Caterpillar Powered Coal Methane Gas Project in China Will be Largest in the World

Caterpillar Powered Coal Methane Gas Project in China Will be Largest in the World

May 18, 2006

Use of Caterpillar Generator Sets Expected to Help Improve Mine Safety, Reduce Greenhouse Gas Emissions and Generate Electricity from Methane Gas

    BEIJING, May 18 /Xinhua-PRNewswire/ -- Caterpillar Inc.
(NYSE: CAT) has been selected to provide 60
methane-gas-powered generator sets to produce 120 megawatts
of power at the Sihe Coal Mine in Jincheng City, Shanxi
Province, China.  The Shanxi Jincheng Anthracite Coal
Mining Group Co., Ltd. is the project developer for the
methane gas power project, which is expected to be the
largest of its kind in the world when it is fully
operational.

    "The residents of Shanxi Province will benefit
from this power plant, which is a great example of the
progress that is possible when companies like Caterpillar
and its dealers work closely with industry and
government," said Stu Levenick, Caterpillar group
president with responsibility for China."  "This
project will improve environmental and economic conditions
and mine safety while increasing trade between the United
States and China." 

    Methane gas is found in coal seams and can be hazardous
if not properly managed and ventilated from mines.  The
power plant project is expected to improve methane gas
ventilation at the mine site, improving safety while
providing an environmentally friendly fuel source to
generate electricity.  Historically, the methane has been
vented into the atmosphere, generating greenhouse gas
emissions.  By capturing the previously vented methane gas
and converting it into electricity, the Caterpillar
generator sets will significantly reduce greenhouse gas
emissions while also improving the capacity of the local
power grid.  It's estimated the project will reduce
greenhouse gas emissions by 4.5 million tons over a 20-year
period.   

    "Caterpillar has a strong commitment to safety and
environmental stewardship, and we are honored to be a
partner in this important project supporting China's
efforts to pursue sustainable economic development,"
Levenick added.  

    It is anticipated the planned power generation plant at
the Sihe Coal Mine will use 60 Caterpillar G3520 generator
sets, paralleling switchgear and four steam turbines driven
by recovered exhaust heat to produce 120 megawatts of power.
 Project partner Shanghai Electric Group Co., Ltd. will
provide the steam turbines.  The entire methane-fired power
plant is expected to be fully operational in 2007. 
Caterpillar will work closely with dealer WesTrac China
Limited on product commissioning and ongoing support for
this project.   

    "For more than 20 years, our Lafayette, Indiana,
Large Engine Center has produced the 3500 series of engines
for use in electric power projects all over the world,"
said Bill Rohner, Caterpillar vice president with
responsibility for the Electric Power Division.  "The
engines that will be the heart of this coal methane power
plant have a proven track record and will provide years of
dependable electricity for the people of Shanxi
Province," Rohner said. 

    Caterpillar has a long history in China. The company
sold its first products there in 1975 and opened an office
in Beijing in 1978. Beijing is home to Caterpillar's
marketing headquarters for China, and it is also the
headquarters for Cat China Financial Leasing.

    In the 1980s, Caterpillar launched technology transfer
agreements with Chinese manufacturers who began building
Caterpillar licensed products. Caterpillar's expansion in
China accelerated in the early 1990s with the establishment
of a more significant local production strategy.  Today,
Caterpillar operates 13 facilities -- both joint-venture
and wholly-owned businesses -- which, together with its
network of independent Caterpillar dealers, offer customers
in China the best-in-class products, services and support
that have made it a global leader.

    For more than 80 years, Caterpillar Inc. has been
making progress possible and driving positive and
sustainable change on every continent.  With 2005 sales and
revenues of $36.339 billion, Caterpillar is the world's
leading manufacturer of construction and mining equipment,
diesel and natural gas engines and industrial gas turbines.
  More information is available at http://www.CAT.com .

    SAFE HARBOR 

    Certain statements in this release relate to future
events and expectations and as such constitute
forward-looking statements involving known and unknown
factors that may cause actual results of Caterpillar Inc.
to be different from those expressed or implied in the
forward-looking statements.  In this context, words such as
"expects," "anticipates,"
"intends," "plans,"
"believes," "seeks," "will,"
or other similar words and phrases often identify
forward-looking statements made on behalf of Caterpillar. 
It is important to note that actual results of the company
may differ materially from those described or implied in
such forward looking statements based on a number of
factors and uncertainties, including, but not limited to,
changes in economic conditions, currency exchange rates or
political stability; market acceptance of the company's
products and services; significant changes in the
competitive environment; changes in law, regulations and
tax rates; and other general economic, business and
financing conditions and factors described in more detail
in the company's filings with the Securities and Exchange
Commission, including the financial release filed on Form
8-K with the Securities and Exchange Commission on April
24, 2006.  We do not undertake to update our
forward-looking statements.  

    For more information, please contact:

     Jim Dugan, 
     Corporate Public Affairs, 
     Caterpillar Inc.
     Tel:   [phone]
     Email: [e-mail] 

SOURCE  Caterpillar Inc.