GE Oil & Gas Signs Joint Venture Agreement with Kazakhstani Companies to Manufacture Gas Turbines

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Researched by Industrial Info Resources (Sugar Land, Texas)--GE Oil & Gas (Florence, Italy), a subsidiary of General Electric Company (NYSE:GE) (Fairfield, Connecticut), has signed a joint venture agreement with Kazakhstani companies JSC National Welfare Fund Samruk Kazyna (Astana, Kazakhstan) and JSC Zapadno-Kazakhstanskaya Mashinostroitelnaya Kompania (JSC ZKMK) (Astana) to set up a production facility in Kazakhstan to manufacture and service gas turbines. The joint venture will produce, assemble and deliver gas turbines for power transmission projects that link Kazakhstan to Central Asia and Azerbaijan.

GE Oil & Gas, which has been executing projects in Kazakhstan since the 1970s, has an ongoing agreement with JSC ZKMK to produce gas pumps and other allied components at the latter's manufacturing facilities. JSC ZKMK is a leading precision engineering company in Kazakhstan, manufacturing parts and components for the power, oil and gas, and process industries. GE Oil & Gas is also in the final stages of negotiations with JSC ZKMK to develop a state of the art service and maintenance center for gas pumps.

GE Oil & Gas has more than 50 gas turbines and an equal number of gas compressors operating in Kazakhstan. The company has also supplied equipment for the sour gas injection facility at the Kashagan, Karachaganak and Tengiz gas fields. The firm delivered its first order of 22 gas pumps to Kazakhstan in the early 1970s. The pumps were used to operate compressor stations at Chizkha and Uralsk. These stations were linked to the Soyuz pipeline.

GE Oil & Gas recently secured a $400 million order to supply compression equipment for the carbon capture and storage (CSS) project at Gorgon in Australia, slated to be the among the largest CCS facilities in the world. GE Oil & Gas will manufacture and test equipment, including refrigerant compressor trains, at its facilities in Massa and Florence in Italy. The first phase of the Gorgon gas project is estimated to cost about $40 billion. The equipment is expected to be delivered in 2011-12.

The agreement between GE Oil & Gas and the Kazakhstani companies was signed during Kazakhstani President Nursultan Nazarbayev's recent state visit to Italy. Italy and Kazakhstan signed commercial agreements to enhance bilateral trade. Italian oil major Eni SpA (NYSE:E) (Rome, Italy) and KazMunaiGaz National Company (Astana) also signed an agreement to cooperate on energy exploration projects in Kazakhstan. Italy's public railway authority Ferrovie dello Stato (Rome) signed a cooperation agreement to aid in the construction and development of Kazakhstan's national transportation network.

Kazakhstan is rich in oil, gas and minerals and is considered to be the biggest landlocked nation in Central Asia. According to the "Statistical Review of World Energy," published by BP plc (NYSE:BP) (London, England), as of January 1, 2009, Kazakhstan's proven gas reserves were about 1.82 trillion cubic meters. This accounts for about 1% of global gas reserves. In 2008, Kazakhstan produced about 30.2 billion cubic meters of gas and recorded gas consumption of 20.6 billion cubic meters. The country's gas reserves are located mainly in the western region of the country.

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