Rail figures big in GE’s Russian market endeavors

Written by William C. Vantuono, Editor-in-Chief

A strategic business plan signed by General Electric and Russian locomotive and car builder Transmashholding for a diesel powerplant joint venture is an important component of a plan for GE to invest $1 billion in Russia’s oil and gas, power and transportation industries by 2020.

GE announced it will work with Russian businesses to develop up to $1 billion in sourcing opportunities by 2020 “to better meet its global manufacturing needs by capitalizing on the increased competitiveness of Russian fabrication, forging and casting,” GE said. “The company is currently working on several key infrastructure projects with Russian producers that meet GE quality and safety standards.”

GE and Transmashholding (TMH), Russia’s largest rail equipment producer, signed a strategic business plan providing for the launch of a 50-50 joint venture, pending final regulatory approvals, to localize manufacturing of GEVO diesel engines at a new facility in Penza, Russia. The project is aimed at addressing the locomotive needs of Russian Railways, as well as providing engine solutions for marine vessels and distributed power applications.

The companies plan to invest more than $70 million in the plant and related equipment, training and technology. The GEVO engines to be produced at the new facility “will incorporate advanced GE technologies to lower life-cycle operating costs, while increasing efficiency, reliability, ease of maintenance and time between overhauls,” GE said. The agreement envisages initial production of up to 250 engines per year in the 2,900–4,700 kW class, with the potential to expand the venture’s production capacity and product portfolio according to future market demand. The companies also agreed that a priority goal for the joint venture will be identifying export opportunities for its products.

Andrey Bokarev, Transmashholding President, said: “Transmashholding has high expectations for the future of this joint project with GE to develop and produce state-of-the-art diesel engines. It will significantly expand our expertise and the range of products we offer to the market. In combination with our existing solutions, we will be able to offer engines to our customers that precisely meet their needs. It’s particularly noteworthy that the new venture will produce engines not only for the Russian market, but also for export.”

Jeff Immelt, GE Chairman and CEO, said: “We continue to see long-term development opportunities in Russia, including in sourcing from Russian manufacturers for our global businesses. Today, we are also pleased to be strengthening our partnerships with Rosneft (Russia’s largest oil and gas company) and Transmashholding. This is a great example of GE working with leading Russian companies to tackle some of the region’s most technically intensive projects.”

In marine, GE and Rosneft will proceed with preparations for joint work at an industrial shipbuilding cluster in Vladivostok. GE, Rosneft and Transmashholding signed a Letter of Intent providing for the local production of GE V250 marine diesel engines by the GE-Transmashholding JV in Penza. In oil and gas, GE and Rosneft will further explore development plans for a facility in Murmansk, Russia to locally assemble GE oil and gas equipment to support Rosneft’s production activities. GE and Rosneft’s subsidiary Itera will move forward with development plans for the first small-scale LNG plant in Russia.

GE has been working in Russia for nearly 100 years. More than 1,500 GE employees are working in Russia/CIS (Commonwealth of Independent States), with regional headquarters in Moscow. For more information, visit GE’s official website, www.ge.ru.

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