Peabody and Kinder Morgan In Deal To Expand Coal Exports

ST. LOUIS – Peabody Energy hopes to expand its coal exports by as much as 7 million tons per year between 2014 and 2020 through long-term deals with Kinder Morgan Energy Partners.

Terms of the deal give Peabody access to Kinder Morgan’s Gulf Coast transport terminals, including the Deepwater Terminal and Houston Bulk Terminal, both near Huston, through 2021 and the International Marine Terminal neat Myrtle Grove, La., through 2020.

The deals will require Kinder Morgan to invest $400 million to expand its Gulf Coast Terminal network. The terminals store coal transported in by train and have facilities that can dock it on seafaring transport vessels. Peabody has also secured a rail service agreement with Union Pacific Railroad to transport the company’s Colorado coal to Kinder Morgan’s Houston terminals.

The deal with Kinder Morgan comes at a time when U.S. demand for coal is falling, but the global market continues to grow. Altogether, Peabody has customers for both thermal and metallurgical coal in 25 countries across six continents. In 2011 Peabody sold about 204 million tons of coal produced in its U.S. mines.


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