Fluor Corporation (FLR) received a contract from Chevron Neftegaz for the Caspian Pipeline Expansion project. Chevron Neftegaz is one of the three project managers working on the Caspian Pipeline Consortium. Project services for the marine terminal and supervisory control and data system (SCADA) sections of the Caspian Pipeline Expansion project will be provided by Fluor.
Starting from western Kazakhstan, the pipeline runs 1,510 kilometers west to the terminal in Novorossiysk, Russia, on the Black Sea. In the second quarter, $100 million was booked by Fluor into backlog in the second quarter. The project is an add on to a number of crude oil production expansion projects in the area.
Fluor acted as a management contractor for the first phase of the Caspian Pipeline project in which more than 700 kilometers of pipeline was renovated and an additional 740 kilometers was constructed. The first phase of the work was completed by Fluor in October 2001. The expansion of the Caspian pipeline and terminal will enhance oil transportation capacity, which will meet energy demand in Russia, Kazakhstan and Europe while attaining economic stability.
Fluor’s role as a project services contractor involves provision for oversight assistance for the deepwater marine terminal expansion in Novorossiysk as well as the SCADA system for the entire pipeline. The project is expected to be completed at the end of 2014.
Recently, Fluor was also awarded an engineering, procurement and construction (EPC) contract in Saudi Arabia. The contract was given by a joint venture company, called SAPCo, being formulated between Saudi Acrylic Acid Company and Evonik Industries, for its Super Absorbent Polymer Project (SAP) in Jubail, Saudi Arabia. The contact value is undisclosed but included by second-quarter 2011 bookings. The SAP project work is being carried out and is scheduled to be completed and commissioned by the fourth quarter of 2013.
Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis.
It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government. The company’s prime competitor is Jacob’s Engineering Group (JEC).
We continue to maintain a Neutral rating on Fluor Corporation, with a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.
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