8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 8-K


                                 CURRENT REPORT


                       PURSUANT TO SECTION 13 OR 15(D) OF
                     THE SECURITIES AND EXCHANGE ACT OF 1934

 Date of Report: (Date of earliest event reported): May 1, 2006 (April 28, 2006)


                           Blue Dolphin Energy Company
             (Exact name of registrant as specified in its charter)



         Delaware                      0-15905                   73-1268729
(State of Incorporation)       (Commission file Number)        (IRS Employer
                                                             Identification No.)

                             801 Travis, Suite 2100
                              Houston, Texas 77002
              (Address of Registrant's principal executive offices)

                                 (713) 227-7660
              (Registrant's telephone number, including area code)



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:

|_|  Written communication 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))



ITEM 1.01         ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

     On April 28, 2006, Blue Dolphin Energy Company (the "Company") entered into
a Stock Purchase  Agreement (the "Purchase  Agreement")  with certain  investors
named therein (the "Investors") for the private placement of 400,000 shares (the
"Shares") of the Company's common stock, par value $.01 per share, at a purchase
price of $4.90 per share (the "Purchase Price") for an aggregate  offering price
of  $1,960,000  (the  "Offering").  The net  proceeds to the  Company  after the
payment of  commissions  and expenses will be  approximately  $1,800,000 and the
Company  expects to use such  proceeds  for  possible  acquisitions  and planned
expansions  of our  facilities,  as well as working  capital  needs and  general
corporate purposes.  Additionally,  in connection with the Offering, the Company
is required to issue warrants (the  "Warrants") to purchase 24,000 shares of the
Company's  common stock  pursuant to the terms and  conditions  of the Placement
Agency Agreement  between Starlight  Investments,  LLC and the Company dated May
27, 2005. The Warrants vest immediately upon issuance and the exercise price per
share  varies  based on the  following  conditions:  (i)  until the later of the
registration  of the  Warrants  or one year  from the  issue  date,  110% of the
Purchase Price,  (ii) from the later of (x) the registration of the Warrants and
(y) one year,  until two years from the issue date,  120% of the Purchase  Price
and (iii) after the expiration of two years from the issue date of the Warrants,
130% of the Purchase Price.

     The Shares and the  Warrants  were issued  without  registration  under the
Securities  Act of 1933, as amended (the "Act") in reliance upon the  exemptions
from registration provided by Section 4(2) of the Act and Rule 506 of Regulation
D promulgated  thereunder.  However,  the Shares and the Warrants are subject to
certain registration rights as set forth in the Purchase Agreement,  whereby the
Company agreed to file a registration statement with the Securities and Exchange
Commission no later than May 15, 2006 for the purpose of registering  the Shares
and the Warrants.




ITEM 3.02         UNREGISTERED SALES OF EQUITY SECURITIES

     The  information  disclosed  under Item 1.01 of this Current Report on Form
8-K with  respect  to the  Company's  issuance  of the  Shares  pursuant  to the
Purchase Agreement is incorporated into this Item 3.02 in its entirety.


ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS

          (c)  Exhibits

               99.1 Press Release dated April 28, 2006.






                                    SIGNATURE



     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

Date:   May 1, 2006.

                                                    BLUE DOLPHIN ENERGY COMPANY


                                                     /s/ Gregory W. Starks
                                                    ----------------------------
                                                    Gregory W. Starks, Treasurer
















                                INDEX TO EXHIBITS


Exhibit   Description of Exhibit
- -------   ----------------------

99.1      Press Release dated April 28, 2006.

EX-99.1

                                  EXHIBIT 99.1

                                  NEWS RELEASE
                                  ------------

FOR IMMEDIATE RELEASE                                             April 28, 2006

Houston, Texas - Blue Dolphin Energy Company (NASDAQ SmallCap Symbol: BDCO)

BLUE DOLPHIN ENERGY ANNOUNCES DEFINITIVE AGREEMENT FOR  PRIVATE PLACEMENT

Blue Dolphin  Energy  Company  announced  today that it has entered into a stock
purchase  agreement  with an accredited  institutional  investor for the private
placement of 400,000 shares of the company's common stock at a purchase price of
$4.90 per share which is 80% of the volume weighted  average price for the prior
twenty days.  The closing is expected to occur today.  The net proceeds from the
offering  after the  payment of  commissions  and  expenses  are  expected to be
approximately  $1,800,000.  The Company expects to use the proceeds for possible
acquisitions  and planned  expansions of its facilities,  as well as for working
capital needs and general corporate  purposes.  In addition,  in connection with
the terms of a Placement  Agency  Agreement  between  the Company and  Starlight
Investments,  LLC dated May 27, 2005, and Lane Capital Markets, LLC, the Company
will issue  warrants to purchase an aggregate of 24,000  shares of common stock.
The warrants vest  immediately  upon  issuance and the exercise  price per share
varies  based  on  the  following  conditions:   (i)  until  the  later  of  the
registration  of the  warrants  or one year  from the  issue  date,  110% of the
purchase  price  per  share in the  offering,  (ii)  from  the  later of (x) the
registration  of the warrants  and (y) one year,  until two years from the issue
date,  120% of the purchase  price per share in the offering and (iii) after the
expiration  of two  years  from  the  issue  date of the  warrants,  130% of the
purchase price per share in the offering.

The shares of common stock and the  warrants  were issued  without  registration
under the  Securities  Act of 1933,  as amended (the "Act") in reliance upon the
exemptions from registration provided by Section 4(2) of the Act and Rule 506 of
Regulation D promulgated thereunder. However, the shares of common stock and the
warrants  are subject to certain  registration  rights as set forth in the Stock
Purchase Agreement,  whereby the Company agreed to file a registration statement
with the Securities  and Exchange  Commission no later than May 15, 2006 for the
purpose of registering the Shares for resale.

Blue Dolphin  Energy Company is engaged in the gathering and  transportation  of
natural gas and  condensate,  and the production and  development of oil and gas
properties. Questions should be directed to Gregory W. Starks, Treasurer, at the
Company's offices in Houston, Texas,  713-227-7660.  For further information see
our Home Page at http://www.blue-dolphin.com.

Certain of the  statements  included  in this  press  release,  which  express a
belief,  expectation or intention,  as well as those regarding  future financial
performance or results, or which are not historical facts, are "forward-looking"
statements as that term is defined in the Securities Act of 1933, as amended and
the Securities  Exchange Act of 1934, as amended.  The words  "expect",  "plan",
"believe",  "anticipate",  "project",  "estimate",  and similar  expressions are
intended  to  identify   forward-looking   statements.   These   forward-looking
statements  are  not  guarantees  of  future  performance  or  events  and  such
statements involve a number of risks,  uncertainties and assumptions,  including
but not limited to  industry  conditions,  prices of crude oil and natural  gas,
regulatory changes,  general economic conditions,  interest rates,  competition,
and  other  factors.  Should  one  or  more  of  these  risks  or  uncertainties
materialize or should the underlying assumptions prove incorrect, actual results
and outcomes may differ  materially from those indicated in the  forward-looking
statements.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking statements,  which speak only as of the date hereof. The Company
undertakes  no  obligation to republish  revised  forward-looking  statements to
reflect  events  or  circumstances  after  the date  hereof  or to  reflect  the
occurrence of unanticipated events.