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General Electric's Gas Turbines to Power Nigeria Refinery

Zacks Equity Research

General Electric Company's (GE) distributed power business recently announced the supply of three 25-megawatt (MW) TM2500+ aeroderivative gas turbines to GEL Utility Limited in Nigeria. GEL Utility Limited, a part of Genesis Electricity, will utilize the engines for the Nigerian National Petroleum Corporation’s (:NNPC) state oil refinery at Port Harcourt. General Electric’s sales and project finance group will arrange the financing for the project.

As part of the effort to overcome local grid outages, the TM2500+ gas turbines will provide both baseload and backup power to support the refinery operations. The system can be used for utilities with permanent power installations and backup power such as natural disaster relief efforts, plant shutdowns and equipment.

These gas turbines are likely to address the challenges faced by Port Harcourt Refining Company (:PHRC) and provide uninterrupted power flow to the refinery while ensuring its long-term viability. To date, chronic grid outages have reduced PHRC’s output to 30% of its maximum capacity.

This project will play a vital role in getting the refinery back into full operation, enabling Nigeria to drastically reduce its refined fuel products import. This will also help the refinery to maintain a reliable energy supply and thereby increase its productivity.

General Electric is one of the most diversified technologies and financial service corporations in the world. The company’s segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital. The GE Power & Water segment produces gas, steam and aero derivative turbines; generators; combined cycle systems; and renewable energy solutions. The segment also offers water treatment services and equipment.

General Electric currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look include Macquarie Infrastructure Company LLC (MIC) and Noble Group Ltd. (NOBGY), both carrying a Zacks Rank #1 (Strong Buy) and Federal Signal Corp. (FSS), carrying a Zacks Rank #2 (Buy).

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