GE and Romania's Nuclearelectrica Sign Service Agreement for Nuclear Power Units

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Researched by Industrial Info Resources (Sugar Land, Texas)--GE Energy (Atlanta, Georgia), a division of General Electric Company (NYSE:GE) (Fairfield, Connecticut), and Romania's state-owned Nuclearelectrica (Bucharest) have announced the signing of a services and maintenance contract worth a minimum of 69 million euros ($96 million) and up to a maximum of 105 million euros ($146 million) for the Cernavoda 1 and 2 nuclear power units.

The contract replaces and extends an existing four-year contract between GE and Nuclearelectrica for unit 1 at Cernavoda that recently expired. The new eight-year contract requires GE to perform repair services and undertake full maintenance for its steam turbines and associated equipment for the two units at Cernavoda.

The Cernavoda power plant is Romania's only nuclear power facility and accounts for about 18% of the country's electricity production. The plant was designed by Atomic Energy of Canada Limited (Mississauga, Ontario) in the 1980s and was initially designed to contain five reactors.

Unit 1 was commissioned in 1996 and has a generating capacity of 705.6 megawatts (MW). Unit 2 has the same capacity and was connected to the national grid in 2007. Both units are of the Canada Deuterium Uranium (CANDU-6) pressurized heavy water reactor type.

In 2008, a joint venture consisting of Nuclearelectrica, ArcelorMittal (NYSE:MT) (Luxembourg), CEZ a.s. (PRG:BAACEZ) (Prague, Czech Republic), Enel SpA (BIT:ENEL) (Rome Italy), RWE AG (OTC:RWEOY) (Essen, Germany) and GDF Suez SA (EPA:GSZ) (Paris, France) was formed to develop and commission units 3 and 4 of the facility. There are currently no plans to complete unit 5.

The agreement with Nuclearelectrica follows other contracts recently awarded to GE in Romania. In September last year, GE signed contracts with CEZ to supply 139 wind turbines, each with a capacity of 2.5 MW, to the Fantanele windfarm, and 101 similar turbines for the Cogealac windfarm in the Dobrogea province.

In 2008, GE and partner Metka SA (ATH:METKK) (Neo Iraklio, Greece) signed a contract for the construction of a gas-fired, combined-cycle 860-MW power plant with Romania's largest oil and gas firm, OMV Petrom SA (BSE:SNP) (Bucharest, Romania), with a scheduled completion date of September 2011. The deal was reported to be worth 453.8 million ($631 million).

But it is not just products driving GE forward. The company is also pursuing service and maintenance agreements, with the Cernavoda contract being just one example.

On January 26 this year, GE announced the signing of a contractual service agreement (CSA) with Thailand's largest chemical producer, PTT Chemical Public Company Limited (Bangkok, Thailand). The agreement covers three GE Frame 5 gas turbines and six Frame 6 gas turbines at the Map Ta Phut Industrial Estate in Rayong Province, Thailand, for 13 years.

As recently as December last year, GE announced the signing of a six-year CSA with Turkish energy company Enerjisa Power Generation Company (Istanbul, Turkey), covering three power plants at Adana, Mersin and Canakkale in Turkey.

GE's long-term service agreements cover the supply of parts, repairs and field services for both planned and unplanned shutdowns for gas turbines and auxiliary equipment. To date, GE has more than 600 long-term service agreements in place worldwide.

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