The move represents a growing shift by coal producers to expand their export presence in the Gulf of Mexico as resistance to Pacific port development and backed-up traffic in Atlantic coast terminals inhibits more ideal export locations.
Under the multi-terminal agreement, Peabody will gain additional access to Kinder Morgan’s deepwater and Houston bulk terminals near Houston and its international marine terminal in Louisiana through 2021 and 2020, respectively.
Coal will be shipped in from Peabody operations in Colorado, the Powder River Basin and the Illinois Basin.
Peabody chairman and chief executive Gregory Boyce said securing a large-volume US export platform was necessary to meet the growing global seaborne demand for coal.
“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 for our competitive and reliable coal products,” he said.
The deal coincides with an expected extension of Peabody’s Twentymile coal mine in Colorado and Kinder Morgan’s $US400 million expansion plan for the Gulf area.
Kinder Morgan aims to increase its Gulf Coast terminal network coal exporting capacity to 27Mtpa.
“We look forward to expanding our partnership with Peabody into new markets,” Kinder Morgan Terminals president Jeff Armstrong said.
“Export coal demand continues to grow around the country and Kinder Morgan is well positioned with our network of terminals to serve our customers’ needs in multiple locations.”
Peabody coal will be exported through the international marine terminal in New Orleans as of 2014.