Pittsburgh-based producer of coal and gas, Consol Energy, has signed several coal deals totalling 10.8 million short t over a three-year period, the company has said in a press release.
Combined with 650 000 short t of additional commitments for 2016, these deals in increase Consol’s Pennsylvania Operations sold positions in 2016, 2017 and 2018 to 93%, 61% and 49% respectively.
“These agreements demonstrate than, even as markets continue to be challenged, customers are still incentivised to contract for term commitments to assure that they have a reliable supply of coal,” said Nicholas DeIuliis, President and CEO of Consol.
“The Pennsylvania Operations coal has a quality advantage due to its high British thermal units that not only optimised plant performance but also travels well to compete in non-traditional markets,” DeIuliis continued.
“Even as the domestic market for coal is in the midst of a permanent structural shift, we are capturing market share in the Upper Midwest, Ohio River Valley and southeastern US regions, which have traditionally been served by our competitors in the Central Appalachian and Illinois Basins.”
Consol now expects its Pennsylvania Operations to generate positive free cash flow in 2016, even with depressed natural gas prices. It also reaffirmed its previous estimated price range across the entire Coal Division for committed and priced short tons in 2016 of US$50 – 55/short t.
“From an operational standpoint, these deals effectively baseload our production,” said Jimmy Brock, CEO of CNX Coal Resources GP LLC, the master limited partnership formed by Consol to manage and develop its active thermal coal operations in Pennsylvania.
“When we can operate at these volumes, we have opportunities for improvements in unit costs as well. This demonstrates that our Pennsylvania mining complex is the premier coal complex in the US – even under the pressures of weak pricing and stiff regulatory challenges.”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/11122015/consol-signs-coal-deals-for-2016-through-2018-3279/