Coal Age

JUN 2013

Coal Age Magazine - For more than 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.

Issue link:

Contents of this Issue


Page 16 of 67

news continued up to 3.5 million tons of high-sulfur coal annually once in peak production. Initial mining is expected in 2015. Meritage Midstream & Arch Coal to Form Joint Venture Meritage Midstream Services II and Arch Coal will create a joint venture, the Black Thunder Terminal LLC, and will develop a rail terminal to provide crude oil handling, storage, rail loading and marketing services to producers in Wyoming's Powder River Basin (PRB) and downstream refiners. Arch Coal will contribute reclaimed land, rail switching and loop, and other existing infrastructure assets at its Black Thunder mining complex in Campbell County, Wyo. Meritage will contribute capital and will build and operate the crude oil terminal on property east of Arch's active operations and located near the basin's crude oil production activity. Meritage will own the majority interest in Black Thunder Terminal. Because much of the required rail infrastructure is already in place, early stage crude oil transloading operations from inbound trucks to outbound trains are expected to begin at Black Thunder as early as September 2013. As demand from producers and refiners warrants, the Black Thunder Terminal will have the ability to increase outbound shipping capacity from 10,000 barrels per day in the initial phase to 120,000 barrels of crude oil per day via outbound unit train. Significant acreage is available for further expansions. The terminal will be served by BNSF Railway Co. "With an ideal land position and significant infrastructure already in place at its Black Thunder mine, Arch is the perfect partner for Meritage on this project," said Meritage Midstream Chairman and CEO Steve Huckaby. "This joint venture will provide crude oil producers in the PRB with the optionality they need to bring their products to multiple markets." "This joint venture will allow us to further optimize our assets and unlock the value of our existing infrastructure without any impact to our coal loading operations," said Paul A. Lang, executive vice president and COO, Arch Coal. The U.S. Geological Survey estimates that the PRB contains approximately 1 billion barrels of remaining recoverable oil. "New drilling technologies are being applied to legacy oil fields in the PRB, allowing operators to expand their drilling programs," Huckaby said. "Approximately 25 rigs are operating in the region, more than 430 horizontal drilling permits were issued in the PRB in 2012, and 222 have been issued thus far in 2013. What the basin lacks is sufficient pipeline and rail infrastructure at the right location to move crude oil and condensate to the highest value markets." The proposed joint venture between Arch Coal and Meritage is subject to customary approvals, which the companies expect to receive in three to six months. Oxford Works Toward Resolution with Lenders As it entered June, Ohio steam coal producer Oxford Resource Partners expected to finally reach a "comprehensive resolution" with lenders within weeks to amend and extend an existing credit facility scheduled to mature in July. PBS Coals Begins New Mine Project At the end of March, RoxCoal, a sister company of PBS Coals, began the long process of site preparation to open a new underground mine. The A Seam mine in Somerset County is located near the intersection of the Garrett Shortcut and Mud Pike in both Brothersvalley and Black townships. "I am excited about the potential of the new A Seam mine. The coal has a low sulfur content and the coal seam is 6 to 8 ft thick," said Roger Dean, vice president of underground mine operations. The work to get the mine into production will take about a year and represent an investment of approximately $15 million. The A Seam mine will take the place of the Kimberly Run mine, which will reach the end of its production within a year. The permit for the new mine covers 3,174 acres and is estimated to have a life expectancy of five to seven years at a production level of 2 million raw tons a year. The initial operation will employ 30 to 50 miners and in full production, a total of 150 or more will be working there. These positions will be filled mostly by miners transferred from the Kimberly Run operation. The coal from the new mine will be metallurgical coal used to make coke for the steel industry. Much of the coal will be transported by rail to the ports of Baltimore and Norfolk to be exported to steel manufacturers worldwide. June 2013 PBS Coals employees review plans for the new A Seam mine as equipment in the background prepares the site. From the left: Matt Ashley, mining engineer; Roger Dean, vice president of underground mining; and John Weir, land manager. 15

Articles in this issue

Links on this page

Archives of this issue

view archives of Coal Age - JUN 2013