SunCoke Energy Partners closes on buy of Convent coal terminal

SunCoke Energy Partners LP (NYSE: SXCP) on Aug. 12 closed on its previously announced acquisitions of the Convent Marine Terminal (CMT) and an additional 23% interest in the Granite City cokemaking facility in Illinois for $412 million and $67 million, respectively.

The CMT acquisition, from an affiliate of The Cline Group, a company of coal operator Chris Cline, was funded via a combination of equity, seller financing and cash. The Granite City dropdown was funded with $20.1 million of equity and assumption of $46.9 million of SXC’s senior notes, inclusive of accrued interest and redemption premium. 

SunCoke Energy Partners manufactures high-quality coke, which is baked coal that is used in the blast furnace production of steel. It also provides export and domestic coal handling services to the coke, coal, steel and power industries. Its coal handling terminals have the collective capacity to blend and transload more than 45 million tons of coal each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. SXCP’s General Partner is a wholly owned subsidiary of SunCoke Energy Inc. (NYSE: SXC).

SunCoke Energy also announced Aug. 12 that it had closed on its agreement with SunCoke Energy Partners to drop down an additional 23% interest in the Granite City, Ill., cokemaking facility for $67 million. SunCoke Energy Inc. will continue to retain a 2% ownership interest in this facility.

SunCoke Energy Inc. supplies high-quality coke to the integrated steel industry under long-term, take-or-pay coke contracts that pass through commodity and certain operating costs to customers. Its cokemaking facilities are located in Illinois, Indiana, Ohio, Virginia, Brazil and India. In addition, it owns about 110 million tons of for-sale proven and probable coal reserves in the Central Appalachian coalfields of Virginia and West Virginia.

The Convent Marine Terminal is one of the largest export terminals on the U.S. Gulf Coast, providing strategic access to seaborne markets for coal and other industrial materials. Supporting low-cost Illinois Basin coal producers, like Cline-founded Foresight Energy in Illinois, the terminal has direct rail access and the current capability to transload 10 million tons of coal annually. The facility is supported by long-term contracts with volume commitments covering substantially all of its current capacity. A $100 million capital investment has modernized and increased efficiency at the facility and when augmented with an additional $20 million in pre-funded investment, will expand capacity to 15 million tons and strengthen the terminal’s competitive profile, SunCoke has said.

Granite City is a 120-oven coking facility located at a U.S. Steel operation in Illinois that produces both 650,000 tons per year of coke and waste steam from the coking process for power production.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.