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):
                       March 13, 2002 (February 28, 2002)


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




   Delaware                           0-15905                    73-1268729
  (State of                   (Commission File Number)         (IRS Employer
Incorporation)                                               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)




                                (Not Applicable)
          (Former name or former address, if changed since last report)




ITEM 5.  OTHER

         On February 28, 2002,  Blue Dolphin  Energy  Company  ("Blue  Dolphin")
issued a press release announcing that it acquired an additional 1/3 interest in
the Blue Dolphin Pipeline System (the "Additional Interest"), which it operates,
from  MCNIC  Pipeline  &  Processing  Company  ("MCNIC").  As a  result  of this
transaction  Blue  Dolphin  owns an 83%  interest in the Blue  Dolphin  Pipeline
System.  The Blue  Dolphin  Pipeline  System  is a  natural  gas and  condensate
gathering  pipeline with related shore facilities  servicing the Galveston Area,
offshore  Texas,  with  transportation  capacity  of 160 Mmcf/d and 7,000 Bpd of
condensate.  Present  throughput  is  approximately  20  Mmcf/d  and  100 Bpd of
condensate.  The line extends from Galveston Block 288 to its onshore facilities
in Freeport, Texas.

Pursuant to the terms of the purchase and sales  agreement,  Blue Dolphin issued
MCNIC a $750,000 promissory note that matures on December 31, 2006. Blue Dolphin
will make monthly payments equal to 90% of the net revenues  attributable to the
Additional Interest.  The note bears interest at the rate of 6% per annum and is
secured by the Additional  Interest.  Additionally,  if the  promissory  note is
retired  before its  maturity  date,  Blue  Dolphin  has  agreed to make  annual
payments to MCNIC of up to $750,000 plus the amount of interest which would have
accrued on $750,000 if interest had accrued  thereon from January 1, 2002 at the
rate  of 6%,  out of 50% of the  net  revenues  attributable  to the  Additional
Interest.  These  contingent  payments would begin when the  promissory  note is
retired and end on December 31, 2006.



ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS

         (a)      Exhibits

         99.2     Press Release issued February 28, 2002







                                       2



                                    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:    March 13, 2002


                                                     BLUE DOLPHIN ENERGY COMPANY


                                                      /s/ G. Brian Lloyd
                                                     ---------------------------
                                                     G. Brian Lloyd
                                                     Vice President, Treasurer



                                       3



                                INDEX TO EXHIBITS



EXHIBIT           DESCRIPTION OF EXHIBIT
- -------           ----------------------

99.2              Press Release issued February 28, 2002















                                       4

EX-99.2

EXHIBIT 99.2

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

FOR IMMEDIATE RELEASE                                          February 28, 2002


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

     BLUE DOLPHIN INCREASES ITS INTEREST IN THE BLUE DOLPHIN PIPELINE SYSTEM

Blue  Dolphin  Energy  Company  announced  that it  acquired an  additional  1/3
interest in the Blue Dolphin  Pipeline  System,  which it  operates,  from MCNIC
Pipeline & Processing Company  ("MCNIC"),  a business unit of DTE Energy Company
(NYSE:  DTE). As a result of this transaction Blue Dolphin holds an 83% interest
in the Blue Dolphin Pipeline System.

The Blue  Dolphin  Pipeline  System  is a natural  gas and  condensate-gathering
pipeline with related shore  facilities  servicing the Galveston Area,  offshore
Texas, with  transportation  capacity of 160 Mmcf/d and 7,000 Bpd of condensate.
Present  throughput is  approximately  20 Mmcf/d and 100 Bpd of condensate.  The
line extends from  Galveston  Block 288 to its onshore  facilities  in Freeport,
Texas.

Blue Dolphin Energy Company is engaged in the acquisition and exploration of oil
and gas  properties,  and the  gathering and  transportation  of natural gas and
condensate.  In addition,  the Company actively pursues midstream  projects with
long-term  revenue  potential such as the Sabine Seaport and Petroport  offshore
oil terminal  projects,  the New Avoca natural gas storage project and Drillmar,
Inc. and its  deepwater  semi-tender  assisted  drilling  and well  intervention
solution.  Questions should be directed to Haavard Strommen, Manager of Finance,
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.