Peabody/Kinder Deal to Expand Capacity to Export Coal Through Gulf

Peabody Energy and Kinder Morgan Energy Partners announced long-term agreements to expand the Gulf Coast export platform for Peabody's Colorado, Powder River Basin and Illinois Basin coal products, they said. The deal gives Peabody additional access to Kinder Morgan's Deepwater Terminal and Houston Bulk Terminal (HBT) near Houston, and its International Marine Terminal (IMT) in Myrtle Grove, La., to export coal, increasing Peabody's Gulf Coast export capacity to about 5-7 million tons of coal per year between 2014 and 2020. Peabody said it also secured a rail service agreement with Union Pacific Railroad to transport the company's Colorado coal to Kinder Morgan's Houston terminals. Kinder Morgan will invest, including previously announced projects, about $400 million to expand its Gulf Coast terminal network. Peabody's Illinois Basin, Colorado and Powder River Basin coal will be exported through KMP's expanded IMT in New Orleans beginning in 2014. An existing agreement at the Cora river terminal in Illinois will be extended through 2018 to facilitate exports through IMT.