Cloud Peak Energy Signs Long-Term Coal Export Agreement with JERA Trading to Supply New Japanese Power Plant
Cloud Peak Energy announced today that its wholly-owned subsidiary, Cloud Peak Energy Logistics (“CPEL”), has entered into a term coal export sales agreement with JERA Trading Pte Ltd. (“JERAT”), which is a trading company based in Singapore (http://jeratrading.com/).
Shipments are expected to commence as early as the end of 2019 and continue for a period of between thirty and forty months, reaching up to one million metric tonnes in the final contract year.
Coal produced at Cloud Peak Energy’s Spring Creek Mine, located near Decker, Montana, will be carried by the BNSF Railway to Westshore Terminals at Roberts Bank, Vancouver, for loading onto ocean-going vessels for subsequent delivery to two new state-of-the-art Integrated coal Gasification Combined Cycle (“IGCC”) coal-fired power plants in Fukushima Prefecture, Japan. The two 540-megawatt IGCC plants are being developed by Mitsubishi Corporation Power Ltd., along with Mitsubishi Heavy Industries, Ltd., Mitsubishi Electric Corporation, Tokyo Electric Power Company Holdings, Incorporated and Joban Joint Power Co., Ltd. IGCC systems generate power using a combined cycle format incorporating coal gasification and both gas and steam turbines. IGCC systems offer enhanced generation efficiency, as well as reductions in carbon dioxide (CO2) emissions of about 15% in comparison with the latest, state-of-the-art, conventional coal-fired power plant designs and substantially lower than most plants in operation in the United States. The first new IGCC plant is scheduled to commence operation in September 2020.
“Cloud Peak Energy is pleased to be part of the Fukushima IGCC project and to help support Japan’s investment in next generation coal technology,” said Colin Marshall, Cloud Peak Energy’s President and CEO. “If similar plants were to be built in the U.S. it would go a long way to addressing concerns about CO2 emissions while providing low cost reliable electricity. Today’s announcement also demonstrates the strategic importance of American energy resources to key Asian allies.”
Ronan Lory, JERA Trading Managing Director, indicated that “JERA Trading is glad to have secured a long-term coal sourcing agreement with Cloud Peak Energy, it demonstrates that North America remains a key supplier of quality coal for exports and vindicates our decision to set up our new subsidiary JERA Trading North America, LLC.”