The company is expecting to increase its export capacity to 5 million to 7 million tons of coal every year between 2014 and 2020 by accessing the seaborne coal markets through the Gulf Coast export platform.
Peabody Energy chairman and chief executive officer Gregory H Boyce said the company is securing a large-volume, sustainable US export platform to meet growing global seaborne coal demand.
"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," Boyce said.
KMP will invest about $400m to expand its Gulf Coast terminal network and enhance its coal export nameplate capacity to about 27 million short tons per year.
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 has extended its contract with Kinder Morgan’s HBT and will access the Deepwater facility to export Colorado and Powder River Basin coal products from 2014.
The company will also export the Illinois Basin, Colorado and Powder River Basin coal from KMP’s expanded IMT from 2014 and extend its agreement at the Cora river terminal till 2018.
The company secured a rail service agreement with Union Pacific Railroad to transport the Colorado coal to the KMP’s Houston terminals.
Peabody is a coal company and Kinder Morgan is a midstream company.
