Blue Dolphin Energy Company operates as an independent downstream energy company in the Gulf Coast region of the United States.
The company's subsidiaries operate a light sweet-crude, 15,000 barrel per day (bpd) crude distillation tower with approximately 1.2 million barrels (bbls) of petroleum storage tank capacity in Nixon, Texas.
Segments
The company operates through two segments, Refinery Operations (owned by Lazarus Energy, LLC (LE)); and Tolling and Terminaling (owned by Lazarus Refinin...
Blue Dolphin Energy Company operates as an independent downstream energy company in the Gulf Coast region of the United States.
The company's subsidiaries operate a light sweet-crude, 15,000 barrel per day (bpd) crude distillation tower with approximately 1.2 million barrels (bbls) of petroleum storage tank capacity in Nixon, Texas.
Segments
The company operates through two segments, Refinery Operations (owned by Lazarus Energy, LLC (LE)); and Tolling and Terminaling (owned by Lazarus Refining & Marketing, LLC (LRM) and Nixon Product Storage, LLC (NPS)).
Refinery Operations segment
Assets within this segment consist of a light sweet-crude, 15,000-bpd crude distillation tower, petroleum storage tanks, loading and unloading facilities, and approximately 56 acres of land. This segment's revenue is derived from refined product sales.
The company has a long-term crude supply agreement in place with Tartan (Tartan Oil LLC, an affiliate of Pilot (Pilot Travel Centers LLC)). The volume-based Crude Supply Agreement expires when the company receives 24.8 million net bbls of crude oil. After that, the Crude Supply Agreement automatically renews for successive one-year terms (each such term, a renewal term). Tartan must provide notice of non-renewal at least 60 days before the expiration of any renewal term. For the twelve months ended December 31, 2022, the company received approximately 4.5 million bbls, or 18.4% of the contracted volume under the Crude Supply Agreement. As of December 31, 2022, the company received 13.6 million bbls, or 54.8%, of the total allowable contracted total volume under the Crude Supply Agreement. As of December 31, 2022, 100% of its crude oil was sourced from Tartan under the Crude Supply Agreement.
Products and Markets
The company's market is the Gulf Coast region of the U.S., which the Energy Information Administration (EIA) represents as Petroleum Administration for Defense District 3 (PADD 3). It sells its products primarily in the U.S. within PADD 3. Occasionally, the company sells refined products to customers that export to other countries, such as low sulfur diesel to Mexico.
The Nixon refinery's product slate is moderately adjusted based on market demand. The company produces a single finished product - jet fuel - and several intermediate products, including naphtha, heavy oil-based mud blendstock (HOBM), and atmospheric gas oil (AGO). The company sells its jet fuel to an Affiliate, which is HUBZone (Historically Underutilized Business Zones program established by the Small Business Administration (SBA) to help small businesses in both urban and rural communities) certified. The product sales agreement with the Affiliate has a one-year term expiring upon the earliest to occur of March 31, 2024, plus 30-day carryover or delivery of the maximum quantity of jet fuel. Its intermediate products are primarily sold in nearby markets to wholesalers and refiners as a feedstock for further blending and processing.
Customers
Customers for the company's refined products include distributors, wholesalers, and refineries primarily in the lower portion of the Texas Triangle (the Houston - San Antonio - Dallas/Fort Worth area). It has bulk term contracts in place with most of its customers, including month-to-month, six months, and up to one-year terms. Certain of its contracts require the company's customers to prepay and it to sell fixed quantities and/or minimum quantities of finished and intermediate petroleum products. Many of these arrangements are subject to periodic renegotiation on a forward-looking basis, which could result in higher or lower relative prices on future sales of its refined products.
Tolling and Terminaling segment
Assets within this segment include petroleum storage tanks and loading and unloading facilities. Tolling and Terminaling revenue is derived from storage tank rental fees, ancillary services fees (such as for in-tank blending), and tolling and reservation fees for use of the naphtha stabilizer.
Products and Customers
The Nixon facility's petroleum storage tanks and infrastructure are primarily suited for crude oil and condensate and refined products, such as naphtha, jet fuel, diesel, and fuel oil. Storage customers are typically refiners in the lower portion of the Texas Triangle (the Houston - San Antonio - Dallas/Fort Worth area). Shipments are received and redelivered from within the Nixon facility via pipeline or from third parties via truck. Contract terms range from month to month to three years.
Intellectual Property
The company relies on intellectual property laws to protect its brand, as well as those of its subsidiaries. 'Blue Dolphin Energy Company' is a registered trademark in the U.S. in name and logo form. 'Petroport, Inc.' is a registered trademark in the U.S. in name form. In addition, 'www.blue-dolphin-energy.com' is a registered domain name.
Government Regulations
The company's operations are subject to the Clean Air Act (CAA) and comparable state and local statutes. It generates petroleum product wastes, solid wastes, and ordinary industrial wastes, such as from paints and solvents, which are regulated under the Federal Resource Conservation and Recovery Act (RCRA) and comparable state statues.
The transportation and storage of crude oil and refined products over and adjacent to water involves risks and subjects the company to the provisions of the Clean Water Act (CWA), the Oil Pollution Act of 1990 (OPA 90), and related state requirements.
The company has federally certified Oil Spill Response Organizations (OSROs) available to respond to a spill and, in the case of its offshore pipelines, it maintains the statutory $35.0 million coverage required proof of financial responsibility.
History
Blue Dolphin Energy Company, a Delaware corporation, was founded in 1986. The company was incorporated in 1986.
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