Some people have been wondering recently whether the new owners of the power plant, Dominion, will continue to burn large amounts of Colombian coal there. See below for an update--the answer is YES!
Copyright 2005 Energy Publishing, LLC
All Rights Reserved
The U.S. Coal Review
February 4, 2005
SECTION: No. 1528
LENGTH: 615 words
HEADLINE: Dominion active on import scene as it rounds up coal for new plants
BODY:
Dominion active on import scene as it rounds up coal for new plants
Dominion is active on the import scene, according to various sources, its attention on the Brayton Point and Salem Harbor stations, which it acquired only recently.
Dominion is focused on compliance and super-compliance coals, including some of what you’d expect – Colombian – and some that’s a bit different: Russian coal, which is available to the utility market in the U.S. on an economic basis occasionally and w hich suits Dominion’s current needs.
Dominion is “trying to stockpile SO2 allowances,” according to one source, and Russian coal containing 0.3% sulfur is an attractive option. Glencore probably is supplying some of the coal.
But the most recent “volume” buy for the Massachusetts generating stations was from Colombia, sources said – maybe 300,000 metric tonnes or more, recently. CMC is the likely supplier.
Of course, Brayton Point and Salem Harbor must deal with among the strictest sulfur emissions limitations in the U.S.
“I heard they bought some Russian,” a source with international connections said. “My understanding is that they’re going to try to bring some Russian into Massachusetts.”
South African coal, which is now $15/metric tonne or so lower in price than its Colombian counterpart, also could be an attractive option for Dominion. South African coal might also allow Dominion to “save a little bit on SO2 allowances” in comparison to available Colombian tonnage, a source said.
In relation to the $15 difference in the price of the coal, “the freight difference is not that great,” the source said.
Coal exported out of Richards Bay is “being offered in the mid-$40s a metric tonne with no buying interest in Europe,” a source said.
Frankly, reports concerning Dominion have been somewhat contrdictory.
One reliable source said he is aware of Dominion buying some coal, “rebound coal,” from European consumers that have excess because of the mild winter across the drink.
“I’ve heard those prices are a lot lower than that $60 number” utilities have paid recently for Colombian coal, the source said. “I have been told that some vessels have changed hands.”
“I think that’s a rumor,” another source, who is also quite reliable, countered. “I don’t see how that could work,” he said, citing logistics. “It seems a little odd to me.”
The second source did say that Dominion has “bought a lot of coal, but still has coal to buy.”
Most of the coal Dominion has purchased for Brayton Point and Salem Harbor in the recent past has been supplied by Glencore from the new Calenturitas mine in Colombia that was opened in July 2004, perhaps in concert with La Jagua coal, which is high i n calorific content.
“A lot of that was done before the actual changeover” in ownership of the Massachusetts plants, according to a source.
Colombian coal prices aren’t likely to dive soon, it seems, despite the anemic winter demand for steam coal in Europe and the fact that South African prices have plummeted to 11-month lows.
“Some consumers in Europe are selling cargoes, but they’re all non-South American cargoes,” a source said. “There may be some cheap South African tonnage available. Constellation has been trying to buy some cargoes that were sold to National Coal Supp ly Corporation in Israel and has been rejected.”
“I don’t see the Europeans giving up a lot of tons,” a source said.
And one source who recently tried to purchase some Colombian coal for re-sale into the U.S. said “a major buyer in Europe said recently, ‘No more the first half.”
“Unlike everything else in Europe, it’s the one that people won’t let go of,” another source said.
Utilities looking for South American tonnage?
“Best of luck always is what we used to write in our yearbooks,” a source said.
