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Panda Lands $835M Financing For Major NatGas-Fired Power Plant

Dallas-based private equity firm Panda Power Funds LP has secured $835 million in private financing to begin work on one of the nation's largest coal-to-natural gas power conversion projects in central Pennsylvania.

Panda said Wednesday that it expects its 1,124 MW Hummel Station power plant in Snyder County, PA, to be in-service by 1Q2018 (see Daily GPIFeb. 18). Goldman Sachs, Investec and the Industrial and Commercial Bank of China arranged $710 million of debt financing for the facility. Siemens Financial Services would be a co-investor under the financing plan with $125 million in committed equity.

The plant would be located on the western bank of the Susquehanna River at the former site of a retired coal-fired power plant. That facility was shuttered last year after stiff competition from low-priced gas and increasingly stringent federal emissions standards forced it to close, Panda said. The natural gas-fired facility is expected to provide 180% more power than the former 400 MW coal-fired plant.

Panda said Hummel would be fueled with Marcellus Shale gas, delivered via Williams Transcontinental Gas Pipeline and the MARC 1 pipeline. Last year, UGI Corp. began the permitting process to construct a 35-mile, 200,000 Dth/d pipeline to connect the facility to those systems (see Daily GPIDec. 22, 2014). 

The plant would serve large power markets, including Philadelphia and the New York metropolitan area. Construction and engineering firm Bechtel Corp. has been selected to build and commission the plant, while Siemens Energy Inc. would provide the natural gas turbines, steam turbine, generators and other equipment. The turbines would be manufactured at Siemens’ Charlotte, NC, facility. The plant has also been designed to lower sulfur dioxide and nitrogen oxides emissions by more than 90%, compared to the facility it is replacing, with a capacity to provide power for one million homes.

Panda said construction would create 900 jobs, while the plant would create another 35 direct long-term jobs. For gas producers in the Appalachian Basin, the facility would provide another long-term end-use, as well. Panda has two other 829 MW natural gas-fired facilities under construction in Bradford and Lycoming counties, PA (see Daily GPIMay 16, 2014).

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