Blueknight to build Eaglebine-Woodbine crude oil pipeline

Blueknight Energy Partners LP (BKEP) will build a 160-mile, 16-in. OD pipeline linking the East Texas Eaglebine-Woodbine crude oil play to Oiltanking Houston’s crude oil and product terminal on the Houston Ship Channel, owned and operated by Oiltanking Partners LP. The Knight Warrior project is backed by long-term shipper commitments, including with a joint venture of Vitol, which also owns 50% of BKEP’s general partner, and SEI Energy LLC.

Knight Warrior, with an initial capacity of 100,000 b/d, will start in Madison County, Tex., and running south through Leon, Walker, and Houston counties, all also in Texas. It will be expandable up to 200,000 b/d and will serve Eaglebine-Woodbine crude producers via stations near North Zulch and Madisonville, Tex., with plans to build a third station near Roans Prairie to accommodate future production growth in the area. The pipeline will segregate and batch crude to help producers capture maximum value.

BKEP will start construction immediately for March 2016 completion. The company estimates the pipeline will cost $300 million, subject to final pipeline design and shipper commitments, and anticipates financing it with a combination of debt and equity.

BKEP last year bought into the Pecos River crude oil pipeline from Pecos, Tex., to a connection with Magellan Midstream Partners LP’s Longhorn pipeline at Crane, Tex. (OGJ Online, Feb. 5, 2013). Longhorn delivers crude from Crane to the gulf coast.

Contact Christopher E. Smith at chriss@ogjonline.com.

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