Coal Age Magazine - For nearly 100 years, Coal Age has been the magazine that readers can trust for guidance and insight on this important industry.
Issue link: https://coal.epubxp.com/i/138480
transport tips Shipping PRB Coal to Asia Now BY DAVE GAMBREL Subbituminous steam coal markets in Asia are growing, particularly in China and India. By the year 2015, Indian coal imports are expected to double over 2010 levels; Chinese imports are expected to increase 133% over the same period. However, it is not an automatic sale, where buyers are simply waiting for coal to purchase. They are price buyers, and there is competition. When we talk about these markets, we need to know a few basic things. Chinese coal is produced in northeastern China, and is railed to the coast. It has to be shipped southward along the Chinese coast to power plants further south. Sometimes they can buy imported coal cheaper than their own, especially in the extreme south. For Chinese buyers coal produced abroad (not in China) starts becoming competitive south of Shanghai, where the delivered cost of Chinese coal becomes greater as the distance from their northern coal piers increases. In India, one of the major developing markets for steam coal is the massive power plants in the northwest, near Mundra. Vizag (aka Visakhapatnam) on the northeast coast of India imports large quantities of both steam and metallurgical coal. In the last few years, domestic markets have been heavily impacted by wind generation, natural gas, Maximum Achievable Control Technology (MACT) Standards, and a lackluster economy. Powder River Basin (PRB) coal producers have seen their domestic markets decline and are vitally interested in growing export markets. They have not been totally successful in finding adequate coal terminals or building new ones. The producers that have been successful in finding West Coast export terminals have found limited additional throughput capacity at Roberts Bank, B.C., and at Prince Rupert, B.C. PRB coal producers need routes to Asia now, not when proposed coal terminals finally make it through the federal/environmental gauntlet years from now, if ever. Terminals are not the only problem. Adequate railroad infrastructure for high volumes of heavy unit trains is questionable. BNSF, the only PRB railroad with access to Washington's proposed terminals, crosses the state with three main lines. According to a former BNSF railroader, the most direct route may not be adequate for heavy coal trains. In fact, it may not be possible to make it adequate because of its 2.2% grade and dangerous location, even if BNSF should decide to rebuild it. The other two routes have their own problems. There is an alternative for PRB coal producers that want to start shipping to Asian markets now. It is not ideal, but it will work now. The ideal solution will not. The Midwestern Rail Connection Billions of dollars have been spent building and maintaining the railroad connections to the Midwest and South. The rail system consists of thousands of miles of well-maintained track on two competing railroad systems, the Union Pacific and BNSF. Such a system does not yet exist in Washington. Right now a coal producer can ship PRB coal to numerous coal terminals on the Gulf Coast and the inland waterways, and can do so without objection. PRB coal producers are not idly hoping the proposed Cherry Point and Columbia River coal terminals will happen, or that additional capacity will open up at Canadian coal terminals. 32 www.coalage.com They have taken backstop positions at other coal terminals along the Mississippi River and Texas coast. Peabody Energy has made agreements with Kinder Morgan to use its Deepwater and Houston Bulk Terminals in Texas, as well as increased access to its International Marine Terminal in the Lower Mississippi River. Arch Coal has a long-term throughput agreement with Kinder Morgan that supports expansion of their Gulf Coast export facilities. Ambre Energy has increased its potential export capacity through the Gulf of Mexico by securing a lease at the Port of Corpus Christi in Texas. Ambre has an option for 30-year tenure on the lease and can develop a storage site to receive and ship coal through the port's joint facilities. Unit coal trains from the PRB sometimes have as many as 135 cars carrying 120 tons each, or 16,200 tons per train. Typical trains consist of 120 cars carrying 120 tons each, or about 14,400 tons per train. The cars are usually aluminum rotary dump gondolas capable of being dumped at a rotary dumper without being detached from the train. Union Pacific is the main railroad now serving Cora and Cook Coal terminals. The rail distance to these terminals is about 1,000 miles. The most likely river terminals at which barges may be loaded are Cora Coal Terminal in Cora, Ill., and Cook Coal Terminal near Metropolis, Ill. The advantage offered by the Cora and Cook terminals is that they are both remote from population centers, have large available stockpile areas, can handle multiple unit trains without blocking highways, can unload unit trains quickly, and are served by both railroads. At normal river levels, barges headed down the Lower Mississippi River will be loaded to 10 or 11 ft of draft. River barges on the loaded to 10 ft draft typically carry about 1,800 tons each. Cook is 930.5 miles and Cora is 995.5 miles from IMT Terminal; United Bulk terminal is 1.5 miles further south on the east of the river. A south-bound tow headed for an Map of the Lower Mississippi River and Tenn-Tom export terminal will Water-way. The Lower Mississippi extends from 0 UM typically consist of to the bottom of the map, left side of map. (Courtesy 25-40 barges, or of AEP River Operations) about 45,000-72,000 June 2013