SEOUL, KOREA---October 13, 2008---South Korean energy producer West Sea Power Co., Ltd., wholly-owned by Macquarie Korea Opportunities Fund, has signed a 17-year contractual service agreement (CSA) with GE Energy. The deal is expected to strengthen the reliability of West Sea Power's plant operations and improve long-term power output.
The CSA, which went into effect in October, will focus on managing and implementing all gas turbine maintenance activities, from minor to major outages. The agreement also will incorporate new technology upgrades that will deliver enhanced energy efficiency and power output.
The service agreement covers two of GE Energy's gas turbines operating at the 92-megawatt power plant, located at the Daesan Industrial Complex, about 130 kilometers south of Seoul. Under a power purchase agreement, the plant supplies electrical power, steam and exhaust gas to Samsung Total Petrochemicals, Ltd.
West Sea Power is a key asset within the Macquarie Korea Opportunities Fund, which invests in Korean infrastructure assets that have reliable cash flows and are strategically positioned in their target markets.
As a result of the upgrades that will be performed, both plant output and efficiency are expected to be improved. Further planned upgrades within the next two years are primarily focused on emissions mitigation. This will lead to a significant reduction in NOx emissions, enabling the facility to meet new standards for industrial emissions that Korea is expected to enact in the near future, ahead of emission reduction obligations in the next phase of the Kyoto Protocol on climate change.
"By signing the service agreement, West Sea Power is collaborating with GE Energy to deliver improvements in performance levels for its utility plant," said Woonsik HA, CEO of GE Energy, Korea. "High reliability ensures steady revenue and guards against unplanned disruptions that could jeopardize West Sea Power's ability to meet the needs of its customer."
An interesting feature of the West Sea Power facility is its use of industrial process gas from the host petrochemical facility to power the plant, rather than relying on external oil and gas sources. One of the GE gas turbines at the site---a Frame 6 unit---operates continuously on high hydrogen fuel gas at 70%+ content levels; while the second unit, a Frame 5P, uses a high methane gas. The CSA provides the flexibility to fully manage the continued use of such alternative fuels, enabling West Sea Power to support the South Korean government's industrial energy diversification program.
"Over the course of the CSA, factors such as improved power and exhaust gas generation, increased plant efficiencies and longer operating hours will be beneficial for West Sea Power and its customer," HA added. "This project is a great example of an owner/operator upgrading an existing power plant to respond to higher fuel prices and preparing for restrictions on carbon, which are likely to come over the next few years."
"West Sea Power entered into the CSA with GE Energy as part of our goal to continuously improve the long-term reliability and efficiency of our gas turbines. We are counting on GE Energy to help us achieve these goals, which will be beneficial for West Sea Power." said Oliver Cruz, CEO of West Sea Power.
West Sea Power purchased the power plant at the Daesan site in February 2007 and since then GE Energy has provided gas turbine replacement parts, parts repairs and outage maintenance services for the facility.
About GE Energy
GE Energy (www.ge.com/energy) is one of the world's leading suppliers of power generation and energy delivery technologies, with 2007 revenue of $22 billion. Based in Atlanta, Georgia, GE Energy works in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels. Numerous GE Energy products are certified under ecomagination, GE's corporate-wide initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges.
About GE
GE (NYSE:GE) is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. GE is Imagination at Work. For more information, visit the company's Web site at http://www.ge.com.
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