September 07, 2008

New coal import pier ready for Kinder Morgan

Daily Press reported that Kinder Morgan Energy Partners completed a USD 70 million expansion to its Pier IX coal terminal, including construction of a new pier that will be used primarily for handling coal imports. Kinder Morgan planned the expansion in 2006, at a time when the coal export business was on the tail end of a sharp decline.

Mr Joseph DeMatteo manager of Kinder Morgan said that the new dock, dubbed Pier X will allow the terminal to receive coal by barge or ship and increase its total throughput by about 3 million tonnes or about 30%.

Mr DeMatteo is confident the highly cyclical coal market will switch. And when it does, Pier X will be ready to act. He said that "We feel pretty good about it, because when the market does shift and it will we'll be sitting nicely.”

Coal shippers like Kinder Morgan and its adjacent competitor, Dominion Terminal Associates, laid plans to expand capabilities to handle imports, in part because of new federal environmental restrictions on power plants. But as worldwide demand for coal skyrocketed and the US dollar weakened against foreign currencies, the coal export market exploded, leaving the import market next to nonexistent. Analysts expect the hot export market to continue at least through the end of 2008, dampening the near term outlook for Kinder Morgan's new investment, which was set up primarily to capitalize on imports.

In 2009, Kinder Morgan expects to handle about 1 million tons of new import coal.