GE Power, a division of GE (NYSE: GE) today announced that it has signed a purchase agreement to acquire the Heat Recovery Steam Generator (HRSG) business of Doosan Engineering & Construction (011160 KOSPI) for $250 million.
The Doosan Engineering & Construction HRSG acquisition will help GE Power meet the growing demand for its combined cycle power plant solutions, which utilise HRSG technology, and continue to leverage its expanded customer offerings.
HRSG technology is a critical component of a combined cycle power plant. Capturing the exhaust heat from the gas turbine, the water is converted into steam, which is then used to drive a steam turbine to produce additional power output. HRSG technology is critical to the efficiency of a combined cycle plant and can help generate up to 33 per cent of the power output of the plant.
“With the Alstom acquisition, we are now offering full power plant solutions and seeing an even greater demand for our highest efficiency HA heavy duty gas turbine plants,” said Steve Bolze, president and CEO of GE Power. “The Doosan Engineering & Construction HRSG acquisition will help us meet our forecasted growth and better manage costs by increasing our global manufacturing capacity and further complementing our existing HRSG technology. We’re also gaining a talent pool that is one of the best in the world.”
Doosan Engineering & Construction HRSG – Korean-based world leader in engineering, equipment and infrastructure – has been a trusted and reliable supplier to both GE and Alstom, and has a long and proven history as an Alstom licensee. Upon completion of the sale, Doosan Engineering & Construction HSRG will be integrated into GE Power’s Gas Power Systems business, which already includes Alstom’s legacy HRSG business.
“We’re seeing HRSG demand that is more than double historical averages,” said Joe Mastrangelo, president and CEO of GE Gas Power Systems. “Our investment in Doosan Engineering & Construction HRSG will bring us cost effective, vertically integrated manufacturing and engineering capacity and cost effective, vertically integrated manufacturing that will allow us to be stronger, faster, and better as we ramp to meet customers’ needs.”
Doosan has three advanced manufacturing facilities, including one in Korea and two in Vietnam. In operation since 1977, Doosan Engineering & Construction HRSG currently has more than 1,400 employees specialising in engineering, project management and manufacturing. Doosan Engineering & Construction HRSG has been a supplier to GE and other industry leaders, and has been a long-term licensee of Alstom technology until 2007.
The HRSG division manufactures and distributes HRSGs to combined cycle power plants at home and abroad. The division has successfully installed and operated HRSGs not only for domestic combined cycle power plants in Boryeong, Busan and Incheon but also for combined cycle power plants in various continents around the world, including Europe, Asia and Africa.
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In Vietnam, GE has been supplying technologies and services to key power projects. GE signed its first heavy duty gas turbines for Phu My 2-1 power plant followed by some additional equipment contracts for Phu My 4, Phu My 2-1 add on, Phu My 2-1 ext add on and Nhon Trach 1 combined cycle power plant since 1995.
GE also supplied heavy duty gas turbine and steam turbine for Phu My 2-2, a combined cycle power plant of 715 megawatt capacity gas fired in the southern Ba Ria – Vung Tau, which started commercial operation in 2005. In 2014, GE was selected to supply 02 F-class turbines (77MW each) for Nghi Son refinery and petrochemical complex.
In 2015, GE signed contract to supply two largest circulating fluidised bed boiler (CFB) to Thang Long power plant, providing clean coal power to the Vietnam grid. Vietnam’s state-run oil and gas group PetroVietnam has selected two sets of high-efficiency steam turbines and generators from GE for the new Long Phu 1 coal-fired thermal power plant in the Mekong Delta province of Soc Trang. Once online, the plant can generate 1,200MW, the equivalent power needed to supply approximately four million Vietnamese homes.
Recently, GE’s Power Services business announced the upgrading of GT13E2 MXL2 gas turbine at Phu My power plant in Vietnam which marks GE’s first services order after acquiring Alstom’s power and grid businesses.