GE Energy Signs $45 Million Service Agreement with Dubai Aluminium Company

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Researched by Industrial Info Resources (Sugar Land, Texas)--GE Energy (Georgia, Atlanta), the energy division of General Electric Company (NYSE:GE) (Fairfield, Connecticut), has entered into a multi-year service contract valued at more than $45 million with Dubai Aluminium Company Limited (Dubal) (Dubai, United Arab Emirates) aimed at reducing the total cost of aluminum production by reducing the total cost of power generation at the facility. GE will accomplish this by maximizing the performance and reliability of 19 GE gas turbines used in Dubal's production facility.

Established in 1979, Dubal's aluminum complex has a current production capacity of 960,000 tons per year of hot metal. The power plant in the facility operates on eight Frame 5 units, six Frame 9E units, and five Frame 9B units. Under the agreement, GE Energy will also undertake the supply of parts and components, repairs, performance uprates, and field services for planned outages for a period of seven years. These measures will lead to a reduction in Dubal's inventory of critical parts, one of the key milestones in the firm's cost-cutting initiative. All repairs under the service agreement will be carried out at Gulf Turbine Services (Abu Dhabi, United Arab Emirates), which was established in 2001 as a joint venture between GE and Abu Dhabi Aircraft Technologies PJSC (Abu Dhabi). GE Energy will also reduce Nox emissions from the Frame 5 units about 15%.

GE Energy's service agreement with Dubal comes close on the heels of similar developments in Oman and Qatar, where ABB Limited (NYSE:ABB) (Zurich, Switzerland) has augmented the energy efficiency of two aluminum smelters by 18% by using rectifier transformers.

In another development, GE has been selected by Kuwait's Ministry of Electricity and Water to develop the 2,000-megawatt Subbiya power plant. The firm posted the lowest bid, $2.65 billion. The agreement is subject to final approval from the Audit Bureau. The engineering, procurement and construction contract for the project was originally awarded in 2006 to a consortium of GE and Hyundai Heavy Industries Company Limited (SEO:009540) (Ulsan, South Korea). However, the contract was subsequently cancelled and re-tendered based on a review of Kuwait's water and energy strategy by the Ministry of Energy.

GE and five other firms--Iberdrola Ingenieria y Construccion (Bilbao, Spain), Marubeni Corporation (OTC:MARUY) (Tokyo, Japan), Mitsui & Company Limited (NASDAQ:MITSY) (Tokyo), Siemens AG (NYSE:SI) (Munich, Germany), and SNC-Lavalin Group Incorporated (TSX:SNC) (Montreal, Quebec)--placed bids in the range of $2.62 billion to $3.21 billion for the reissued contract. However, Kuwait re-tendered the contract in April this year after changing the valuation of the tender to 40% Kuwaiti dinars and 60% U.S. dollars to lower project costs from the initial estimate of $2.4 billion and attract funds from banks. The power plant is now scheduled to come online in 2011.

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