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GE and partners sign $5.5bn agreements in energy and aviation

Released at: 15:34, 01/06/2017

GE and partners sign $5.5bn agreements in energy and aviation

PetroVietnam's CEO Mr. Nguyen Vu Truong Son signs agreements with GE President & CEO Mr. Steve Bolze. Photo: GE

Agreements to support the development of Vietnam's energy and aviation sectors signed on May 31 in the US.

by Quang Huy

The US’s General Electric (GE) announced the signing of agreements on May 31 valued at more than $2 billion to support the development of Vietnam’s energy sector as well as agreements valued at over $3.58 billion for new CFM International aircraft engines and maintenance support, the largest combined set of transactions for GE in Vietnam in the company’s history.

The energy agreements, signed in the presence of Prime Minister Nguyen Xuan Phuc and US Secretary of Commerce Wilbur Ross during the former’s visit to the US, include a memorandum of understanding (MoU) to co-develop 1500 MW new gas power plants and a Joint Development Agreement (JDA) on the 800 MW Phu Cuong Wind Farm in the Mekong Delta’s Soc Trang province.

Photo: GE

JDA for 800 MW Phu Cuong Wind Farm

Together with its development partners, International Mainstream Renewable Power and the Phu Cuong Group, GE signed a JDA on developing the 800 MW Phu Cuong Wind Farm in Soc Trang province. The project is in support of the 1 GW initiative that GE and the Ministry of Industry and Trade signed in May 2016.

The wind farm is expected to be the largest in Vietnam and will be completed in two phases, with the first phase of approximately 200 MW expected to reach a financial close in 2018. GE Renewable Energy has been earmarked as the equipment provider for both phases.

“Today’s agreement is central to Mainstream’s strategic focus of bringing large-scale, low-cost renewable energy to high-growth markets across Asia, Africa as well as South and Central America,” said Mainstream’s CEO Mr. Andy Kinsella. “We look forward to working closely with our partners in bringing this project to fruition. This agreement in Vietnam marks Mainstream’s first large-scale investment in Asia, following the establishment of gigawatt-scale portfolios in South America and Africa.”

For his part, “producing electricity from wind energy is a new market in Vietnam,” Deputy General Manager of the Phu Cuong Group, Mr. Pham Quoc Anh, said. “As one of the pioneers, Phu Cuong Group wants to work with strong partners with the capacity to ensure project quality. GE and Mainstream are the best partners in this area. We are confident that this collaboration will bring success to the project, contributing to the development of green power in Vietnam.”

MoU on advanced combined cycle power plants

On the same day, GE and the Vietnam Oil & Gas Group (PetroVietnam) signed an MoU on cooperating in the development of two 750 MW combined cycle gas turbine power plants - Mien Trung I & II - using the Blue Whale Gas Field, which is the largest gas project in Vietnam, with an estimated 150 billion cu m of reserves. The Mien Trung I Plant is expected to begin operations in 2023 and Mien Trung II in 2024. GE will work with PetroVietnam to identify the latest technology solutions to provide greater efficiency, lower fuel consumption, and fewer emissions.

Vietjet Air engine order and services contract

CFM International, a joint venture between GE and Safran Aircraft Engines, signed two new agreements with Vietjet Air, including a 12-year maintenance support contract for the airline’s 215 LEAP-1B engines ordered in 2016. Under the terms of the agreement, valued at $3 billion at list price, CFM guarantees maintenance costs for the all Vietjet’s LEAP-1B engines that will power its fleet of 100 Boeing 737 MAX aircraft on a dollar per engine flight hour basis. The agreements will advance industrial technology solutions across multiple sectors and support economic growth and jobs in both countries.

“Through a strong local presence, we have built long-term partnerships with our customers in Vietnam to meet the country’s unique needs,” said Mr. Wouter Van Wersch, President and CEO of GE ASEAN. “Our most recent deals, which will support our US and global manufacturing operations, further reinforce the important economic, trade and investment partnership between Vietnam and the US.”

GE has been active in Vietnam for 24 years and provides more than 30 per cent of Vietnam’s installed base power generation.

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