Company Update (NYSE:GE): General Electric Company Oil & Gas Awarded Contract by BP for Third Natural Gas Liquefaction Train in Tangguh Expansion

General Electric Company (NYSE:GE) Oil & Gas division has been awarded a contract to supply gas turbine-driven compressors for a third natural gas liquefaction train for the Tangguh expansion having provided the original equipment for Trains 1 and 2 when the plant was first established. The order for the third train equipment has been placed with the GE Oil & Gas local business partner in Indonesia, PT IMECO Inter Sarana.

The Tangguh facility in the Papua Barat Province of Indonesia is being expanded to increase Liquefied Natural Gas (LNG) production by a further 3.8 million tons per annum (mtpa), bringing total plant capacity to 11.4 mtpa. Indonesia is one of the leading suppliers of LNG in the region and one of the fastest growing economies in the world. Energy consumption grew 3.9% in 2015, having nearly doubled over the last 15 years.[1] The majority of the gas produced by the third liquefaction train will provide energy for the Indonesian domestic market.

“The agreement to provide a third natural gas liquefaction train for Tangguh, nearly 15 years after the agreement to install the first two, is a reflection of the enduring performance of the existing plant machinery supplied by GE Oil & Gas,” said Rod Christie, President & CEO – Turbomachinery Solutions, GE Oil & Gas. “The equipment similarity to the other two LNG trains and the single source of the entire shaft line are key factors that will enable smooth and optimized operation and maintenance of the plant. GE is committed to strengthening our partnership with the plant by bringing technology enhancements and maintaining the highest levels of performance from our equipment.”

The components of the turbo compressor strings supplied by GE Oil & Gas will be manufactured at GE facilities in Greenville, South Carolina, USA and Florence, Italy, where the train will by assembled and load tested. It will be fully digitally-enabled, including advanced sensors and monitoring capabilities to allow continuous equipment care to safely maximize availability. The equipment will be ready for shipment to Indonesia in mid 2018.

The low pressure/medium pressure mixed refrigerant (MR) string will include one horizontally split centrifugal compressor for low- pressure MR and one barrel type centrifugal compressor for medium pressure MR, driven by a GE MS7001EA gas turbine and a helper/starter steam turbine. The propane/high pressure MR string will include one horizontally split centrifugal compressor with side streams for propane and one barrel centrifugal compressor for high pressure MR, driven by a GE MS7001EA gas turbine and a helper/starter steam turbine. GE Oil & Gas will also supply heat recovery steam generator for each of the two strings.

For the installation of the new LNG train, GE Oil & Gas will leverage its local footprint and global engineering capabilities to provide on-site support and develop local talent through training programs. GE Oil & Gas has been operating in Indonesia for over 70 years, providing its technology for many major projects. Today, GE Oil & Gas employs almost 200 employees across 3 sites. (Original Source)

Shares of General Electric closed yesterday at $29.85, down $0.64 or -2.10%. GE has a 1-year high of $33 and a 1-year low of $24.26. The stock’s 50-day moving average is $31.14 and its 200-day moving average is $30.73.

On the ratings front, GE stock has been the subject of a number of recent research reports. In a report issued on September 8, William Blair analyst Nicholas Heymann reiterated a Buy rating on GE, with a price target of $38, which implies an upside of 27% from current levels. Separately, on September 7, Bernstein Research’s Steven Winoker maintained a Hold rating on the stock .

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Nicholas Heymann and Steven Winoker have a total average return of 2.5% and 9.1% respectively. Heymann has a success rate of 57% and is ranked #1838 out of 4163 analysts, while Winoker has a success rate of 71% and is ranked #637.

The street is mostly Bullish on GE stock. Out of 12 analysts who cover the stock, 6 suggest a Buy rating , 4 suggest a Hold and 2 recommend to Sell the stock. The 12-month average price target assigned to the stock is $30.50, which represents a slight upside potential from current levels.


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