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GE and Sonelgaz Affiliate, SPE, Sign Contracts Valued at $2.7 Billion to Help Power Algeria

Marking some of its largest power agreements in company history, GE (NYSE:GE) today announced three contracts totaling approximately $2.7 billion with SPE, an affiliate of Sonelgaz—Algeria’s national electricity and gas company. GE is to supply proven and reliable heavy-duty gas turbine combined-cycle and aeroderivative gas turbine technology for nine power plants. The addition of nearly 9 gigawatts (GW) of electricity will help strengthen Algeria’s power sector to help meet the growing requirements of the country.

The three agreements include six new combined-cycle power plants that will ultimately increase Algeria’s generating capacity by 70 percent adding more than 8 GW of electricity; two fast-track projects that add 528 megawatts (MW) of capacity for this summer’s peak demand; and a new simple-cycle power plant to add 370 MW to Algeria’s electricity grid.

“These contracts are undoubtedly the most important acquisitions of SPE in the history of power generation in Algeria. This will create a wealth-generating vision that goes beyond a simple power plant construction agreement,” said Nabil Kafi, CEO of SPE. “This contract is an important step in realizing Sonelgaz’s strategy which involves the implementation of a series of industrial partnerships predicated on the use of local resources.”

Contract for Six New Power Plants; Planned JV for Production Facility

Under the first agreement, GE has signed a $1.9 billion contract with Société Algérienne de Production de l’Electricité (SPE Spa), part of the Sonelgaz Group, to provide power generation equipment and services for six new combined-cycle power plants. Together the plants will produce more than 8 GW of electricity generating enough power to help meet the equivalent of 8 million Algerian households, increasing the country’s energy capacity by nearly 70 percent.

For the six new combined-cycle power plants, GE is supplying the proven and reliable 9F 3-series gas turbines with more than 200 installed worldwide and more than 12 million operating hours. Using natural gas from local Algerian gas fields, the turbines will be equipped with GE’s latest Dry Low NOx (DLN) dual-fuel combustion technology to reduce emissions, extend maintenance intervals and enable the Sonelgaz power plants to operate with greater flexibility. The 9F-3 gas turbines will be manufactured at GE’s Greenville, S.C., facility, while the steam turbines and generators will be built in Schenectady, N.Y., for shipment to Algeria. Advanced technology gas turbines are one of the largest sources of cleaner energy exported from the U.S.

The nine Sonelgaz power plants receiving the GE technology are located in northern Algeria and will begin simple-cycle duty in 2015 and combined-cycle operation in 2017.

Additionally, GE announced the plan for a long-term joint venture with Sonelgaz for the development of a new production facility in Algeria that will eventually produce more than 2 GW of power generation equipment per year. The equipment will cater to the needs of future power plants demonstrating GE’s commitment to localization, knowledge transfer and development of the Algerian workforce. The new facility is expected to create, in due course, nearly 400 local skilled jobs and potentially more than 600 additional indirect jobs within the local supply chain.

Aeroderivative Gas Turbines Meet Fast Track Projects

For the second agreement, GE delivered within six months its advanced aeroderivative gas turbines to support Algeria in meeting its 2013 summer peak electricity demand. This followed the contract signed earlier by a consortium of GE and Power Projects Company, an affiliate of METKA, with Société Algérienne de Production de l’Electricité (SPE Spa), an affiliate of Sonelgaz, in October 2012 for nearly $800 million to supply 24 trailer-mounted TM2500+ aeroderivative gas turbines and services for two “fast-track” projects in northern Algeria, to produce more than 528 MW of power. METKA is the engineering, procurement and construction contractor in charge of the mobile balance of plant for the projects.

This agreement marked one of the largest orders ever received for GE’s aeroderivative technology, which delivers fast, flexible and reliable power anywhere, anytime. To date, 16 units are available to generate 352 MW of power for the provinces of Oum el Bouaghi (F’Krina) and M’Sila with an additional eight units and 176 MW of power generation scheduled to join the grid by the in 2013.

Contract for New Simple-Cycle Power Plant; Power Generation Services agreements

Under the third agreement, GE has received an order for more than $150 million to supply power generation equipment to Société Algérienne de Production de l’Electricité (SPE Spa), part of the Sonelgaz Group, for the Hassi R’mel simple-cycle gas turbine plant. The new plant will add approximately 370 MW of power for Algeria’s electricity grid.

In addition to supplying equipment for the new Sonelgaz affiliates plants, GE power generation services include new unit spares, technical direction and installation services and training to help increase the performance, flexibility and reliability of operations at the power plants.

“Our latest agreements with Sonelgaz underscore our continuing commitment to supply the best technology and services to assist Algeria in meeting its growing energy needs,” said Steve Bolze, president and CEO, GE Power & Water. “These recent announcements demonstrate GE’s capability to provide proven technology that can address both the immediate need for more power and the long-term energy requirements of a growing economy. In addition, the new GE-Sonelgaz industrial cooperation is further evidence that we are invested in the future of Algeria’s energy infrastructure.”

The new agreements build on more than 40 years of GE experience in Algeria, one of the world’s leading producers of natural gas. It expands an existing relationship between GE and Sonelgaz and its affiliates that includes a nearly $500 million service contract signed by the companies in 2008. That agreement is helping to improve efficiency, output and reliability of 51 gas turbines operating in 13 power plants across Algeria.

Energy demand in Algeria is estimated to be growing at an average annual rate of approximately 14 percent, rising from about 12 GW to 20 GW by 2017. The government is committed to boosting energy capacity through its investments in the power sector.

As Algeria progresses at a fast pace with a focus on infrastructure building, GE is committed to being the country’s growth partner through technology transfer, local jobs and skill training and strengthening operational efficiencies.

About GE

GE (NYSE:GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.

About GE Power & Water

GE Power & Water provides customers with a broad array of power generation, energy delivery and water process technologies to solve their challenges locally. Power & Water works in all areas of the energy industry including renewable resources such as wind and solar; biogas and alternative fuels; and coal, oil, natural gas and nuclear energy. The business also develops advanced technologies to help solve the world’s most complex challenges related to water availability and quality. Power & Water’s six business units include Distributed Power; Nuclear Energy; Power Generation Products; Power Generation Services; Renewable Energy and Water & Process Technologies. Headquartered in Schenectady, N.Y., Power & Water is GE’s largest industrial business.

Follow GE Power & Water on Twitter @GE_PowerWater.

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