Under the new agreements, which were effective in January for the throughput agreement and April for the transportation agreement, Cloud Peak Energy made upfront payments and also committed to minimum payments through 2018. The outstanding undiscounted commitments are approximately $51 million through the current two-year term of these agreements.
The agreements may be extended through the end of 2019 if elected. In addition, Westshore has certain priority rights on throughput capacity in respect of any export shipments by Cloud Peak Energy through 2024. The original throughput and transportation agreements and underlying take-or-pay commitments would have expired at the end of 2024.
“Westshore and BNSF are critical parts of our effort to maintain a viable long-term Asian export business,” said Colin Marshall, Cloud Peak Energy president and CEO. “We value our strong relationships with Westshore and BNSF and appreciate their willingness to work with us. We believe in the long-term opportunity for Asian exports of Powder River Basin coal.”