Cloud Peak Energy Logistics (CPEL) has signed an export sales agreement to supply coal to two new integrated coal gasification combined cycle (IGCC) power plants in Japan.
Under the agreement signed with Singapore-based JERA Trading, Cloud Peak Energy will supply coal from its Spring Creek Mine in Montana.
BNSF Railway will transport coal to Westshore Terminals at Roberts Bank in Vancouver, where it will be loaded onto ocean-going vessels for delivery to the Japanese power plants in Fukushima Prefecture.
Shipments of coal are expected to start as early as the end of 2019 and will continue for a period of between 30 and 40 months.
The delivery of coal is expected to reach one million metric tonnes in the final contract year.
Cloud Peak Energy president and CEO Colin Marshall said: “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.
“If similar plants were to be built in the US, it would go a long way to addressing concerns about CO2 emissions while providing low-cost reliable electricity.”
JERA Trading managing director Ronan Lory said: “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.”
The first new IGCC plant is expected to start operating from September 2020.