Some Powder River Basin coal will go to customers overseas through Gulf Coast and possibly East Coast ports, under the terms of a recently signed deal and another deal in negotiation.
St. Louis-based Arch Coal, owner of a number of Powder River Basin coal mines, signed a deal with Kinder Morgan Energy Partners LP to ship coal from the company's mines to customers in Europe and elsewhere from the Gulf Coast, the company said in its annual report released Friday.
Arch is also negotiating a deal to ship coal from Kinder Morgan's East Coast facilities.
"This strategic partnership with Kinder Morgan, a company with a proven track record of running successful terminal operations, will allow Arch to significantly increase our participation in the global coal market," said John W. Eaves, Arch's president and chief operating officer. "This dedicated capacity directly underpins our long-term strategy to grow Arch's coal exports by fourfold in the next decade, and is consistent with our view that a global coal supply shortfall will persist over that time frame."
Arch is pushing forward with expanded sales overseas, inking deals with West Coast ports in the U.S. and Canada and opening offices in London and Singapore.
The company plans to ship coal from the Powder River Basin and mines in Appalachia and elsewhere in the U.S., the company said in a press release.
Kinder Morgan will spend $140 million to upgrade its Gulf Coast facilities, including a new shiploader and railcar loop track to handle 135-car trains at its deepwater terminal in Houston. The improvements will boost that port's coal shipment ability to 10 million tons of coal per year.
"The demand for export coal continues to grow and we are pleased to offer Arch and other customers options in various markets through our multilocation terminal network," said Jeff Armstrong, president of Kinder Morgan Terminals.
Arch Coal, through a wholly owned subsidiary, is the owner of the Black Thunder and Coal Creek mines in the Powder River Basin in Wyoming. In 2010, those mines produced 127.6 million tons of coal, with the Black Thunder mine topping all other mines in the basin for production.