GE and REP Holding Sign Deal for Assembly of 28 Gas Turbines in Russia

ST. PETERSBURG, Russia (June 26, 2012) — GE and REP Holding, a Russian power engineering company, have signed a contract to assemble an additional 28 GE MS 5002E gas turbines at REPH’s Nevsky Zavod manufacturing facilities. The deal is the third to be covered under a technology transfer and licensing agreement signed by GE Oil & Gas and REPH in March 2008. A contract for the assembly of the first 19 units was signed in 2008, and a second contract for 10 units was signed last year.

The technology transfer and licensing agreement, which calls for the assembly of Ladoga 32 gas compressor units based on MS 5002E gas turbines in Russia, supports REPH’s plans to sell the Ladoga gas turbine technology in the country.

“Our agreement with GE underscores the importance of using highly efficient and proven technologies in the modernization of Russia’s energy infrastructure,” said Igor Starinkov, president of REPH.

Gas turbines that are to be manufactured in Russia by REP Holding will be used in Gazprom projects including the Southern Corridor gas pipeline, which provides gas to the South Stream natural gas pipeline and for the second thread of the Bovanenkovo-Ukhta gas pipeline. Russia plans to diversify its natural gas export routes to Europe through the South Stream pipeline, which will move gas through the Black Sea to southern European markets.

“The technology transfer and licensing agreement is an important step in our localization initiative,” said Andrey Chernobrovkin, operations and technology localization director for GE Oil & Gas. “It is at the core of our strategy to bring our businesses closer to where the company operates around the world.”

The MS 5002E technology is a significantly upgraded version of GE’s MS 5002 product line, and it offers high efficiency, low emissions and a proven service life to customers. The GE Frame 5 family of gas turbines has compiled more than 16 million operating hours worldwide.

A key benefit of the MS 5002E/Ladoga 32 turbine is that it can be fully serviced at the customer site, which is especially important under extremely harsh weather conditions and in remote areas of Russia where transporting equipment is costly and difficult.

In March 2012, GE announced that the first unit fully assembled under the initial contract had passed commissioning acceptance tests at REPH’s Nevsky Zavod facilities. It will be delivered to OAO Gazprom, which plans to use the technology to power compressor stations on the Bovanenkovo-Ukhta gas pipeline.

GE has been operating in Russia since the early 20th century, supplying equipment and services for the development of the country’s energy infrastructure. To date, more than 400 gas turbines, 65 steam turbines, 700 compressors and more than 600 units of other equipment produced by GE—including air coolers, capacitors, gas separators and pumps—have been installed in Russia and the CIS.

In 2010, GE opened its Energy Technology Center, a service center for installed generating equipment, in Kaluga oblast. In September 2011, GE, Inter RAO EES and ODK also established a joint venture to localize the production, sales and servicing of GE’s 6FA heavy-duty gas turbines in Rybinsk, Russia.