The memorandum of understanding would result in a joint venture company, in which GE and Shenhua would execute a strategic vision for expanding to improve cost and performance of commercial scale gasification and integrated gasification combined cycle (IGCC) solutions. This includes industrial coal gasification applications in China as well as jointly pursuing the deployment of commercial scale IGCC plants with carbon capture.

The parties anticipate that the transaction would be completed in the first half of 2010, subject to the negotiation of definitive agreements and obtaining all required approvals.

GE’s gasification technology is one of the most widely applied technologies of its kind in China, with more than 40 licensed facilities.

Shenhua is one of the world’s largest coal and energy companies, with coal reserves, coal-fired power generation, and a national role in the development of new coal-related technologies such as coal-to-liquids and carbon sequestration. Shenhua has significant experience in the development of coal-to-chemicals facilities and in the operation of coal gasification systems over a range of technology configurations.

The US and China are two of the largest consumers of coal for industrial applications and power generation. There is significant interest in seeing cleaner gasification technologies and IGCC with carbon capture widely deployed in a carbon-constrained environment.

Other agreements. In addition to an agreement with the China Ministry of Railways to advance high-speed rail in the US, other GE-China agreements this week include:

• GE Aviation and AVIC Systems will create a global avionics business to develop and market integrated systems for commercial aircraft customers. The joint venture, to be headquartered in Beijing, China, plans to offer fully integrated, open architecture avionics and services for future civil aircraft programs.

• GE Transportation and CSR Qishuyan will form a joint venture company to develop, build and service GE’s Evolution Series locomotive diesel engines in China, where there is significant opportunity for modernization. Of the 12,000 diesel locomotives in China, only a small fraction are advanced technology. Also, as demand for the ecomagination-certified technology increases around the world, the new company would jointly seek future commercial opportunities.

• CSR Qishuyan Locomotive Co., Ltd. agreed to purchase 300 Evolution Series locomotive assemblies.