Coal news and updates

Consol Energy could grow coal MLP with mine, terminal and gathering assets

Consol Energy Inc.’s master limited partnership of three Pennsylvania coal mines could grow with the addition of a Virginia metallurgical coal mine, its Baltimore terminal and some Appalachian natural gas gathering lines.

An updated filing with the U.S. Securities and Exchange Commission shows the Cecil-based coal and natural gas company added the three assets it might include as part of the CNX Coal Resources.

Consol announced an initial public offering in April for the MLP dubbed CNX Coal, registering its initial assets. Those consisted of a 20 percent undivided interest in, and operational control over, its southwestern Pennsylvania thermal coal mining complex: the Bailey Mine, Enlow Fork Mine and the Harvey mine.

That registration now grants CNX Coal a right of first offer to acquire 80 percent undivided interest in the Buchanan Mine in Mavisdale, Va., the marine terminal in Baltimore, Md., and about 110 miles of natural gas gathering pipelines spanning West Virginia, Virginia and Kentucky.

In 2014, the Buchanan Mine produced 4.0 million tons of met coal, which primarily is used in steelmaking and coke production. The Baltimore terminal, which Consol has operated for more than three decades, handled 9.6 million tons of coal that same year.

The pipeline system transported an average of 202 million cubic feet per day of natural gas during the first three months of 2015 and served about 3,940 active producing wells by the end of March. Most of the gas is coalbed methane.

Consol spokesman Brian Aiello declined to comment on the CNX Coal’s assets until the offering is completed, which company has indicated could be by mid-2015.

“The amendment to our SEC filing simply outlined a number of the other assets the company holds that may or may not be candidates in the future” to add to CNX Coal, Mr. Aiello said.

MLPs are publicly traded companies that serve as pass-through entities for tax purposes. The partnership is not subject to income tax and passes earnings directly on to shareholders and to the general partner who runs the business.

Dropping additional assets into MLPs is not uncommon for energy companies, particularly those that build or operate pipelines.

Last year, Consol launched its first MLP, Cone Gathering LLC, a 50/50 venture with Houston-based Noble Energy to provide midstream infrastructure for their jointly-owned acreage in the Marcellus Shale.

EQT Corp., the Downtown-based natural gas producer, spun off its midstream natural gas gathering assets into EQT Midstream Partners in 2012. Earlier this year, EQT sold 70 miles of gathering line and nine compressor units in West Virginia to the partnership.

source: http://powersource.post-gazette.com