GE Awarded Chevron Contract To Deliver 3 Gas Turbine Modules

The General Electric LM2500 gas turbine engine

Energy giant Chevron Corp. (CVX) awarded General Electric Co. (GE) a contract in the Gulf of Mexico, in which the conglomerate will provide three customized aeroderivative gas turbine-generator modules.

The modules will provide electric power for a new Chevron floating production unit that will produce oil and gas from the Jack and St. Malo fields in the Gulf of Mexico, which are about 280 miles south of New Orleans and at a water depth of about 7,000 feet. GE declined to disclose the value of the contract.

GE’s oil and gas division has had success in a number of markets with supplying equipment to oil-and-gas companies, including for projects offshore in Angola, Brazil, China and Norway. The gas turbines that Chevron ordered are expected to be shipped in December, with commercial startup planned by early 2013.

According to GE, Chevron’s initial development of the fields will be comprised of three subsea centers tied back to a hub production facility with an initial capacity of 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day.

Chevron initially offered details of development of the Jack and St. Malo project in October, when it said initial development of the project would require a nearly $7.5 billion investment. The company was one of the first oil companies to receive government approval to drill back in the Gulf’s deep water after last year’s massive BP PLC (BP, BP.LN) oil spill.

GE’s shares were down 14 cents to $19.06 in recent trading.

-By John Kell, Dow Jones Newswires

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