Blueknight Energy Partners
Blueknight Operations New Sized

Blueknight to grow asphalt terminals

Dec. 24, 2021
Company to acquire 200-acre industrial park in Colorado, organically expand an existing terminal through separate agreements

Blueknight Energy Partners recently agreed to acquire an asphalt terminal and 200-acre industrial park in Colorado.

In addition, through a separate agreement, Blueknight says it will expand the storage, logistics, and product capabilities at one of its existing asphalt terminals.

The projects were approved by Blueknight’s board of directors, the company said.

The combined capital requirements for the two growth projects are expected to range between $14 million and $16 million initially, with potential future expansion opportunities ranging between $5 million 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, Blueknight added.

“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,” said Andrew Woodward, Blueknight CEO.

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 335,000 barrels of liquid asphalt storage capacity, of which 155,000 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.