UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (date of earliest event reported): August 16, 2016
BLUEKNIGHT ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
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DELAWARE
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001-33503
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20-8536826
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(State of incorporation
or organization)
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(Commission file number)
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(I.R.S. employer identification number)
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201 NW 10th, Suite 200
Oklahoma City, Oklahoma
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73103
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(Address of principal executive offices)
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(Zip code)
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Registrant’s telephone number, including area code: (405) 278-6400
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (
see
General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01.
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Entry into a Material Definitive Agreement.
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On August 16, 2016, a subsidiary of Blueknight Energy Partners, L.P. (the “Partnership”) and Vitol Inc. executed a third amendment (the “Amendment”) to a Crude Oil Storage Services Agreement with Vitol Inc. (“Vitol”). Fifty percent of the membership interests of Blueknight Energy Partners G.P., L.L.C., the general partner of the Partnership, are indirectly owned by Blueknight Energy Holding, Inc. (“Blueknight Holding”). Blueknight Holding and Vitol are affiliated entities as both companies are indirectly owned by Vitol Holding B.V.
The Amendment extends the term of the agreement (the “Storage Agreement”), which was effective as of November 1, 2010 and scheduled to expire on April 30, 2017, through April 30, 2018. The Amendment also adjusts the rate Vitol is charged for services provided under the amended agreement. Revenues earned under the Storage Agreement are based upon the 2.2 million barrels of storage capacity that is dedicated to Vitol under the agreement.
The foregoing description is a summary of the Amendment and is qualified in its entirety by reference to the Amendment, a copy of which is included as Exhibit 10.1 to this Form 8-K.
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Item 9.01.
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Financial Statements and Exhibits.
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(d)
Exhibits
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EXHIBIT
NUMBER
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DESCRIPTION
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10.1*
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Third Amendment to Crude Oil Storage Services Agreement, effective May 1, 2017.
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*Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions of this exhibit. Omitted material for which confidential treatment has been requested has been separately filed with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BLUEKNIGHT ENERGY PARTNERS, L.P.
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By:
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Blueknight Energy Partners G.P., L.L.C.
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its General Partner
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Date: August 19, 2016
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By:
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/s/ Alex G. Stallings
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Name:
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Alex G. Stallings
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Title:
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Chief Financial Officer and Secretary
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER
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DESCRIPTION
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10.1*
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—
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Third Amendment to Crude Oil Storage Services Agreement, effective May 1, 2017.
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*Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions of this exhibit. Omitted material for which confidential treatment has been requested has been separately filed with the Securities and Exchange Commission.
Exhibit 10.1
*** Where this marking appears throughout this Exhibit 10.1, information has been omitted pursuant to a request for confidential treatment and such information has been filed with the Securities and Exchange Commission separately.
THIRD AMENDMENT TO
CRUDE OIL STORAGE SERVICES AGREEMENT
This
THIRD AMENDMENT TO CRUDE OIL STORAGE SERVICES AGREEMENT
, (the
“Amendment”
) is dated August 12, 2016 but will be effective as of May 1
st
, 2017 (the
“Effective Date”
), made by and between
BKEP Pipeline, L.L.C.
, a Delaware limited liability company, (the
“Operator”
) and
Vitol, Inc.
, a Delaware corporation, (the
“Customer”
), each referred to individually as “Party” or collectively as “Parties”.
RECITALS
WHEREAS
, the parties previously entered into that certain Crude Oil Storage Services Agreement dated effective November 1
st
, 2010, further amended on March 1, 2014 (“
First Amendment
”) and again on May 1, 2015 (“
Second Amendment
”), (the
“Agreements”
), the parties desire to enter into this Third Amendment (
“Third Amendment
”) dated as of the date indicated above, but with an effective date of May 1, 2017 (the “
Effective Date
”). Prior to May 1, 2017, the Second Amendment previously entered into by the Parties shall be in effect and all term and conditions of said Second Amendment shall be in effect and legally binding on the Parties.
WHEREAS
, the parties desire to amend the Agreement as hereinafter described by modifying the Term and Fees of said Agreement.
NOW THEREFORE
, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned Parties hereto agree as follows:
Shell Capacity
. Commencing on the Effective Date, the Shell Capacity available to the Customer for storage as set forth in Third Amendment shall continue to be two million two hundred and fifteen thousand barrels (2,215,000 barrels) of dedicated storage available to the Customer for storage of Customer’s crude oil.
Term.
This Third Amendment shall amend the term of the Second Amendment to One (1) year commencing on May 1
st
, 2017 and ending on April 30, 2018. The Customer shall have a one-time Option (“
Customer Option
”) to extend the term for One (1) additional year commencing on May 1, 2018 and ending on April 30, 2019. Customer must provide written notice to the Operator per the Notice section below at any time prior to February 1, 2018 (“
Customer Option Exercise Deadline”
) in order to exercise the Customer Option. If notice has been provided by Customer of Customer’s intent to exercise the Customer Option, the parties shall work in good faith to negotiate and execute a fourth Amendment within 30 days amending the Term as set forth above. Exercising of the Customer Option will have the effect of extending the Term of the Contracts only, and the Monthly Storage Fee (as defined below) and the Shell Capacity (as defined above) shall remain the same, unless mutually agreed too otherwise by the parties.
Monthly Storage Fee
. Commencing on the Effective Date, the monthly storage fee paid by Customer to Operator will change to *** per Barrel of Shell Capacity (the
“Monthly Storage Fee”
), for a monthly total of ***, regardless of the actual volume of Crude Oil placed in the facility.
Customer Option Notice
. Written notice for exercise of the Customer Option by the Customer must be provided to the Operator by the Customer Option Exercise Deadline to the following Operator individuals:
BKEP Pipeline, L.L.C.
201 NW 10
th
Street, Suite 200
Oklahoma City, OK 73103
Attn: Marcia Mehmert - Sr. Mgr. Business Development
E-Mail:
mmehmert@bkep.com
With a copy to:
BKEP Pipeline, LLC
6060 American Plaza, Suite 600
Tulsa, OK 74135
Attn: Legal Department
A notice given by overnight courier shall be deemed to have been received when the notice is actually delivered to or refused by the Operator, as reflected in the courier company’s delivery records. Notice shall not be given by facsimile transmission, electronic messaging system or email.
Counterparts.
This Amendment may be executed in several counterparts, each of which shall be deemed an original and each of which alone, and all of which together, shall constitute one and the same amendment.
Effect of Amendment.
This Amendment shall be effective as of the Effective Date. Except as expressly amended or modified herein, all other terms, covenants, and the conditions of the Agreement shall be unaffected by this Amendment and shall remain in full force and effect. In the event of conflict between the provisions of this Amendment and the provisions of the Agreement, this Amendment shall prevail.
IN WITNESS WHEREOF
, the Parties have executed this Amendment effective as of the Effective Date above.
BKEP Pipeline, LLC
, a Delaware limited
liability company
/s/ Mark Hurley
Title: CEO
Vitol, Inc.
, a Delaware Corporation
/s/ Sebastian Moretti
Title: Vice President - Operations
EXHIBIT B
STORAGE SERVICES
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BBL Increments
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Amendment No.
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Storage Fee (Per bbl)
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Effective Date
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Expiration Date
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Term Length (in months)
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2,215,000
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Second
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$***
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5/1/2015
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4/30/2017
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24
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2,215,000
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Third
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$***
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5/1/2017
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4/30/2018
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12
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