Feb24,2011, 12:24 P.M.ETBy Matt Jarzemsky, Dow Jones Newswires
Kinder Morgan Energy Partners LP (KMP) has agreed to handle up to 6 million tons of Massey Energy Co. (MEE) coal a year through a Louisiana terminal.
Kinder Morgan Chief Executive Richard Kinder said in January that the company was seeking to expand storage capacity at its terminals business to take advantage of increasing demand for coal exports. U.S. coal producers are particularly well-positioned to take advantage of brisk Asian demand for the high-grade coal used in steelmaking, as Australian flooding has disrupted global supplies.
Kinder Morgan anticipates handling a minimum 4 million tons annually over the course of the 15-year deal. The coal will be offloaded at its IMT terminal in Myrtle Grove before being stored and loaded onto ocean vessels. It plans to spend $70 million expanding the facility.
Massey has struggled with losses since the disaster last April that killed 29 workers at its Upper Big Branch mine, suffering production shortfalls, higher costs and feuds with regulators. Late last month, the company agreed to sell itself to Alpha Natural Resources Inc. (ANR) in a cash-and-stock deal valued at roughly $7 billion.
Kinder Morgan, meanwhile, has reported improved results of late. Tuesday, Moody's Investors Service raised its outlook on the company, which is best known for its pipeline operations.
Kinder Morgan shares recently traded at $72.68, up 1.1%, while Massey was up 6 cents at $62.70.
Kinder Morgan Chief Executive Richard Kinder said in January that the company was seeking to expand storage capacity at its terminals business to take advantage of increasing demand for coal exports. U.S. coal producers are particularly well-positioned to take advantage of brisk Asian demand for the high-grade coal used in steelmaking, as Australian flooding has disrupted global supplies.
Kinder Morgan anticipates handling a minimum 4 million tons annually over the course of the 15-year deal. The coal will be offloaded at its IMT terminal in Myrtle Grove before being stored and loaded onto ocean vessels. It plans to spend $70 million expanding the facility.
Massey has struggled with losses since the disaster last April that killed 29 workers at its Upper Big Branch mine, suffering production shortfalls, higher costs and feuds with regulators. Late last month, the company agreed to sell itself to Alpha Natural Resources Inc. (ANR) in a cash-and-stock deal valued at roughly $7 billion.
Kinder Morgan, meanwhile, has reported improved results of late. Tuesday, Moody's Investors Service raised its outlook on the company, which is best known for its pipeline operations.
Kinder Morgan shares recently traded at $72.68, up 1.1%, while Massey was up 6 cents at $62.70.
Tags:high grade coking coal, steelmaking, steel mills, raw material, Alpha Natural Resources, cash-and-stock deal,
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