KBR Inc. (KBR) has received a front end engineering and design (FEED) contract from an affiliate of Gulf LNG Energy. This deal win closely follows the previous contract from Maersk Oil for developing the Culzean Project in the North Sea.
The contract requires KBR to provide Federal Energy Regulatory Commission (FERC) FEED engineering and FERC report pre-filing services for adding ten million metric tons per year of liquefaction and export capabilities to Gulf LNG Energy’s existing liquefied natural gas (LNG) import terminal in Jackson County, MS.
Although, the financial terms of the deal were kept under wraps, expected revenues to be generated from this project is included in the second-quarter 2014 backlog under KBR’s Gas Monetization segment. The Gas Monetization segment designs and constructs facilities for transporting liquefied natural gas (LNG) and gas-to-liquids (GTL) across the globe. Notably, it contributed 29.6% of the total revenue in 2013. Apart from this, the segment provides integrated services to several LNG and GTL mega projects and plays a significant role in enhancing the development of gas processing, equipment designing and fostering innovation in construction methods.
The scope of the Gulf LNG Energy contract requires KBR to perform FERC FEED engineering for two LNG trains, (each having an annual capacity of five million metric tons) and associated facilities using the APCI C3MR Technology. This apart, KBR will also submit the technical documentation required by the Federal Energy Regulatory Commission (FERC) during the pre-filing process.
The purpose of this FERC FEED contract is to make the Gulf LNG Terminal a bi-directional facility. This conversion will allow the terminal to liquefy domestic natural gas delivered by a pipeline, store the LNG in the terminal's existing LNG storage tanks and load it into LNG vessels via the terminal's existing marine jetty. The terminal will also be able to maintain its current capabilities of receiving, storing, re-gasifying and delivering natural gas into the original interstate pipeline system as.
KBR currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the sector include Emcor Group Inc. (EME), Sterling Construction Co. Inc. (STRL) and Tutor Perini Corporation (TPC). All three carry a Zacks Rank #2 (Buy).
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