Peabody Energy (NYSE: BTU) and Kinder Morgan Energy Partners L.P. (NYSE:
KMP) today announced long-term agreements to secure and expand the Gulf
Coast export platform for Peabody's Colorado, Powder River Basin and
Illinois Basin coal products.
Under the multi-terminal agreements, Peabody would gain additional
access to export coal at Kinder Morgan's Deepwater Terminal and Houston
Bulk Terminal (HBT) near Houston, and its International Marine Terminal
(IMT) in Myrtle Grove, La., through 2021 and 2020, respectively. This
would increase Peabody's Gulf Coast export capacity to approximately 5
million – 7 million tons of coal per year between 2014 and 2020.
Peabody has also secured a rail service agreement with Union Pacific
Railroad (UPRR) to transport the company's Colorado coal to Kinder
Morgan's Houston terminals.
The agreements allow for throughput flexibility among Kinder Morgan's
Gulf Coast export terminals to serve Peabody's international customer
base. The additional capacity also supports the planned expansion of
Kinder Morgan's Gulf Coast coal handling facilities and Peabody's
development of the Sage Creek extension of the Twentymile Mine.
Kinder Morgan will invest, including previously announced projects,
approximately $400 million to expand its Gulf Coast terminal network.
After completion of all of the export expansion projects, Kinder
Morgan's Gulf Coast terminal network will have a coal export nameplate
capacity of approximately 27 million short tons per year.
"Peabody is securing a large-volume, sustainable U.S. export platform to
meet growing global seaborne coal demand," said Peabody Energy Chairman
and Chief Executive Officer Gregory H. Boyce. "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."
"We look forward to expanding our partnership with Peabody into new
markets," said Kinder Morgan Terminals President Jeff Armstrong. "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 has extended its existing contract with KMP's HBT and will begin
exporting Colorado and Powder River Basin coal products from the
Deepwater facility beginning in 2014. Peabody's Illinois Basin, Colorado
and Powder River Basin coal will be exported through KMP's expanded IMT
in New Orleans from 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 Gulf Coast export platform is one of a number of ways in which
Peabody accesses seaborne coal markets, including its global trading and
brokerage activities, export coal from its growing Australian thermal
and metallurgical coal position, export coal from its growing set of
Indonesia supply sources, interest in developing a major West Coast
export terminal, and ownership of a 38 percent interest in the DTA
terminal in Virginia.
Peabody Energy is the world's largest private-sector coal company and a
global leader in sustainable mining and clean coal solutions. The
company serves metallurgical and thermal coal customers in more than 25
countries on six continents. For further information, go to
PeabodyEnergy.com and CoalCanDoThat.com.
Kinder Morgan is the largest midstream and the fourth largest energy
company in North America with a combined enterprise value of over $90
billion. It owns an interest in or operates approximately 75,000 miles
of pipelines and 180 terminals. Its pipelines transport natural gas,
gasoline, crude oil, CO2 and other products, and its terminals store
petroleum products and chemicals and handle such products as ethanol,
coal, petroleum coke and steel. Kinder Morgan, Inc. (NYSE: KMI) owns the
general partner interest of Kinder Morgan Energy Partners, L.P. (NYSE:
KMP) and El Paso Pipeline Partners, L.P. (NYSE: EPB), along with limited
partner interests in KMP, Kinder Morgan Management, LLC (NYSE: KMR) and
EPB. For more information please visit www.kindermorgan.com.
Peabody Energy Forward Looking Statement
Certain statements in this press release are forward-looking as defined
in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on numerous assumptions that the
company believes are reasonable, but they are open to a wide range of
uncertainties and business risks that may cause actual results to differ
materially from expectations as of July 17, 2012. These factors are
difficult to accurately predict and may be beyond the company's control.
The company does not undertake to update its forward-looking statements.
Factors that could affect the company's results include, but are not
limited to: global demand for coal, including the seaborne thermal and
metallurgical coal markets; price volatility, particularly in
higher-margin products and in our trading and brokerage businesses;
impact alternative energy sources, including natural gas and renewable;
impact of weather and natural disasters on demand, production and
transportation; reductions and/or deferrals of purchases by major
customers and ability to renew sales contracts; credit and performance
risks associated with customers, suppliers, co-shippers, trading, banks
and other financial counterparties; geologic, equipment, permitting and
operational risks related to mining; transportation availability,
performance and costs; availability, timing of delivery and costs of key
supplies, capital equipment or commodities such as diesel fuel, steel,
explosives and tires; integration of the newly acquired Macarthur Coal
operations; successful implementation of business strategies;
negotiation of labor contracts, employee relations and workforce
availability; changes in postretirement benefit and pension obligations
and funding requirements; replacement and development of coal reserves;
access to capital and credit markets and availability and costs of
credit, margin capacity, surety bonds, letters of credit, and insurance;
effects of changes in interest rates and currency exchange rates
(primarily the Australian dollar); effects of acquisitions or
divestitures; economic strength and political stability of countries in
which we have operations or serve customers; legislation, regulations
and court decisions or other government actions, including new
environmental and mine safety requirements; changes in income tax
regulations or other regulatory taxes; litigation, including claims not
yet asserted; and other risks detailed in the company's reports filed
with the Securities and Exchange Commission (SEC).
Kinder Morgan Forward Looking Statement
This news release includes forward-looking statements. Although Kinder
Morgan believes that its expectations are based on reasonable
assumptions, it can give no assurance that such assumptions will
materialize. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein are
enumerated in Kinder Morgan's Forms 10-K and 10-Q as filed with the
Securities and Exchange Commission.