Finance

Calpine Corp. and General Electric Corp.’s GE Energy Financial Services unit have obtained an $844.5 million credit facility to finance construction of the precedent-setting natural gas-fired 619 MW Russell City Energy Center in the East San Francisco Bay Area town of Hayward, CA. The joint venture power plant, now under construction, was the nation’s first to receive a federal air permit that includes a voluntary limit on greenhouse gas (GHG) emissions. GE and Calpine said the financial facility includes a construction loan that converts to a 10-year term loan when Russell City begins commercial operations in mid-2013. Approved for construction almost a decade ago, the Russell City project struggled with changes and a lack of a long-term sales contract for its output. With GE as a partner, Calpine obtained state approval for a long-term power sales contract with Pacific Gas and Electric Co. in 2009, and obtained a key GHG emission permit from the Bay Area Air Quality Management District last year.

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, is drafting legislation to repeal billions of dollars in tax breaks for the five largest oil and natural gas companies. Repeal of tax breaks and other energy issues are likely to take center stage this week as Congress returns from its two-week Easter recess.

The West Virginia Legislature’s House Judiciary Committee is expected to vote Thursday on a bill that would make several changes to the state’s regulation of Marcellus Shale drilling, including instituting dramatic increases to horizontal permitting fees to fund a larger staff at the Department of Environmental Protection (DEP).

The Keystone Energy Forum (KEF), an alliance of the American Petroleum Institute (API) and the Pennsylvania Independent Oil and Gas Association (PIOGA), was rolled out recently to disseminate “factual” information about Marcellus Shale drilling activities in Pennsylvania.

BG Group plc, which last year agreed to help finance EXCO Resources Inc.’s exploration efforts in the Haynesville/Bossier Shale play, last week agreed to pay EXCO $950 million to acquire a half stake in an Appalachian Basin leasehold that includes Marcellus Shale acreage.

BG Group plc, which last year agreed to help finance EXCO Resources Inc.’s exploration efforts in the Haynesville/Bossier Shale play, on Monday agreed to pay EXCO $950 million to acquire a half stake in an Appalachian Basin leasehold that includes Marcellus Shale acreage.

Kevin Howard, the former vice president of finance for Enron Corp.’s broadband unit, has pleaded guilty in U.S. District Court in Houston to one count of falsifying books and records. Under the plea agreement, Howard would serve four to 12 months of probation or home confinement, or a combination of both. U.S. District Judge Vanessa Gilmore accepted the plea and will formally sentence Howard later this year. The former Enron executive was scheduled to go to trial for a third time on fraud and conspiracy charges, similar to the charges he faced when he first was indicted in 2003 (see Daily GPI, March 13, 2003). Howard’s first trial ended in a mistrial (see Daily GPI, June 1, 2006). In the second trial Howard was found guilty on five counts, but the convictions later were dismissed by Gilmore (see Daily GPI, Feb. 2, 2007).

ConocoPhillips announced changes to senior management. Effective immediately, John Carrig, currently executive vice president, finance, and CFO, will become president and COO. He will continue to report to CEO Jim Mulva. Jim Gallogly, currently executive vice president, refining, marketing and transportation, will become executive vice president, exploration and production. Willie Chiang, currently senior vice president, commercial, will become senior vice president, refining, marketing and transportation. Greg Goff, currently president, strategy, integration and specialty businesses for refining, marketing and transportation, will become senior vice president, commercial. Ryan Lance will remain president, exploration and production for Europe, Asia, Africa and the Middle East. Gallogly, Chiang and Goff will report to Carrig.

Commercial finance provider CIT Group Inc. has arranged $125 million in senior secured financings for Arcadia Gas Storage, a salt dome gas storage facility to be developed in north-central Louisiana (see Daily GPI, Jan. 25, 2007). Arcadia is owned by Cardinal Gas Storage, a 50/50 joint venture of Martin Resource Management Corp. and Energy Capital Partners. The facility is to be constructed in two phases over the next three years and will have 7.8 Bcf of working capacity. Financing for the transaction was provided by CIT Energy, a unit of CIT. The senior secured credit facilities included construction, pad gas and accordion financing.