CANONSBURG – Consol Energy Inc. said Friday it signed several term coal deals totaling 10.8 million tons over a three-year period.
According to a news release from the Southpointe-based energy company, the agreements, along with 650 thousand tons of additional commitments for 2016, increase Consol’s Pennsylvania operations 2016, 2017, and 2018 sold positions to 93 percent, 61 percent, and 49 percent, respectively, assuming the midpoint of the guidance range of 26 million tons.
“These agreements demonstrate that even as markets continue to be challenged, customers are still incentivized to contract for term commitments to assure that they have a reliable supply of coal,” said Consol Chief Executive Officer Nicholas J. DeIuliis. “The Pennsylvania Operations coal has a quality advantage due to its high British thermal units that not only optimizes plant performance, but also travels well to compete in nontraditional markets.
“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 U.S. regions, which have traditionally been served by our competitors in the Central Appalachian and Illinois Basins.”
DeIuliis said in 2016, the company expects its Pennsylvania operations to generate positive free cash flow “even in the face of depressed natural gas prices and their correlated effect on coal pricing.”
Consol Energy reaffirmed the previous estimated price range across the entire coal division for committed and priced tons in 2016 of $50-$55 per ton.