General Electric Co. (NYSE: GE) announced three new contracts to the public on Monday that will help supply the growing energy needs in Algeria.
The North African country has been looking to increase its generation capacity as its annual rate of energy demand continues to grow an average 14 percent every year. According to Reuters, it will rise from 12 gigawatts (GW) of power to 20 GW by 2017.
GE will supply gas turbines for six of the nation's planned combined-cycle power plants, and it will also supply three other projects. In total, these will add almost 9 GW of electricity to Algeria's power grid.
Algeria’s government is steadfastly committed to boosting energy capacity, and by bringing GE in, it proves it is ready to handle the growth ahead.
This will be one of GE’s largest power-plant orders ever – $2.7 billion in power equipment to a unit of Sonelgaz, Algeria’s national electricity and gas company.
The Fairfield, Connecticut energy giant will provide Algeria with the industry’s best technology and services to ensure it meets all of its growing energy needs.
All three of these contracts are held with Societe Algerienne de Production de l’Electricite (SPE Spa), the unit of Algerian national electricity and gas company Sonelgaz Group that will head the Algerian side of these projects.
The largest of the three contracts, worth $1.9 billion, will be for the six combined-cycle power plants. This alone will give Algeria an added 8 GW in generating capacity, or an increase of 70 percent.
The two additional contracts will address the more pressing energy needs for this summer’s peak demand and for the immediate future, and it will be comprised of two fast-track projects.
The fast-track projects will add 528 megawatts (MW) of capacity. This agreement, according to RTT News, is in association with a contract previously signed by a consortium of GE and Power Projects Company, a subsidiary of METKA (OTCMKTS: MTKAF), with SPE Spa. It will see GE deliver advanced aeroderiviative gas turbines to Algeria to support its peak demand for its 2013 summer months.
The third contract will be the construction of a new simple-cycle power plant that adds 370 MW to the electricity grid. GE will supply equipment worth $150 million to power the Hassi R’mel simple-cycle gas turbine plant.
Today, Algeria has 16 units available with the power to generate 352 MW. Eight more units are set to join the grid sometime in 2013, providing an additional 176 MW of poewr
The nine Sonelgaz power plants GE will attend to are located in northern Algeria and will begin simple-cycle duties by 2015, with fully operational combined-cycle abilities coming online in 2017.
The OPEC nation will prove to be an important asset to Europe's energy supply as we head into the future.
It wasn’t long ago that Algeria was embroiled in civil war that went on for years, but it seems that it is all behind it now. The nation is growing stronger every year, in large part due to strong oil and natural gas exports through the 2000s.
And now Algeria seems to be set for its next phase of growth, focusing on its power grid and building strong relations with international companies like GE.
Algeria still faces problems both economically and socially, but with new business comes great opportunity. These new contracts will also work to lower a high unemployment rate.
In addition to these three new contracts revealed Monday, GE is also planning another joint venture with Sonelgaz to build a factory that would manufacture 2 GW of equipment each year, providing hundreds of jobs, Reuters reports.
GE shares are stronger than ever right now, gaining 12.5 percent this year to last Friday’s close. The company has struggled mightily over the past decade, but it seems to grow stronger every day with moves like the one from Monday.
Get set for a resurgence of America’s GE and a stock that could outperform the market.
If you liked this article, you may also enjoy: