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GE And Sonelgaz Affiliate, SPE, Sign Contracts Valued At $2.7 Billion To Help Power Algeria

Stocks in this article: GE

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 NO x (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.

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