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Russia's Inter RAO says seeks gas turbines deal with GE by October

Stock MarketsMar 30, 2019 07:30AM ET
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© Reuters. Inter RAO CEO Kovalchuk looks on before meeting of Russian President Putin and Turkish President Erdogan with Russian and Turkish entrepreneurs in St. Petersburg

KRASNOYARSK, Russia (Reuters) - The chief executive of Russia's Inter RAO said on Saturday the energy holding hoped to reach a deal with General Electric (NYSE:GE) Co by October to produce powerful gas turbines in Russia, either as a joint venture or by buying a license from GE.

Russia, which does not currently produce mid- or high-power gas-fired power turbines, recently launched a 1.9 trillion rouble ($29 billion) program to modernize a quarter of its power generation, or 41 gigawatt of coal- and gas-based plants.

It is seen as a rare opportunity for Western producers amid falling global demand for gas turbines in recent years, but Moscow has said investors must only use fully localised -- domestically produced -- equipment as part of a local content push.

Inter RAO CEO Boris Kovalchuk said the modernization program would open a large market for GE for 10 years.

"We hope to reach all the agreements with them within half a year," Kovalchuk told reporters during a conference in the Siberian city of Krasnoyarsk.

A plant jointly owned by Inter RAO, GE and Russian state conglomerate Rostec produces 77-megawatt turbines in Russia's central region of Yaroslavl.

The ongoing talks between GE and Inter RAO are for the local production of 185-195 megawatt turbines. Inter RAO may purchase Rostec's stake in the plant as part of the deal with GE, Kovalchuk added.

A joint venture between Siemens and Russian firm Power Machines is already producing turbines in Russia. Siemens, which owns a 65-percent stake in the venture, has pledged to raise the level of localization in the production process.

Russian state-controlled firms -- Rostec, Rosnano and Inter RAO -- have been trying to create their own gas turbine production but their prototype project failed testing, sources, familiar with the matter, told Reuters a year ago.

Kovalchuk said on Saturday that the project was continuing, and that Inter RAO had passed the second turbine to the project's operator for improvement.

Russia's Inter RAO says seeks gas turbines deal with GE by October
 

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