On May 9, SunCoke Energy (NYSE: SXC) closed on its dropdown agreement with SunCoke Energy Partners LP (NYSE: SXCP) to contribute a 33% interest in each of the Haverhill and Middletown cokemaking facilities in Ohio for total consideration of $365m.
SXC continues to hold a 2% interest in both facilities, which bake coal into coke for the steelmaking market. SXC is the sponsor, general partner with a 2% general partner interest, and largest unitholder of SXCP, holding a 54% limited partnership interest and all the incentive distribution rights.
Separately, SXC said it received a final permit to construct and operate a potential new 660,000 ton per year cokemaking facility near South Shore, Ky. It plans to begin construction only after securing commitments from customers for a substantial portion of the plant’s expected future output.
SXC’s updated full year 2014 guidance includes:
- Domestic coke production is expected to be approximately 4.2 million tons;
- Coal production is projected to be approximately 1.3 million tons from operations in Central Appalachia, mainly Virginia;
- Cash generated by operations is expected to be approximately $160m; and
- Capital expenditures are projected to be $138m.
Kentucky plant would produce power as well as coke
A permit document for the planned new coke plant was released on May 9 by the Kentucky Division for Air Quality. It said that SunCoke Energy South Shore LLC, owned by SunCoke Energy, has applied to construct and operate a metallurgical coke production and heat recovery electrical plant on the Ohio River in Greenup County.
The facility will be located on an approximately 254-acre site, consisting of coal handling and preparation equipment, heat recovery coke ovens, coal charging, coke pushing and handling equipment, a quench tower, coke storage facilities, various administrative and support buildings, and associated air pollution control equipment. In addition, waste heat recovery steam generators (HRSGs) and a steam turbine will be installed to recover heat from the process gases to produce electricity.
There are 120 coke ovens arranged in two separate banks, East and West, with a combined capability of carbonizing up to 1,226,400 tons per year (tpy) of coal and producing up to 831,100 tpy of metallurgical coke.
The heat released from combusting the gases in the flues and tunnel is routed to HRSGs, which use the heat to create steam for running an electricity generating turbine capable of producing 40 MW-75 MW of power. The HRSGs also serve to cool the gases to protect the downstream emission control devices placed before the main emission stack. Three HRSGs will be in use on this site to allow for maintenance/repair without direct flue gas release to atmosphere.
SunCoke Energy (SXC) is the largest independent producer of coke in the Americas. Its advanced, heat-recovery cokemaking process produces high-quality coke for use in steelmaking, typically captures waste heat for derivative energy resale and meets or exceeds environmental standards. Its U.S. cokemaking facilities are located in Virginia, Indiana, Ohio and Illinois.