Blueknight Energy Partners, L.P. (NASDAQ: BKEP) (NASDAQ: BKEPP) (“BKEP” or the “Partnership”), a midstream energy company providing integrated services for companies engaged in the production, distribution and marketing of crude oil, asphalt and other petroleum products, announced today it will launch an open season on March 4, 2013 to solicit shipper commitments to transport crude oil from southern New Mexico to Crane, Texas. Interested customers must submit binding commitments by April 12, 2013.
Southeastern New Mexico and Culberson and Reeves Counties in Texas represent emerging crude oil production areas that are underserved by pipeline capacity. The proposed 95 mile extension will connect to BKEP’s previously announced Pecos River Pipeline, which is expected to commence operation in the second quarter of 2013, and will provide shippers access to the Gulf Coast and Midland markets. Depending on the strength of response from producers and shippers to the open season, the north extension’s crude transportation capacity could reach up to 100,000 barrels per day and would be in service by the first quarter of 2015.
BKEP entered into an agreement with Advantage Pipeline, L.L.C. (“Advantage”) to acquire approximately 30% ownership in a 70 mile crude oil pipeline to be constructed between Pecos and Crane, Texas. The Pecos River Pipeline will enable west Texas producers to deliver crude oil to Gulf Coast markets through a pipeline connection at Crane, Texas. BKEP will operate the pipeline under a long-term agreement with Advantage.
“The Pecos River Pipeline extension establishes a critical link to the attractive Gulf Coast market hubs for producers and shippers actively drilling in the area,” commented Mark Hurley, BKEP’s chief executive officer. “The proposed 95 mile extension will afford shippers and producers in the rapidly developing production area of New Mexico and around Pecos, Texas a similar opportunity to efficiently and affordably move their crude to markets where they can optimize the price.”