BLUE DOLPHIN ENERGY COMPANY




                                                                    EXHIBIT 99.1
                                  NEWS RELEASE
FOR IMMEDIATE RELEASE                                           November 1, 2004

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

BLUE DOLPHIN ENERGY ANNOUNCES THE SALE OF NEW AVOCA GAS STORAGE

Blue Dolphin  Energy  Company (the  "Company")  announced  today that it and WBI
Pipeline & Storage Group,  Inc.  ("WBI")  consummated  the sale of New Avoca Gas
Storage, LLC ("New Avoca").  The Company,  holding a 25% equity interest in, and
the manager of, New Avoca,  and WBI, holding a 75% equity interest in New Avoca,
sold all of their interests in New Avoca to SemGas,  L.P., a business segment of
SemGroup, L.P.

Pursuant  to the terms of the  Purchase  and Sales  Agreement,  SemGas  paid the
Company $.9 million net to its 25% interest plus a future payment of $.4 million
net to its 25% interest,  subject to the  commencement of commercial  operations
from a storage  cavern at the New Avoca  natural gas storage  facility  prior to
October 29, 2011. New Avoca was formed to develop a natural gas storage facility
in Avoca, New York.

The Company  expects to use the proceeds from this sale for working  capital and
general corporate purposes. The Company now believes that the proceeds from this
transaction will satisfy its working capital requirements through second quarter
of 2005.

Certain of the  statements  included  in this  press  release,  which  express a
belief,  expectation  or  intention,  as well as those  regarding  the Company's
working  capital   requirements,   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.

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 Brian  Lloyd,  Vice  President,
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.