Sonelgaz Signs $1 Billion in Service Agreements with GE Energy, Targeting Improved Efficiency, Output for Algerian Power Plants

Taking another important step toward meeting Algeria’s growing energy needs, state-owned power company Sonelgaz has signed service agreements with GE Energy worth more than US $1 billion. The service agreements will help to improve efficiency, output and reliability of 51 gas turbines installed in 13 power plants across the country.

The agreements include:

* An 18-year contractual service agreement (CSA) for the Koudiet Eddraouch power plant in El-Tarf province, 700 kilometers east of Algiers. This agreement follows the June 10, 2008 announcement that GE Energy will supply three F-class gas turbines for this new plant.
* A six-year maintenance program covering 48 gas turbines at 12 other Sonelgaz power plants across the country.
* The supply of “value packs” which can help increase the output of the gas turbines, along with upgraded Mark VI control systems. A GE value pack is an uprate service that can help improve the reliability, performance, efficiency, configuration and safety of equipment.

The Koudiet Eddraouch plant is expected to significantly increase Algeria’s current installed generation capacity. The project is part of Sonelgaz’s plans to boost its production capacity, to help meet Algeria’s growing power needs.

Algeria’s economy continues to rapidly expand. According to the Ministry of Energy and Mining, the country’s installed generating capacity in 2006 was 7,077 megawatts, while its need for power is surging more than 7% annually and will reach a projected 14,000 megawatts by 2010.

“Today, energy companies around the globe are working to get the maximum efficiency out of their existing power plants. As they break ground on new projects they are also implementing service agreements to make the most of their investment,” said Luis Ramírez, general manager of contractual services for GE Energy. “Our customized service agreements give customers the option of adding significant generation capacity to meet rising power demand in a shorter period of time. This gives them additional options as they work on their long-term strategy to build new power plants and add more power to the grid.”

“Sonelgaz is pleased to announce this agreement for a long-term maintenance contract for its overall installed gas turbine fleet in Algeria,” said Mr. Kinane-Daouadji, CEO, Sonelgaz Electricity Production. “The benefits of this long-term agreement include better plant efficiency and reliability and controlled maintenance costs. The agreement is made possible due to the trust we have in our business relationship and in the latest technology improvements developed by GE.”

GE currently is managing CSAs for customers at more than 700 sites covering 2,000 turbines worldwide. Under the CSA for the Koudiet Eddraouch plant, GE will provide maintenance, including parts, services and repairs, for a fixed price over the life of the contract. Benefits to the customer will include performance guarantees, fixed maintenance costs and access to GE’s latest technology and global experience. Similar to CSAs, GE’s multi-year maintenance program for the additional 13 Sonelgaz plants will offer a full range of services to meet specific plant requirements, and will help extend the life of the aging gas turbine fleet.

Sonelgaz generates and distributes natural gas across Algeria. Established in 1969, Sonelgaz and its subsidiaries generate more than 7,900 megawatts of electricity a year.