Chicago Bridge & Iron (CBI) has received an over $70 million contract from Saudi Arabia based Petrofac Co. Ltd. The scope of the contract requires Chicago Bridge to execute engineering, procurement and construction (EPC) of crude oil storage tanks at a grassroots refinery being constructed in Saudi Arabia. Grassroots refineries are managed at local level on a smaller scale than the usual large industrial refineries.
Petrofac has been a leading provider of oilfield services to the international oil and gas industry for over three decades. The company primarily provides onshore EPC services predominantly to the oil and gas industry in the Middle East, Africa and the Commonwealth of Independent States.
This apart, the company also provides Offshore Projects & Operations, which includes the Offshore Capital Projects service line, specializing in both offshore engineering and construction services, for greenfield and brownfield oil and gas projects, and the provision of operations and maintenance support, onshore and offshore.
Chicago Bridge has been operating in Saudi Arabia since the 1930s, primarily in the areas of ground storage tanks, elevated storage tanks, Liquefied Natural Gas tanks, pressure vessels and other specialty structures like nuclear containment vessels. One of its primary clients in Saudi Arabia is Saudi Aramco (state owned fully integrated, global petroleum and chemical enterprise).
Chicago Bridge is the leader in the LNG storage niche market. The company keeps winning contracts particularly for LNG/low temperature storage systems (petrochemicals), an area where Chicago Bridge is currently the leader and plans to aggressively capture the entire market share. In addition, the company also specializes in the waste and waste water tanks, mineral processing storage and power applications, such as liquefaction/vaporization and storage facilities.
Chicago Bridge currently holds a Zacks Rank #3 (Hold). Investors interested in the engineering, oil & gas and energy industries may consider stocks like VSE Corp. (VSEC), Quanta Services Inc. (PWR) and ITT Corp. (ITT). VSE carries a Zacks Rank #1 (Strong Buy), while Quanta and ITT have a Zacks Rank #2 (Buy).
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