Algeria gas deal biggest in GE Power’s history

New gasfield services agreement with North African country will see the subsidiary of the US conglomerate GE provide long-term operations and maintenance support.

Gas storage tanks south-east of Algiers, Algeria. GE Power has signed the biggest deal in its history for operations and maintenance services for the state-owned Sonelgaz. EPA / STR

GE has signed an agreement with Algeria’s Sonelgaz SPE, a subsidiary of the state-owned Sonelgaz, in what the US firm said is the largest services contract in GE Power’s history.

While the value of the agreement was not revealed, GE said it will help to save up to US$2 billion in gas that can sold in international markets. It will lead the digital industrial transformation of Sonelgaz’s plants throughout Algeria and strengthen local industrial capabilities, GE said.

The deal includes long-term operations and maintenance (O&M) services for 10 Sonelgaz plants throughout the country that generate 11 gigawatts of power, a capacity building system for energy efficiency that will deliver more than 420 megawatts of additional power with greater fuel efficiency, and the introduction of GE’s digital solutions, it said.

“The Algerian government and Sonelgaz have a clear vision for the future of the country’s power sector,” said Steve Bolze, the president and chief executive of GE Power. “The emphasis on building industrial capacity and the focus on the digital transformation of power-plant assets are long-term investments in the future of the country.”

The agreement was announced at the GE Algeria Turbines (GEAT) plant in Ain Yagout, a joint venture created in 2014 by GE and Sonelgaz, which will manufacture gas turbines and steam turbines for Sonelgaz’s power generation needs.

The Ain Yagout site in Batna, covering an area of 20 hectares, will annually be able to manufacture equipment with the capacity to generate up to 1.5 GW of power.

GEAT will employ between 300 and 350 people and its construction will create about 600 additional indirect jobs. It will also offer opportunities to develop a local supply chain, GE said.

Activities began at GEAT a few months ago after Sonelgaz placed the first order of four gas turbines and 2 steam turbines. The equipment will be delivered between 2019 and 2020 and will be connected to the national grid by 2021.

“The government’s top priority is to strengthen power generation in the country through a highly efficient, sustainable and productive infrastructure,” said the Algerian minister of energy, Noureddine Boutarfa. The new GEAT facility … is a strong value-add to the economy as they will boost our exports, enhance the efficiency of our power plants and create new jobs for Algerian youth.

GE will work with Algerian Engineering Services Company’s (Algesco) engineers to repair its 9FA gas turbine technology locally, creating more than 100 new engineering jobs and building a local centre of excellence for turbine repairs. First established in 1993, Algesco is a joint venture of GE with Sonatrach and Sonelgaz. GE said it will also train up to 1,000 Sonelgaz field engineers and operators on industry best practices to strengthen their expertise and competitiveness, which will potentially enable Sonelgaz to collaborate with GE on future O&M projects across Africa.

Today, GE Power’s technologies generate nearly 70 per cent of the electricity distributed across Algeria.

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