Global engineering, procurement and construction conglomerate Chicago Bridge & Iron Company N.V. CBI recently announced that it has secured three multi-million awards that will significantly supplement its financial performance in the forthcoming quarters.
The Contracts
ORPIC Deal
The joint venture between Chicago Bridge & Iron and Cinda Engineering & Construction has signed a $2.8-billion contract with Oman Oil Refineries and Petroleum Industries Company. As per the contract, Chicago Bridge & Iron will provide its services to build a steam cracker package for the Liwa Plastics Industrial Complex Project in Oman.
Chicago Bridge & Iron will supervise construction of cryogenic and atmospheric storage tanks, pipe spool fabrication, 880-ktpa ethylene plant, pygas unit, MTBE unit and all related off-sites and utilities. The company also plans to deploy its proprietary SRT cracking heaters, which are part of ethylene technology and its revolutionary recovery section design technique.
Lotte Chemical Award
Chicago Bridge & Iron secured a contract worth $365 million from Lotte Chemical Louisiana, LLC to offer its construction services for a monoethylene glycol (MEG) facility in Lake Charles, LA. This award follows the early-work agreement with Lotte Chemical signed earlier in 2015 for construction of this MEG unit. The latest scheme is Lotte Chemical’s second important petrochemical project in the region and Chicago Bridge and Iron has been selected for both of them on account of its impressive project execution history.
Extension of Contract
The company has also obtained a multi-year extension for an existing $100-million contract that aims to provide long-term maintenance services at several specialty chemical facilities throughout the Gulf Coast region in the U.S.
To Conclude
In the recently reported third quarter, Chicago Bridge & Iron has won $4 billion worth of contracts in various end markets. Also, year to date, the company has booked $10 billion in new awards, thereby achieving a backlog level of $30 billion. Further, Chicago Bridge & Iron has $65–$70 billion of addressable market opportunities in 2016, which will likely contribute to its growth momentum, going forward.
We believe the company’s solid history of winning orders, availing lucrative opportunities in certain end markets and unparalleled safety performance serve as indicators of solid operational performance, which in turn, promise strong prospects.
Chicago Bridge & Iron currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Dycom Industries Inc. DY, Zhejiang Expressway Co. Ltd. ZHEXY and Jiangsu Expressway Co. Ltd. JEXYY. While Dycom sports a Zacks Rank #1 (Strong Buy), both Jiangsu Expressway and Zhejiang Expressway hold a Zacks Rank #2 (Buy).
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