Arch Coal has exited its position in the Millennium Bulk project in Washington state, handling its 38% stake in the export terminal to majority owner Lighthouse Resources in exchange for long term throughput rights.
The deal, announced Thursday, gives Salt Lake City-based Lighthouse 100% ownership in the proposed terminal, located in Longview, Washington. The project is currently undergoing environmental review.
Arch will remain involved in the project's development, and will nominate a representative to serve on an advisory board to provide strategic counsel and support for the project, according to a statement from Lighthouse.
"As we carry the project forward to completion, we are pleased to work with Arch in its new role as customer and strategic adviser," said Lighthouse CEO Everett King in the statement.
The project is the last of several export terminals that were proposed for the US West Coast, largely to export Powder River Basin coal. The Panamax-capable terminal on the Columbia River would be able to export up to 44 million mt at full capacity, and would be served by both BNSF Railway and Union Pacific.
Plans for the proposed Gateway Pacific terminal, a roughly 48 million mt project on the Puget Sound near Bellingham recently ground to a halt after the US Army Corps of Engineers said it would be unable to permit the facility based on its finding that the project would impede on native fishing rights.
"Given the momentum Millennium has achieved and Arch's sharp focus on capital conservation at present, this is the right time for us to transition away from the role of co-developer and towards the long-envisioned role of future user," said Deck Slone, Arch's senior vice president and Millennium board member, according to the Lighthouse statement.
The Pacific market for thermal coal has been weak for several years, largely due to low demand and oversupply.
The price for FOB Kalimantan 5,000 kcal/kg GAR coal, which is roughly equivalent in heat content to PRB 8,800 Btu/lb coal, has been trading in the high $30s/mt for more than six months. The price had been as high as $89.50/mt in May 2011.
