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Yesterday, Kinder Morgan Energy Partners L.P. (KMP) announced plans to spend about $140 million to expand its export coal handling facilities along the Gulf Coast and a long-term agreement reached with Arch Coal that will help support the expansion.

After proposed terminal upgrades are completed and certain rail service agreements are reached, Arch will ship coal at guaranteed minimum volume levels through KMP-owned terminals, according to a press release.

KMP plans to install a new shiploader and a rail-car loop track to handle three 135-car unit trains at its terminal in Houston. Slated for completion in second-quarter 2014, the projects will boost the terminal’s annual capacity to 10 million tons of coal, KMP officials said.

The Houston terminal and East Coast facilities offer dual rail access from Class Is, while an International Marine Terminal provides barge access to the inland waterway system. Multiple transportation options will enable Arch to “unlock incremental value” for its domestic coal production and coal reserves over the next 10 years, KMP officials said. Anticipated throughput volumes will comprise metallurgical and thermal coal from Arch’s major coal producing regions, including Appalachia, the Powder River Basin, Western Bituminous Region and, eventually, the Illinois Basin, they said.

“The demand for export coal continues to grow and we are pleased to offer Arch and other customers options in various markets through our multi-location terminal network,” said Jeff Armstrong, president of Kinder Morgan Terminals.