Blueknight Energy Partners LP has announced 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.
Blueknight has 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.
The company has also 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.
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