Overview: Ambre Energy—a coal and oil shale export company

Ambre Energy

Ambre Energy was founded in June 2005. It’s an Australian-American coal and oil shale company. The company’s Australian headquarters are located at Brisbane. The head American office is located at Salt Lake City, Utah. The company operates in three business lines—U.S. coal export infrastructure, international coal marketing and trading, and U.S. thermal coal production.

U.S. coal export infrastructure

The company secured two port facilities in the Pacific Northwest to export U.S. coal to Asia. Millennium Bulk Terminals-Longview is located on Columbia River in Washington state. Ambre Energy holds 62% stake in the facility. The other 38% is held by Arch Coal (ACI). The first stage has a capacity of 25 million ton per annum (or Mtpa). It’s expected to be operational in 2015. It cost $450 million. The second stage has a capacity of 19 Mtpa. It’s expected to be operational by 2018. It cost $200 million.

Cloud Peak Energy (CLD) will also get export capacity at the port as a part of the deal. The other port infrastructure is the Morrow Pacific project. It’s located on the Columbia River in Oregon. Both the ports have proposed rail connectivity from either BNSF or Union Pacific (UNP).

International coal marketing and trading

The company’s international coal marketing and trading business wants to meet thermal coal demand from Asian markets—primarily South Korea, Japan, and Taiwan. It will supply coal from its own mines as well as other producers’ mines. The company has ten-year coal supply agreements with two South Korean utilities. Higher demand growth is anticipated from Asia. This is positive for exchange-traded funds (or ETFs) investing in coal producers like the SPDR S&P Metals & Mining ETF (XME).

U.S. thermal coal production

The company has 50% interest in the Black Butte mine in Wyoming. Anadarko Petroleum Corporation (APC) also has interest in the mine. The mine holds total reserves of 96 million tons. The company recently signed a deal to buy Cloud Peak Energy’s (CLD) 50% stake in the Decker mine in Montana. The deal will make Decker mine a wholly-owned mine of the company. The Decker mine holds total reserves of 138 million tons. In the next part of the series, we’ll discuss the deal in more detail.