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Operations Launched at Gas Turbine Repair Works in Saudi Arabia
--Further Plant Expansion Also Decided--

No. 060

Yokohama, April 8, 2016 -- On April 7 (local time) Mitsubishi Hitachi Power Systems, Ltd. (MHPS) launched full-scale operations at a newly completed gas turbine maintenance & repair plant, known as MHPS Saudi Arabia Co. LLC (MHPS-SAU) Repair Factory, in Dammam, Saudi Arabia. Dammam is the largest port city on Saudi Arabia's Arabian Gulf coast. The new facility will function as a service base under a Corporate Procurement Agreement (CPA) concluded with the Saudi Arabian Oil Company (Saudi Aramco), Saudi Arabia's national oil company, with plans calling for further plant expansion by MHPS in the years ahead.

A ceremony was held to commemorate the opening of the new plant. The event was attended by Mr. Abdulaziz A. Al-AbdulKarim, Vice President of Saudi Aramco, and many others involved in the new works' creation. Representing MHPS on the occasion was Executive Vice President Ken Kawai.

MHPS-SAU Repair Factory will be operated by MHPS's base in Saudi Arabia, MHPS-SAU.

Under the CPA concluded between MHPS and Saudi Aramco in November 2014, MHPS is to provide equipment, servicing and replacement parts for gas turbines, a core component of Saudi Aramco's oil and gas plants. The terms of the CPA include a 14-year long-term service agreement (LTSA). The agreement will apply to 11 units of gas turbines supplied to Saudi Aramco by Mitsubishi Heavy Industries, Ltd. (MHI) since 2004.

In line with the CPA, at the newly completed facility in Dammam, MHPS-SAU will perform gas turbine maintenance & repair, provision of replacement parts, and remote monitoring. These and other services will contribute to the stable and highly efficient operation of Saudi Aramco's plant equipment.

MHPS also intends to use the new MHPS-SAU Repair Factory as a base for servicing of compressors and their turbines used in petroleum and chemical plants, etc. Specifically, starting in 2017 MHPS, in collaboration with Mitsubishi Heavy Industries Compressor Corporation (MCO), also a Group company of Mitsubishi Heavy Industries, Ltd. (MHI), will handle maintenance and inspection of compressors and turbines delivered to Saudi Arabia by MCO. To enable this, initiatives will be taken to make some repair facilities identical or compatible with those used in gas turbines. Also, the land area of the new base will be doubled and the plant itself will be expanded. Moreover, new equipment will be installed, including a 20-ton large-scale lathe and low-speed balancing machine.

To date MCO has delivered more than 200 compressors and steam turbines to Saudi Aramco and Saudi Arabia Basic Industries Corporation (SABIC), among others. Until now most of repair of these units has been conducted outside Saudi Arabia. Now, by performing these services at Dammam, services can be provided with greater efficiency and coordination with the client.

Going forward, the feasibility will also be considered of using the expanded plant facilities at Dammam as a base for repairing more than 250 pumps delivered to Saudi Arabia by MHI.

Through the strategic imperative of IKTVA, Saudi Aramco is working to enable a globally competitive industrial base of suppliers in Saudi Arabia. IKTVA supports the development and training of Saudi employees by strengthening the manufacturing echo system through support of the supply chain within the kingdom by promoting goods and services of Saudi Arabia. The program works to actively promote diversification of in-kingdom industries by attracting foreign companies to establish themselves in kingdom and work in partnership with Saudi Aramco to grow their business through a win-win approach. One of the key objectives is job creation in the kingdom through Saudization level evaluation. MHPS Saudi currently has a Saudization rate of 50 percent, placing the company in the highest ("platinum") of the program's four levels. Through classroom and hands-on training, available at the new facility, MHPS will continue to increase Saudization levels for both their facility and Saudi Aramco.

MHI Executive Vice President Kawai delivered these comments: "Going forward, we intend -- not only for MHPS but for the entire MHI Group -- to build relationships with Saudi Aramco in many ways and on multiple levels. After gas turbines and compressors, we will consider possibly using MHPS Saudi also as a repair base for pumps made by MHI for use in plants. Nothing would make us happier than, through our corporate business, to help Saudi Arabia achieve sustained development forever."

With establishment of the new base in Dammam, MHPS and the MHI Group now aim to further enhance their presence in Saudi Arabia. We also will continue to seek to provide a broad array of services both economically attractive and high in reliability, in line with Saudi Arabia's needs.

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