Moscow, October 17, 2006 - GE Energy (a unit of generall Electric, Co,), a global leader in power generation technologies, and OJSC "NPO Saturn", a leader in Russian machine building and a leading company in the field of jet engines in Russia, have announced their intentions to invest and cooperate in the heavy duty gas turbine industry. The parties are actively holding discussions with the goal to create a joint venture. Initially the parties intend to localize production of GE heavy duty gas turbines (in the range of 40 to 150MW) in Russia with the active participation of NPO Saturn.
GE Energy is also considering a potential strategic investment in the industrial gas turbine division of OJSC "NPO" Saturn".
Senior company executives Jeffrey Immelt, GE's Chairman and CEO and Yury Lastochkin Saturn's General Director have met and discussed the priorities of the long-term strategic partnership. According to Sergey Chuklinov, the deputy director of OJSC "NPO" Saturn", the negotiations opened the possibilities of a long-term cooperation, and relations between the parties are dynamically developing.
Upon the completion of the agreement, GE gas turbine technology would be licensed to the joint venture and the combination of Saturn's turbomachinery expertise and GE's global supply chain quality processes would make state-of-the-art gas turbine products available to customers in Russia.
The joint venture would be a long-term strategic partnership drawing equally on the strengths of GE and Saturn. GE would initially infuse technology, OJSC "NPO" Saturn would lead the partnership in ensuring conformity with Russia's rigorous industry standards and both parties would develop the JV's in-country supply base and manufacturing capability.
Initially the JV would bring GE's "B", "E" and "F" class heavy-duty gas turbines to Russia (sizes taken out as repetitive). "We have selected this range of gas turbines as we feel it best fits the broad needs of Russian industry today. These turbines offer substantial fuel flexibility and world class levels of availability, reliability, emissions and efficiency," said John Krenicki, President & CEO of GE Energy. "This is only a starting point in our relationship, and we intend to build in the flexibility to ensure that not only do we offer the competitive products needed for today, but also the larger gas turbines required for the future," he added.
"This is an exciting time to be in Russia, and we are pleased to work with Saturn, which brings so much industry experience. We look forward to a long and prosperous relationship, with both parties focused on delivering world class products to support Russia as it modernises and expands its energy industry," said Rod Christie, GE Energy Region Executive. "In accordance with official Russian data, we recognize the demand to install more than 20 gigawatts of new generation capacity in the next 5-10 years."
According to Sergey Chuklinov, "OSJC NPO Saturn" is completing the planned enterprise restructuring process with the goal to realize the future fulfillment of this international strategic partnership with GE and the technical upgrade of the enterprise to support the word class standards."
GE Energy has a long history of operation in Russia, dating back to the supply of steam turbine technology in the 1920's. The company recently has delivered projects in the power generation, district heating, combined heat & power and transmission & distributions sectors. Currently, GE has over 400 frame gas turbines operating in Oil & Gas applications in Russia and 100 gas engines in cogeneration projects, and is contracted to install gas turbines in various industrial and municipal applications. Last month GE Energy opened a new application centre in Moscow to support customers seeking to develop projects based on state-of-the-art technology. The facility is an important part of GE Energy's commitment to Russia.
Ron Pollett, President GE Russia/CIS, said "In the 1920s GE brought the latest technology of the age to assist in the State Electrification of Russia Program... and today we are proud to bring advanced technology to assist in the development of the power generation industry, working with the leader in this sphere -- OSJC "NPO Saturn."
GE Energy ( www.ge.com/energy) is one of the world's leading suppliers of power generation and energy delivery technologies, with 2005 revenue of $16.5 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.
GE is Imagination at Work - a diversified technology, media and financial services company focused on solving some of the world's toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and advanced materials, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. GE's 2005 revenues were $149.7 billion. In 2006, Fortune magazine for the sixth consecutive year named GE "America's Most Admired Company".
Scientific-production association "Saturn" is a multi-profile company specializing in the development, production and servicing of gas turbine products. "Saturn" works on all sectors of this industry and on all main segments: civil aircraft engines, gas turbine units ranging from 2.5 to 110 MW for power and heat generation, gas pumping units and marine gas turbine units. One of the strategic goals of NPO "Saturn"'s long-term development in view of the globalization of the international economy is the integration in the international market for gas turbine machinery and technology. This task is being achieved by executing joint projects and programs with the world leader in the field of development and manufacturing of the high-tech and science-intensive products (aircraft engines, energy equipment). While executing international programs, NPO "Saturn" adapts its marketing, design, production and servicing to the international standards, entirely changes its technology base and modernises its human resource practices. The most illustrative example of the NPO "Saturn cooperation is the program of creating the engine SaM 146 for the international market of regional aircraft with SNECMA (France) on a parity basis.
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