China’s Milestone West-to-East Pipeline, One of the World’s Largest Gas Transmission Projects, Again Turns to GE Oil & Gas Technology

Deal Worth $300 Million Uses Turbine Technology Developed by GE Aviation

FLORENCE, Italy - GE Oil & Gas technology has again been selected for one of the largest gas transmission projects in the world. GE will be the primary supplier of compression equipment for the western section of China’s second West-to-East Gas Pipeline. Since 2005, GE has been awarded bids by PetroChina worth over $600 million.

Longer than the Great Wall

The second West-to-East pipeline, will be part of the ongoing natural gas pipeline infrastructure in China that, when completed over the course of the next five to six years, will total approximately 20,000 kilometers. This second pipeline, 8,700 kilometers in length, will be 2,000 kilometers longer than the Great Wall. This monumental pipeline will snake through 13 provinces and autonomous regions, and will play a vital role in supporting the country’s energy security and economic development. Existing Chinese natural gas pipelines total 30,000 kilometers in length.

Providing Asia with vital energy infrastructure

This deal marks GE’s third major win to support the massive Chinese pipeline network. Total GE orders are expected to be more than $600 million. Previously, the company provided equipment for the expansion of the first West-to-East pipeline project, and for two stations (including the head one) of the second West-to-East pipeline project.

In addition to the West-to-East pipeline project, GE has been an equipment supplier for Sinopec’s Sichuan-to-East China pipeline, which transports natural gas from the Puguang field in Sichuan to Shanghai in China’s eastern region. Sinopec (China Petroleum and Chemical Corp.) is China’s second largest oil and gas producer.

“Our latest win underscores GE’s role as a major supplier of pipeline compression technology for this vital region of the world,” said Claudi Santiago, president and CEO of GE Oil & Gas. “Inclusive of the western section of West-to-East Gas Pipeline, since 2005, we have supplied nearly 60 turbocompressor trains for pipeline infrastructure projects across Asia.”

Technology and speed make the difference

As part of a pipeline boosting station, GE turbocompressor technology keeps gas flowing from remote regions of Northwestern China, near the Kazakhstan border, to parts of Eastern China such as Shanghai, where the gas is urgently needed to support dynamic economic growth.

Santiago added, “As we continue to support the development of China’s pipeline infrastructure, we will build upon lessons learned from our previous projects in the country.”

To meet China’s soaring energy needs, all phases of the project have faced tight construction schedules, making on-time and complete delivery of equipment critical. In response, GE Oil & Gas has redesigned the packaging of the turbocompressor units and implemented simplified installation and commissioning procedures to reduce installation time and site activities.

In late 2008, GE Oil & Gas established a new installation record by completing work more than two months ahead of schedule for two of the compression stations involved in the extension of the first West-to-East pipeline. Installations at both the Yanchuan and Dingyuan compressor stations were completed more than 40 percent faster than previous installations on the pipeline.

About the pipeline

The developer and owner of the West-to-East pipeline, PetroChina, is China’s leading oil and gas producer and distributor. The second West-to-East project features pipes with 48-inch diameters, some of the largest in the industry. When completed, it will add 30 billion cubic meters of capacity of natural gas transmission per year, half of China’s annual total natural gas production, enabling 400 million people along the route to access natural gas. This will bring China’s primary energy consumption rate of natural gas to 5 percent, up from 3.5 percent. The total flow capacity is equivalent to 30 percent of total yearly gas consumption in the United Kingdom. The compression stations in phase two of the second West-to-East Gas Pipeline are expected to go into commercial operation between the second half of 2010 and the end of 2011.

About GE’s technology

GE Oil & Gas will supply PGT25+ gas turbines and PCL 800 compressors for seven pipeline compression stations, as well as electric motor-driven units for another three stations. Equipment will be manufactured at GE Oil & Gas facilities in Florence, Italy, and GE facilities in Cincinnati, Ohio.

Based on aeroderivative gas turbine technology initially developed by GE’s Aviation business, the PGT25+ is an example of technology sharing among GE business units.

“This synergy is a major benefit that GE can bring to customers in a wide range of industries,” noted Santiago.

GE Oil & Gas in China

GE Oil & Gas has been active in China for more than 30 years and has a strong presence in the refinery and petrochemical sectors of the country’s oil and gas business. With the growing demand for natural gas transmission, as illustrated by the two West-to-East pipeline projects, GE Oil & Gas greatly expanded its role as a supplier of pipeline compression equipment in the country and region.

About GE Oil & Gas

GE Oil & Gas (www.ge.com/oilandgas) is a world leader in advanced technology equipment and services for all segments of the oil and gas industry, offering complete solutions for production, LNG, transportation, storage, refineries, and petrochemicals. It also provides pipeline integrity solutions including software and asset management. With its acquisition of VetcoGray and Hydril Pressure Control, GE Oil & Gas now offers additional products, systems and services for drilling, completion and production within onshore, offshore and subsea applications.

About GE

GE is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company’s Web site at http://www.ge.com. GE is Imagination at Work.