The joint venture (JV) between Fluor Corporation (FLR) and JGC Corporation recently received a contract from Chevron Phillips Chemical Company LP. The contract requires the JV to provide engineering, procurement and construction (EPC) services to Chevron’s U.S. Gulf Coast petrochemicals project. The financials were not disclosed, but the contract was booked in the third quarter by Fluor.
This is the first contract received by the joint venture. The JV will provide EPC services for the outside battery limit scope and the direct hire construction for the entire cracker project.
Located in Baytown, Texas, this petrochemicals project primarily comprises ethylene unit cracker and associated offsite components that are required to be built at Chevron’s Cedar Bayou complex. Cracker in the petrochemical industry is referred to a facility where it takes oil & gas and breaks them up into smaller molecules. Therefore, an ethane cracker creates ethylene, a compound used in the manufacture of plastic.
Headquartered in The Woodlands, Texas, Chevron Phillips Chemical is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron Phillips Chemical owns three world-scale plants in the State of Qatar, including Q-Chem, a world-scale ethylene, polyethylene and 1-hexene complex; RLOC, one of the world's largest ethane crackers; and Q-Chem II, a world-scale olefins and polyolefins complex.
Fluor Corporation has a strong presence and brand name in executing the FEED and EPC contracts in large petrochemical companies. In Jul 2013, Fluor procured a front-end engineering and design (FEED) contract for Sasol’s Lake Charles Chemical Complex situated in Louisiana. This facility, once completed, will be a world-class ethane cracker and associated derivative chemicals facility of this Johannesburg-based integrated energy and chemical company, Sasol Ltd.
Fluor currently has a Zacks Rank #3(Hold). Other companies in the petrochemicals industry which look promising at the moment are Micheal Baker Corporation (BKR), Foster Wheeler AG (FWLT) and Quanta Services Inc. (PWR). Micheal Baker has a Zacks Rank #1 (Strong Buy), while Foster Wheeler and Quanta Services carry a Zacks Rank # 2 (Buy).
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