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Natural Resource Partners LP Message Board

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  • norris_3845 norris_3845 Jul 17, 2009 11:07 PM Flag

    NRP distribution is not sustainable

    Coal at $65/ton in appalachia (about 12,500 btu/pound) is about $2.60/million BTUs. Assuming a 25% cost for shipping and processing (low sulfur coal has to have a scrubber), I would say coal at $65/ton is equivalent to gas at about $3.25/mcf.

    However, having said that, coal is not currently being priced at $65/ton. Longterm contracts are currently around $50/ton. Also, is natural gas going to stay under $4?

    Interesting questions, but I don't have the answer. So, right now, I would say that natural gas puts a ceiling on coal of about $65 to $70/ton. But, that is all it does.

 
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6.85-0.36(-4.99%)Mar 27 4:02 PMEDT