June 26, 2008

GE Energy Supplying 32 Jenbacher Gas Engines to Provide Power for India’s First Heated Crude Oil Pipeline Project

GE Energy is supplying Cairn India with 32 of its J420 GS Jenbacher gas engines that will generate the electricity for India's first cross country, heated crude oil pipeline, which is currently under construction.

The project represents the largest single order of Jenbacher engines in India as the country works to rapidly expand its energy generation and delivery infrastructure to support continued national economic growth.

Cairn India is building a 590-kilometer, 24-inch pipeline to transport crude oil from the Mangala terminal in Barmer in the state of Rajasthan to the coast of Gujarat. The oil pipeline is to be completed by the second half of 2009. An adjoining, 8-inch natural gas pipeline also is being built. Once in operation, the Rajasthan field is expected to produce 175,000 barrels of oil per day, bringing about an increase in the oil production levels for the Cairn India company and making a significant contribution to reducing India's current oil supply and demand imbalance.

GE's Jenbacher engines will be installed at 32 sites along the pipeline's route to meet the 1-MW load requirement at each station. The engines powered by natural gas supplied from the adjoining pipeline will primarily be used to generate power for a Skin Effect Heat Management System (SEHMS) to maintain the fluidity of the waxy crude oil as it is transported.

"This project is not only GE's largest engine order in India, but also the global oil and gas industry's first use of Jenbacher technology to support a heated crude pipeline project, a new potential growth segment for our business," said Prady Iyyanki, CEO of GE Energy's Jenbacher gas engine business. "Cairn India recognized its pipeline would require a highly reliable supply of on-site power, which was a critical reason for their selection of the Jenbacher engines."

The project is the latest example of how GE is helping the oil and gas industry address its diverse on-site power requirements, Iyyanki noted. For example, Jenbacher engines previously have been installed in a number of countries to power pipeline compressor stations, remote oil and gas production facilities and to use associated petrol gas, which otherwise would have been flared.

"The awarding of the order for the Jenbacher engines is yet another milestone as Cairn India prepares for oil production from the Rajasthan fields. This is one of the largest onshore developments undertaken in India. We are confident that GE will be able to meet our schedule with a solution featuring a containerized engine technology with a proven track record of reliability and durability that will be required to help maintain the flow of the crude through the pipeline," said Rahul Dhir, Chief Executive of Cairn India.

For the project, GE is supplying the 32 sets of containerized gas engines, a CO2 fire suppression system, 415-volt switchgear and power cables.

The gas engines are being built at GE Energy's gas engine manufacturing center in Jenbach, Austria. Delivery of GE's Jenbacher equipment is scheduled to run between September 2008 and February 2009, with commercial start-up expected to begin in June 2009.

Besides the rapid growth of India's oil and natural gas infrastructure, the country's demand for power continues to surge. The government of India announced through its National Electricity Policy (NEP) a program targeting "power for all by 2012." This goal, coupled with a gross domestic product (GDP) growth rate of more than 9%, is expected to drive growth in the power sector by 9.5% during the period of the 11th Five-Year Plan (2007-2012).(1)

Through its fuel flexibility capabilities, GE's Jenbacher gas engines are providing this growing sector with a solution for cleaner and efficient power generation, making the engines suitable for a variety of on-site power projects in India that GE Energy's Jenbacher team is already working on, including a rural electrification initiative and a cow manure-biogas power plant in the state of Punjab.

"India is aggressively developing its power generation and delivery infrastructure to help keep pace with a rapidly growing national economy," said GE Energy India Region Executive Kishore Jayaraman. "As a result, GE is seeing a corresponding increase in the demand for technology and services including Jenbacher gas engines, gas turbines, power generation controls, and transmission and delivery systems."

About Cairn India

Cairn India is headquartered in Gurgaon on the outskirts of Delhi, with operational offices in Chennai, Gujarat, Andhra Pradesh and Rajasthan. On January 9, 2007, Cairn successfully concluded the flotation of its Indian business with the commencement of trading of Cairn India Limited on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn Energy PLC currently holds a 65% shareholding in Cairn India Limited.

Cairn India is currently focused on exploration and production in India where it has a working interest in 14 blocks, two of which are producing hydrocarbons. The company holds material exploration and production positions in west India and east India along with new exploration rights elsewhere in India.

About Jenbacher gas engines by GE Energy

GE Energy's Jenbacher gas engine business, based in Jenbach, Austria, is a leading manufacturer of gas-fuelled reciprocating engines, packaged generator sets and cogeneration systems for power generation. Jenbacher engines cover an output range of 0.25 to 3 MW and operate on natural gas or a variety of specialty fuels, including landfill and coal mine gas or alternative fuels like biogas, wood gas, sewage gas and industrial waste gas.

Patented combustion systems coupled with advanced engine and plant management systems enable customers to meet stringent international emission standards while offering high levels of efficiency, durability, and reliability.

About GE Energy

GE Energy (www.ge.com/energy) is one of the world's leading suppliers of power generation and energy delivery technologies, with 2007 revenue of $22 billion. Based in Atlanta, Ga., GE Energy works in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels.

Numerous GE Energy products are certified under ecomagination, GE's corporate-wide initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges. GE's Jenbacher biogas, landfill gas and coal mine methane engines have received ecomagination certification, underscoring the environmental and economic benefits offered from the utilization of generating energy from high methane content waste streams.

(1) Annual Report 2007-08 / Power: The building block of the economy, Ministry of Power, Government of India