customer contract term related to the projects is approximately eight years.

When is the expected completion date for Blueknight's organic expansion project?

The organic expansion project at the existing asphalt terminal is expected to be operational by the fourth quarter of 2022.

What is the significance of the asphalt terminal acquisition for Blueknight Energy?

The acquisition enhances Blueknight's asphalt terminalling portfolio and increases its operational capacity.