- Associated Press - Friday, August 14, 2015

BILLINGS, Mont. (AP) - A Wyoming company has entered a partnership to develop a Washington state coal port for shipments of the fuel to Asia, in a deal that gives Montana’s Crow Tribe the future option of a 5 percent stake in the project.

Cloud Peak Energy paid $2 million up front and will pay up to $30 million to cover permitting expenses for the Gateway Pacific Terminal, in exchange for a 49 percent stake in the project, spokesman Rick Curtsinger said Friday.

The port in the Puget Sound, just south of the U.S.-Canada border, would accommodate almost 60 million tons a year of coal and other commodities.

Cloud Peak, based in Gillette, plans to construct a major mine on the Crow Reservation.

Coal companies hope exports to Asia will shore up their industry, which has been battered by competition from cheap natural gas and more stringent restrictions on pollution caused by burning the fuel.

Port sponsor SSA Marine retained a 51 percent ownership in the project. The tribe’s stake in the port would come out of Cloud Peak’s share, and Curtsinger said there is no upfront financial obligation for the Crow.

However, if the Crow exercises its ownership option, the tribe would be responsible for 5 percent of construction financing, Curtsinger said.

Washington state’s Lummi Nation has pressed the U.S. Army Corps of Engineers to deny the project’s permit because it would disrupt the tribe’s fishing practices.

The proposal also has met strong opposition from environmental groups worried about the greenhouse gases and other pollutants produced by burning coal.

Crow Chairman Darren Old Coyote said the deal still needs approval from the tribal Legislature. Construction of the port would make it easier for Cloud Peak to develop and mine coal on the reservation, he said.

“It’s basically a low-risk, 5 percent stake,” he said.

Construction costs for Gateway Pacific have been estimated at $700 million, although that could change depending on any conditions attached to pending permits from state and federal agencies, said SSA Marine Senior Vice President Bob Watters.

Watters said environmental studies on the proposed port could be done by the end of 2016.

The ownership agreement gives Cloud Peak the right to exit the deal during the permitting phase and return its interests to SSA Marine. A previous deal gave Cloud Peak the option to move almost 18 million tons of coal annually through the port.

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