GE and PETRONAS Sign New Global Frame Agreement
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Press release date: March 31, 2014
New Seven-Year Agreement Strengthens Commitment to Malaysia's Growing Energy Sector
PETRONAS Awards Long-Term Service Agreement to GE-SapuraKencana Joint Venture
KUALA LUMPUR, MALAYSIA — GE (NYSE: GE) has signed a new seven-year Global Frame Agreement with PETRONAS, Malaysia's leading oil and gas corporation. The agreement, which includes an option to renew for a further three years, calls for GE to supply gas turbine packages for PETRONAS' onshore and offshore projects in Malaysia and other countries around the world.
The signing follows the successful completion of the first frame agreement between GE and PETRONAS signed in 2009, under which GE provided advanced turbo-compression and turbo generation technology for PETRONAS' Liquefied National Gas (LNG) Train 9 project in Bintulu, Sarawak. Another major milestone was the award of PETRONAS' Floating LNG project, which is targeted to be the world's first offshore LNG plant. Designed to produce 1 million tons of LNG a year, the startup of the facility is scheduled for 2016.
"Through these collaborative agreements we achieve the benefits of a competitive CAPEX with lower total cost of ownership, world class equipment availability and reliability and superior support from GE," said Datuk Wan Zulkiflee Wan Ariffin, PETRONAS Chief Operating Officer and Executive Vice President, Downstream.
"GE is committed to reinforcing our strong, long-term partnership and collaboration with PETRONAS," said Lorenzo Simonelli, CEO of GE Oil Gas. "This new agreement allows us to be more closely aligned with PETRONAS so that we can better anticipate their technology needs and streamline the delivery process."
To optimize project deadlines and reduce costs, all terms and conditions under the agreement have been negotiated for the duration of the relationship, avoiding the need to negotiate on a project-by-project basis. The equipment supplied is also standardized whenever applicable so that specifications, technical solutions and documentation are shared, resulting in lower engineering costs and quality improvements.
At the signing ceremony, which took place on March 26, PETRONAS also awarded a long-term service contract to SapuraKencana GE Oil & Gas Services Sdn. Bhd., a joint venture company that GE created with SapuraKencana Berhad for the maintenance of GE turbomachinery. The formation of the joint venture underscores SapuraKencana and GE's ongoing commitment to building local service capabilities and to develop and train the next generation of engineering and service experts in Malaysia.
"Our new venture with GE will provide a wide range of services designed to enhance equipment efficiency and performance, including local field engineers, spare parts, maintenance and repairs on GE's fleet, which will ensure the highest reliability of the equipment for PETRONAS," said Tan Sri Dato' Seri Shahril Shamsuddin, President & Group CEO, SapuraKencana Petroleum Berhad.
The latest agreements build on the long relationship between GE and PETRONAS that began with collaboration on LNG more than 20 years ago. Underscoring Malaysia's importance to GE, the country is also home to GE Oil & Gas' new iCenter facility in Kuala Lumpur. A centerpiece of GE's industrial internet operations, the center provides customers with advanced remote monitoring and diagnostics services for GE's installed fleet of turbomachinery in the region. In total, GE is present in Malaysia in two major locations as well as several key customer sites, providing employment for more than 700 Malaysians in GE's aviation, transportation and energy businesses.
PETRONAS is a Fortune Global 500® company wholly-owned by the Government of Malaysia. Together with its subsidiaries and associated companies, PETRONAS is a fully integrated oil and gas corporation with global operations in exploration, development and production of crude oil and natural gas in Malaysia and abroad; liquefaction, sale and transportation of LNG; processing and transmission of natural gas and the sale of natural gas products including power generation; refining and marketing of petroleum products; manufacture and sale of petrochemical products; trading of crude oil, petroleum products and petrochemical products; and shipping and logistics relating to LNG, crude oil and petroleum products. For more information, please visit www.petronas.com.my.
About SapuraKencana Petroleum Bhd
SapuraKencana Petroleum Berhad (SapuraKencana) is one of the world's largest integrated oil and gas services and solutions provider. The Group's principal business include providing end-to-end solutions and services to the upstream petroleum industry, and covers activities such as installation of offshore pipelines and structures, fabrication of offshore structures, accommodation and support vessels, drilling vessels, hook-up and commissioning, topside maintenance services, underwater services, offshore geotechnical and geophysical services, project management, diving services, offshore support services, infrastructure and specialised steel fabrication works.
With a workforce of over 10,000 people, the Group's global presence can be seen in over 20 countries ranging from Malaysia and China to Australia, Middle East, America, Brazil and beyond. For more information, please visit www.sapurakencana.com.
About GE in Malaysia
GE's footprint in Malaysia began in 1975 with a sales and service center. Today, GE is present in several major locations (Kuala Lumpur headquarters and an aircraft engine maintenance, repair and overhaul Center of Excellence in Subang) as well as key customer sites throughout the country. All of GE's key businesses (Oil & Gas, Power & Water, Energy Management, Aviation, Healthcare, Transportation and Lighting) are present in Malaysia. The Kuala Lumpur office serves as the company's ASEAN corporate headquarters as well as the Asia-Pacific headquarters for GE Oil & Gas. GE is committed to contributing to the nation's sustainable development and prosperity and is investing in its future with advanced technology solutions and services as a trusted and committed local partner.
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
About GE Oil & Gas
GE Oil & Gas works on the things that matter in the oil and gas industry. In collaboration with our customers, we push the boundaries of technology to bring energy to the world. From extraction to transportation to end use, we address today's toughest challenges in order to fuel the future. Follow GE Oil & Gas on Twitter @GE_OilandGas.
Barbara Del Sala*
GE Oil & Gas
Phone: +39 055 4586980