US coal producer Peabody Energy has signed a long-term deal to export Colorado, Powder River and Illinois Basin coals from three Gulf Coast terminals owned by Kinder Morgan Energy Partners, the companies said Tuesday.
"Peabody is securing a large-volume, sustainable US export platform to meet growing global seaborne coal demand," Peabody Energy Chairman and CEO Gregory Boyce said in a statement. "These new throughput agreements further strengthen Peabody's ongoing partnership with Kinder Morgan as we continue to expand our long-term Gulf Coast capacity in line with emerging export opportunities."
The agreement gives the St. Louis-based Peabody additional access to Kinder Morgan's Deepwater Terminal and the Houston Bulk Terminal as well as the International Marine Terminal in Myrtle Grove, Louisiana, through 2021 and 2020 respectively.
Peabody which already has an existing contract with Kinder Morgan's HBT will begin exporting Colorado and PRB coal from Deepwater in 2014. The new agreement boosts Peabody's Gulf Coast export capacity to about 5 million to 7 million st/year year between 2014 and 2020. Peabody also said it secured a rail service agreement with Union Pacific to transport its Colorado coal to Kinder Morgan's Houston terminals.
Peabody's Illinois Basin, Colorado and Powder River Basin coal will also be exported through KMP's expanded IMT in 2014. An existing agreement at the Cora River terminal in Illinois will be extended through 2018 to facilitate exports through IMT as well as domestic sales, the companies said.
Kinder Morgan spending about $400 million to expand its Gulf Coast coal export terminals to serve what is expected to be increasing demand from China, India and Europe