EXHIBIT 99.1


PRESS RELEASE

FOR IMMEDIATE RELEASE
August 29, 2007

BLUE DOLPHIN ENERGY COMPANY  SUBSIDIARY ENTERS INTO NEW PIPELINE  TRANSPORTATION
AGREEMENT

Houston,  August 29 / PRNewswire / -- Blue Dolphin Energy Company  (NASDAQ:BDCO)
("Blue Dolphin"), an independent oil and gas company with operations in the Gulf
of Mexico, today announced that its wholly-owned  subsidiary,  Blue Dolphin Pipe
Line Company,  has  contracted  with a new shipper to provide gas and condensate
transportation  services for the shipper's  production to be delivered  into the
Galveston  Area Block 350 Pipeline.  The  production  will be delivered into the
pipeline  in  Galveston  Area  Block 350.  The  Company  expects  transportation
services for this shipper to commence during the third quarter 2007.  Throughput
volumes are not yet known.  Blue Dolphin Pipe Line Company owns an 83% undivided
interest in the Galveston Area Block 350 Pipeline.

Blue Dolphin  Energy Company is engaged in the gathering and  transportation  of
natural  gas  and  condensate  and  production  of  oil  and  gas.  For  further
information visit the Company's website at http://www.blue-dolphin.com.

Contact:
Gregory W. Starks
Vice President and Treasurer
713-227-7660

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.

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