KUALA LUMPUR, Malaysia – GE (NYSE: GE) has signed a new seven-year global frame agreement with Petronas. The agreement, which includes an option to renew for a further three years, calls for GE to supply gas turbine packages for Petronas’ onshore and offshore projects in Malaysia and elsewhere.
The signing follows the first frame agreement between GE and Petronas signed in 2009, under which GE provided advanced turbo-compression and turbo generation technology for Petronas’ LNG Train 9 project in Bintulu, Sarawak. Another major milestone was the award of Petronas’ floating LNG project, which is targeted to be the world’s first offshore LNG plant. Designed to produce 1 million tons of LNG a year, the startup of the facility is scheduled for 2016.
To optimize project deadlines and reduce costs, all terms and conditions under the agreement have been negotiated for the duration of the relationship, avoiding the need to negotiate on a project-by-project basis. The equipment supplied is also standardized whenever applicable so that specifications, technical solutions and documentation are shared, resulting in lower engineering costs and quality improvements.
Petronas has also awarded a long-term service contract to SapuraKencana GE Oil & Gas Services Sdn. Bhd., a joint venture company that GE created with SapuraKencana Berhad for the maintenance of GE turbomachinery. The formation of the joint venture underscores SapuraKencana and GE’s ongoing commitment to building local service capabilities and to develop and train the next generation of engineering and service experts in Malaysia.