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GE Oil & Gas Signs Minority Shareholding Agreement with Shenyang Turbo Machinery Corporation

20 January 2010

GE Oil & Gas today announced that it has entered into an agreement to acquire a minority equity interest in Shenyang Turbo Machinery Corporation, a large-scale Chinese state-owned enterprise dedicated to the design and manufacture of turbomachinery equipment and the main operating subsidiary of Shenyang Blower Works Group Company Ltd (SBW Group).

SBW Group, headquartered in Shenyang in China’s Liaoning Province, was first founded in 1934 to design, manufacture and commercialize centrifugal and reciprocating compressors and pumps for application in the domestic petrochemical, fertilizer, coal, natural gas transportation, and power industries.

The agreement was signed today in Shenyang by Mr. Su Yongqiang, Chairman of SBW Group and Fernando Bertoni, General Manager of Business Development for GE Oil & Gas in the presence of Mayor Chen Haibo and other senior government officials.

Mr. Su Yongqiang of SBW Group said: "We are delighted to have GE Oil & Gas, a global technology leader, join us as we enter a new phase of growth at SBW Group. The announcement consolidates a long-term partnership spanning 30 years, most recently invigorated by successful cooperation on the milestone West-to-East pipeline project. The equity holding formalizes GE’s track-record of reliable partnership, consistent delivery and long-term commitment to our business objectives in China.”

Fernando Bertoni of GE Oil & Gas said: “SBW Group is a key contributor to China’s domestic production of technology equipment and to the development of the national economy. This strategic alliance with SBW reflects our commitment to China and strengthens our local market presence. Working together, SBW Group and GE Oil & Gas will continue to support critical energy infrastructure projects in China with advanced technological innovation and world-leading engineering expertise.”

SBW Group’s domestic installed base includes over 1,850 large-scale centrifugal compressors, 1,059 large water pumps and 885 reciprocating compressors, and its customers include China Petrochemical Corporation, China National Petroleum Corporation, Linde, JSW Steel Limited, and China National Offshore Oil Corporation. The company, whose main shareholder is the Shenyang Government, operates 13 subsidiaries and has over 6,000 employees, including a core management team with more than 75 years of compressor design and manufacturing experience. SBW Group sales for 2008 stood at $700 million, reflecting a 14% growth on the previous year.

Working alongside SBW Group, GE Oil & Gas is a major supplier of turbomachinery equipment to Petrochina, owner and developer of the milestone West-to-East gas pipeline infrastructure project, which snakes through 13 provinces and autonomous regions, and is playing a vital role in supporting China’s energy security and economic development.

In addition to the West-to-East pipeline project, GE has been an equipment supplier for Sinopec's Sichuan-to-East China pipeline, which transports natural gas from the Puguang field in Sichuan to Shanghai in China's eastern region. Sinopec (China Petroleum and Chemical Corp.) is China's second-largest oil and gas producer.