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Sunday, 29 January 2012

KMP upgrades coal handling

29/1/12: Kinder Morgan Energy Partners (KMP) is to invest approximately $140m expanding its coal handling facilities along the US Gulf Coast.

The expansion of these export facilities will be supported by a new long-term throughput agreement with Arch Coal.

The two companies are also in final discussions to include in the throughput agreement port space for coal shipments at KMP-owned facilities on the country's East Coast.

Upon completion of the proposed terminal upgrades and subject to certain rail service agreements, Arch will ship coal at guaranteed minimum volume levels through KMP-owned terminals.

The expansion of its export facilities will, KMP says, "provide incremental port capacity for Arch’s growing seaborne coal volumes".

"The demand for export coal continues to grow and we are pleased to offer Arch and other customers options in various markets through our multi-location terminal network,” says Jeff Armstrong, president of Kinder Morgan Terminals. 

“We are also extending existing long-term coal agreements with Arch at our upriver terminals (Cora, Cahokia and Kellogg) in Illinois.”

“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,” adds 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.”

Specific to the expansions on the Gulf Coast, KMP will install a new shiploader and a railcar loop track to handle three 135-wagon unit trains at its Deepwater terminal in Houston.

Following completion of the project, the Deepwater terminal will have a coal throughput capacity of 10m tpa.

The projects are expected to be immediately accretive to cash available to KMP unitholders upon completion, which is anticipated in the second quarter of 2014.

KMP’s Deepwater and East Coast facilities offer dual rail access from Class 1 railways, while the International Marine Terminal (IMT) provides barge access to the inland waterway system.

The Deepwater terminal will be capable of handling Panamax- and post-Panamax-size vessels, while one East Coast terminal and the IMT will be capable of handling cape-size vessels.


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