Coal and natural gas company CONSOL Energy Inc. made its first sale of high-volume coking coal to Asia from its Bailey Mine in Northern Appalachia. The sale was made by Xcoal, the exclusive representative of CONSOL in Asia, as a result of an Asian Marketing Initiative announced last month by CONSOL.
The sale of a Panamax vessel of approximately 82,000 short tons is destined for merchant coke plants in the Tianjin/Guafeng area of China. The vessel will be loaded at CONSOL's Baltimore terminal.
CONSOL Energy is enthusiastic about this sale. It hopes to receive a significant premium for its Bailey Mine coal when compared to its local thermal market. It believes that this sale will establish CONSOL as a premium brand in Asia. Xcoal has representative offices in Beijing, Seoul, Tokyo and Singapore.
Last week, CONSOL’s board approved a $1 billion capital budget for 2010, which included $400 million for CNX Gas Corporation. The budget focuses on the goals of improving the efficiency and productivity of its fleet of mines, while funding meaningful production growth in the gas business.
CONSOL Energy has budgeted $500 million for coal and $100 million for other (non-gas) activities. The $400 million slated for CNX Gas is almost evenly split between shale programs and coalbed methane programs, with the single largest program consisting of $160 million for the Marcellus Shale. Included in the coal budget is $130 million in efficiency projects for longwall face extensions and overland conveyor systems. These projects are follow-throughs on commitments made prior to the economic downturn, and should help improve unit costs.
CONSOL Energy’s deep and diversified portfolio, primarily comprising coal and natural gas, is well positioned to benefit from the growing energy demand around the world and provides the company with significant long-term growth potential. It is and a low-cost coal producer in the Northern Appalachian basin, besides being the largest, thus operating a low-risk profile compared to its peers. Additionally, management deploys capital in a way that increases mining efficiencies and improves margins.
Based in Canonsburg, Pennsylvania, CONSOL Energy is a multi-fuel energy producer as well as an energy services provider, primarily catering to the U.S. power producers. The company principally operates two business lines: Coal and Natural Gas. It has 12 bituminous coal mining complexes in six states and reports proven and probable coal reserves of 4.5 billion tons. It is also a majority owner of CNX Gas Corporation, a leading Appalachian gas producer, with proved reserves of over 1.4 trillion cubic feet.
Source: zacks
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