General Electric Company (NYSE: GE) Receives $1 Billion Contract from Saudi Electricity Company

Just recently, General Electric Company (NYSE: GE) has announced that it was able to receive a contract amounting to approximately $1 billion from Saudi Electricity Company. The mentioned contract consists of construction, engineering, as well as gas turbine services for the Waad Al Shamal combined-cycle plant. The mentioned power plant is expected to be completed within 48 months. Once this combined-cycle power plant is built, it will help with the phosphate mining operation in the area.

According to reports, General Electric will provide Saudi Electricity Company with 4 heavy duty and advanced GE 7F.05 gas turbines for this project, as well as a steam turbine. These heavy duty turbines will involve solar innovation technology. GE Company has stated that the combined-cycle power plant will be able to generate about 1,390 megawatt electricity, which may serve around 500,000 residences in the locality.

According to the CEO of Saudi Electricity Company Ziyad Al Shiha, he intends to continue boosting the power infrastructure of Saudi. He said that the Waad Al Shamal project will not only produce energy that can be used by domestic homes, but instead, it can also produce jobs in the industrial sector. With regards to the award provision to GE, the Saudi Electricity Company CEO stated that, “By awarding the contract to GE, we are further building on the long-term partnership we have with GE, with a focus on advanced technologies.”

During the early parts of the previous year, General Electric Company had signed an MoU with Saudi Electricity Company to establish a joint venture through which the maintenance and operations could be improved. Based on the terms, GE will not only expand its updated technology, but the company will also train staff from Saudi Electricity Company to take care of its operations and maintenance services.

The Power and Water Segment of GE can be regarded as the biggest power generation portfolio in the world. During the third quarter of the fiscal year 2015, this segment of General Electric was the second major contributor in net profit. As the company attempts to strengthen and improve its portfolio, GE continues to implement a strategy of vertical integration. GE’s push for this strategy is evident in the recent acquisitions of the power and grid business of Alstom and Metem Corporation.

Moreover, in order to provide cost effective and up-to-date technology, GE Company has introduced just recently the 9HA heavy duty gas turbine. The mentioned gas turbine features a simplified technology with air cooled architecture. Based on the statement of General Electric, the 9HA does not only have the ability to maintain the lowest life cycle per megawatt, but rather, this turbine can also aid in the cost effective conversion of fuel to electricity.

Indeed, the Power and Water Segment of the company attracts demand in the global scale. During the previous week, this segment of GE was able to obtain 43 orders for its wind turbines. According to the company, this is its biggest French onshore deal. The mentioned contract involves the installation of 120 megawatt turbines within a span of 2 years, together with a full service agreement.