General Electric has won a contract worth nearly $1bn to supply Algeria with gas turbines for power stations in the latest sign of the growing popularity of gas-fired power generation.
The deal also shows how gas-producing countries are investing in power stations to serve the domestic market, increasing local demand for their gas.
Algeria is one of the biggest gas exporters to the European Union, along with Russia and Norway.
GE’s contract is for a new 1,200MW combined-cycle gas turbine power station, one of the biggest in the region, that is being built by Iberdrola, the Spanish energy company. It has also won the contract to provide maintenance and parts for the next 20 years.
The plant will raise Algeria’s power generation capacity by 18 per cent.
Ricardo Cordoba, the head of GE Energy in Europe, said: “Algeria is a country with a very young population, and its demographics mean it is a growing economy that will need more and more power.”
Algeria plans to raise its power generation capacity from 7,900MW to 14,000MW by 2010.
Douadji Kinane, chief executive of Sonelgaz Manufacturing of Algeria, said: “The benefits of this long-term agreement include plants with better efficiency and reliability, controlled costs spending for the maintenance, and is made possible due to the trust we have in our business relationship and in the latest technologies developed by GE.”
GE has a long relationship with the country, having supplied 70 per cent of all its gas turbines.
Mr Cordoba said: “We have done well to be recognised again by this very important customer. Algeria has a very strong relationship with the Europeans, so for us it is extremely important to be recognised there as a European business.”
The turbines for the plant will be manufactured at GE’s plant in Belfort, France.
GE expects that the European market, plus North Africa, will need to install about 30,000MW of new generation capacity every year for the next two decades, and over the next few years it believes about half of that construction will be in new CCGT plants.
Mr Cordoba said: “I am totally convinced that there will not be one answer for the future of power generation. Combined-cycle gas turbines are today the most important part of the market: their installation costs are among the lowest, and their emissions are much lower compared with coal-fired power stations.”
Of the rest, most will be renewables, particularly on-shore wind, and some will be coal and other sources, he believes.