TransMontaigne Partners, LP, Denver, Colo., and Blueknight Energy Partners, LP, Oklahoma City, Okla., have reported they have entered into agreements for the construction and operation of 1,000,000 barrels of crude oil storage adjacent to BKEP’s Cushing, Oklahoma facility.
“TransMontaigne is excited to be expanding its asset base into the Cushing crude oil market in a significant way,” said Randy Majors, Senior Vice President of Business Development for TLP’s general partner. “We believe that the arrangement with BKEP presents a great opportunity for TransMontaigne to deliver superior services to its customers in the Cushing market and to create value for the TLP unitholders.”
“The agreements with TLP demonstrate BKEP’s ability to formulate solutions to meet unique customer requirements,” said Mike Prince, Vice President of Business Development for BKEP’s general partner. “Further, our business arrangement with TLP reflects BKEP’s desire to develop long-term customer relationships that will ultimately drive additional value for our customers and our existing assets.”
TLP will lease a portion of the land at BKEP’s Cushing, Oklahoma facility and construct storage tanks and associated infrastructure on that property for the receipt of crude oil by truck and pipeline, the blending of crude oil and the storage of 1,000,000 barrels of crude oil. BKEP and TLP will cooperate on the design and construction of the facility and BKEP will provide operational services for TLP under a long-term operating agreement and provide connectivity between the TLP facility and the Cushing market through BKEP’s existing facility and infrastructure. TLP has entered into a long-term services agreement with Morgan Stanley Capital Group Inc. for the use of the TLP facility. Construction of the TLP facility is expected to begin in August with completion planned for the second quarter of 2012. Anticipated cost of the project is less than $25 million.