From: Reuters
Published February 6, 2008 05:27 PM

Major U.S. coal terminal expanding export capacity

HOUSTON (Reuters) - The largest U.S. coal terminal is expanding staff and operations to meet increased demand for exports, an executive with the operator said Wednesday.

Lamberts Point, operated by Norfolk Southern Corp, is preparing to raise exports from 13 million tons last year to perhaps 20 million this year, industry sources said.

Mark Bower, an NS assistant vice president over coal export marketing, confirmed an expansion to facilitate greater loading capacity but would not give specific numbers.

Demand for U.S. coal has risen rapidly because of delivery problems in South Africa, Australia and Indonesia, but European buyers have expressed doubts about U.S. capability to deliver.

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At the Coaltrans Americas conference in Miami last week, analysts said port capacity could be a bottleneck.

Additional staff at Lamberts Point will facilitate expanded use of the coal pier's two loading systems, Bower said.

"This allows us to load two Panamax size vessels at once or one vessel much more quickly," Bower said.

Jim Thompson, editor of Coal & Energy Price Report, has estimated capacity will increase to as much as 20 million tons.

Lamberts Point already was aiming for 16 million tons in 2008 with existing staff, and the new employees could add as much as 4 million tons to capacity, Thompson said.

Exports from Lamberts Point in 2007 were nearly all metallurgical coal, but soaring European power plant demand could raise steam coal exports to 1 million tons in 2008, sources say.

"We will do more than that, but we do not expect big numbers," Bower said.

Steam coal shippers prefer ports with ground storage, Bower said. Lamberts Point has no ground storage, instead loading ships directly from trains run through a giant rail yard.

(Reporting by Bruce Nichols; editing by Jim Marshall)

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