Coal export boom feeds talk of US port expansion

By Bruce Nichols

HOUSTON, July 30 (Reuters) - Plans for a new U.S. coal terminal on the East Coast have been suspended, but expanding U.S. export capacity remains a hot topic due to booming world demand, industry sources said Wednesday.

At a conference in March, Houston-based Kinder Morgan (KMP.N) outlined a plan to export coal from docks at Baltimore, Maryland, but dropped the project after storms damaged the site, sources said. Kinder Morgan declined to comment.

"Kinder Morgan did talk about the possibility at Cartagena," said New Jersey-based trader Frank Kolojeski, referring to the international coal conference in Cartagena, Colombia, earlier this year.

There also has been talk about expanding shipments from the U.S. West and Gulf coasts.

Arch Coal Inc (ACI.N) Chief Executive Steve Leer last week told analysts that the U.S. West Coast can handle more exports, and Illinois state officials have proposed helping to finance additional Mississippi River capacity.

U.S. coal export capacity expansion is getting a closer look as shipments to Europe and booming Asia soar and other exporting countries face delivery problems.

U.S. exports, less than 50 million short tons two years ago, could reach 80 million tons this year and 100 million tons in 2009 or 2010, according to many estimates.

"The nameplate capacity right now is somewhere north of 140 million tons," said analyst David Khani of FBR Capital Markets.