GE, Sasol Sign Service Agreement for New Power Project That Could Help Ease South Africas Energy Crisis

GE Energy announced today that it has signed a 15-year service agreement with South African oil and gas company Sasol. Under the agreement, GE Energy will provide around-the-clock monitoring and diagnostics of Sasol’s new power plant in Secunda, which could help ease South Africa’s energy crisis.

South Africa, which has Africa’s largest economy, is in the grip of an electricity supply crunch. Nationwide power cuts early this year affected large aluminum smelters and forced gold and platinum mines to temporarily shut down operations. The mines, a cornerstone of the economy, have since then seen production fall after operating with reduced power supplies.

The new 280-megawatt power plant, which will feature the first installation in South Africa of GE Energy’s Frame 9E gas turbines, will be located at the site of Sasol’s synthetic fuels facility in Secunda. The new plant will provide power for the production of synfuels, with excess electricity sold to Eskom, the state-owned utility.

“We’re very pleased to work with Sasol to help improve the energy supply in South Africa,” said Mark Digby, GE Energy Africa region executive. “As one of South Africa’s leaders in energy self-sufficiency, Sasol is committed to optimizing electricity consumption, for the good of both the company and the power needs of the country. The new Secunda plant will enable Sasol to increase its on-site power generation capacity while also reducing electricity demand on Eskom.”

The multi-million dollar contractual service agreement signed by GE Energy and Sasol covers all maintenance activities for the two GE Frame 9E gas turbines at the site over the 15-year period. The agreement also includes 24-hour-a-day monitoring and diagnostics of the gas turbines’ performance.

“The key benefit of this contract is to meet Sasol’s critical requirement for long-term reliability and plant performance, which will help Sasol to fulfill the conditions of its power purchase agreement with Eskom and assure a steady revenue stream,” said Digby. “Also, the improved plant operations and efficiencies to be achieved under the CSA will contribute to an improvement in emissions performance, ensuring that the facility can meet new reduction standards for industrial emissions.”

Initially, natural gas will be the fuel for the gas turbines, but future plans call for the use of low-BTU gas/flare gas, for a further reduction in emissions.

In addition to providing much-needed power to help alleviate South Africa’s energy shortfall, the Secunda plant will contribute to the local economy by creating new jobs and developing local talent. Sasol’s extensive experience in plant operations will be complemented by the gas turbine technology and expertise that GE will provide.

“Projects like the Secunda plant underscore our commitment to localize and expand our presence in key growth areas, such as South Africa,” said Digby. “Our broad portfolio of power generation options is well suited to help countries throughout the region meet their growing energy requirements.”

The new power plant project expands GE Energy’s existing relationship with Sasol; there are 22 GE steam turbines operating at the Secunda site.

Sasol is an integrated oil and gas company with substantial chemical interests. Based in South Africa and operating worldwide, Sasol is listed on the NYSE and JSE stock exchanges. The company is a leading provider of liquid transportation fuels in South Africa and a major international producer of chemicals.