Together, the companies will examine alternative method of developing a transportation option out of the area.
The project work will also include reactivating Silverado’s existing pipeline, which is 200 miles long and 10in and 12in wide. The pipeline is expected to add necessary crude oil storage and provide connectivity to the Houston market.
Blueknight Energy Partners chief executive officer Mark Hurley said the Longview area of Texas is fast becoming an active oil hub but has limited connectivity and capacity to reach the Houston market.
"With existing production as well as the significant development projected in the East Texas area, this pipeline will provide a more efficient means of transporting crude oil to the Gulf Coast," Hurley added.
Blueknight and Silverado are planning to set up a joint venture to manage the pipeline reactivation only after they secure commitments from shippers.
Blueknight will operate the pipeline under a long-term agreement with Silverado.
The project is named Silver Eagle pipeline and is expected to take almost a year to become operational.
