GE and Petronas sign agreement to strengthen Malaysia’s energy sector

GE has signed a new seven-year Global Frame Agreement with Petronas, Malaysia’s leading oil and gas corporation.

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 other countries around the world.

The signing follows the successful completion of the first frame agreement between GE and PETRONAS signed in 2009, under which GE provided advanced turbo-compression and turbo generation technology for PETRONAS’ Liquefied National Gas 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.

“Through these collaborative agreements we achieve the benefits of a competitive CAPEX with lower total cost of ownership, world class equipment availability and reliability and superior support from GE,” said Datuk Wan Zulkiflee Wan Ariffin, PETRONAS Chief Operating Officer and Executive Vice President, Downstream.

“GE is committed to reinforcing our strong, long-term partnership and collaboration with PETRONAS,” said Lorenzo Simonelli, CEO of GE Oil & Gas. “This new agreement allows us to be more closely aligned with PETRONAS so that we can better anticipate their technology needs and streamline the delivery process.”

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.

At the signing ceremony, which took place on March 26, PETRONAS 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.

“Our new venture with GE will provide a wide range of services designed to enhance equipment efficiency and performance, including local field engineers, spare parts, maintenance and repairs on GE’s fleet, which will ensure the highest reliability of the equipment for PETRONAS,” said Tan Sri Dato’ Seri Shahril Shamsuddin, President & Group CEO, SapuraKencana Petroleum Berhad.

The latest agreements build on the long relationship between GE and PETRONAS that began with collaboration on LNG more than 20 years ago. Underscoring Malaysia’s importance to GE, the country is also home to GE Oil & Gas’ new iCenter facility in Kuala Lumpur. A centerpiece of GE’s industrial internet operations, the center provides customers with advanced remote monitoring and diagnostics services for GE’s installed fleet of turbomachinery in the region. In total, GE is present in Malaysia in two major locations as well as several key customer sites, providing employment for more than 700 Malaysians in GE’s aviation, transportation and energy businesses.