The head of General Electric’s (GE) energy business unit touted natural gas during a GE-sponsored business strategy review Tuesday, following an announcement that GE has signed $3 billion worth of new energy agreements with customers.
GE Energy CEO John Krenicki left no doubt that the company sees much upside to the natural gas boom in North America.
“In an environment where public policy is paralyzed [regarding alternative energy sources], all roads lead to natural gas,” said Krenicki. In the past decade, he said GE has greatly broadened its energy plays, globalizing its gas turbine business, moving heavily into wind turbines, gas reciprocating engines and eventually the oil and gas services business and others.
In the past 12 months the company has expanded its gas engines business in natural gas compression, Krenicki said in introducing a three-hour web-based review for financial analysts.
Noting that two-thirds of GE Energy’s business is outside the United States, Krenicki said a growing sector is GE’s development of large-scale manufacturing and energy services facilities throughout the world’s developing and emerging economies. “We’re an emerging markets company,” he said.
He said GE’s gas turbine sales last year (114) were roughly the same as 1995, so in assessing the company one has to look far beyond turbines to all of the other businesses — many gas-related — that GE has added.
“We have invested heavily in the M&A [mergers and acquisitions] sector to build out our gas franchises in the broadest sense,” said Krenicki. “We haven’t batted a thousand on acquisitions, but I think we have batted 0.700,” he said, citing last year’s $3 billion purchase of gas services giant Dresser Inc.
“We have done more than 90 deals since 2001 — not all of them were right — but the ones we didn’t get right we haven’t let go of, we’re still trying to work those into a better state.” He stressed that acquisitions like Dresser have built up GE’s burgeoning gas franchise.
Other speakers, including Dan Heintzelman, the head of GE’s oil and gas business operations, touted the oil and gas services industry as a high-growth potential business, with shale gas estimated to have annual growth potential in the 15-20% range. GE has doubled its oil and gas service business during the past four years, and its current estimates call for doubling it again in a little more than three years.
GE estimates that capital expenditures in the global oil and gas industry from this year through 2014 will approach $400 billion.
©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |