As the global economy dwindles over fears of European crisis
harming industrial growth,
Jacobs Engineering Group Inc.
(
JEC
) takes a bold step forward in the besieged continent; receiving a
framework contract from Electricite de France (
EDF
). The contract will offer owner engineering services in support of
gas infrastructure projects across Europe, within a duration of
four years.
Jacobs will be providing a wide range of management, consultancy
and design services. These include - project management; permitting
and administration; specifications and conceptual design;
procurement; and supervision of construction. In a nutshell,
infrastructure development for natural gas storage, distribution
through gas pipelines, underground storage facilities and
regasification terminals, fall within the scope of the framework
project awarded by EDF.
With this contract win, Jacobs is expected to expand the scope
of services in Europe, supporting EDF in the development of its gas
business. However, the value of the contract has not yet been
disclosed.
Jacobs' contract winning spree has not ceased with its support
extension to the European gas business. It also won two strategic
contracts - a design and fabrication contract by El Dorado Chemical
Company and the other one - a follow-on contract to provide
advisory and assistance services for the Air Armament Center (
AAC
).
The Chemetics unit of Jacobs Engineering in Pickering, Ontario,
Canada won the El Dorado Chemical Company contract for three
proprietary designed sulfuric acid coolers to be installed in the
company's acid plant in El Dorado, Ark. The construction cost to El
Dorado has been estimated at $700,000.
The scope of work under the contract involves the design and
fabrication of drying, interpass and final anodically protected
sulfuric acid coolers. These coolers will replace two of the
original Chemetic coolers supplied in 1975 and another one supplied
in 2008, during plant upgradation. The contract is expected to
custom design the coolers and the associated water piping to meet
the present and future operational requirements of the plant. The
contract has been valued at $500,000.
This project is an excellent example of Jacobs' unique ability
to collaborate with its clients for providing high value solutions,
while reinforcing the company as a leader in design and supply of
proprietary equipment for the sulfuric acid production
industry.
El Dorado Chemical produces concentrated nitric acid (
CNA
), sulfuric acid and weak nitric acid at its facility. The
company's collaboration with Jacobs, in designing and supplying of
proprietary equipment for the sulfuric acid production, will bring
the engineering giant in the fore front for providing high value
solutions in the chemical industry.
On the other hand, the follow-on contract awarded by U.S. Air
Force Air Armament Center (
AAC
) at Eglin Air Force Base (
AFB
), Fla. includes assistance toward engineering and integration of
all USAF air-launched weapon systems; test and training range
systems and numerous air combat support systems through the
Technical and Engineering Acquisition Support (TEAS) 6
contract.
The contract is valued at $662 million with a total ordering
period of 3 years, commencing on December 2011
Jacobs already has a long-standing relationship with the USAF's
Air Armament Center. The follow on contract is expected to provide
integrated research, development, acquisition, test and evaluation
activities necessary to assist AAC in delivering state of the art
weapons to the Air Force.
Jacobs' worldwide ever-increasing contract list is a splendid
indication of its strong position in the infrastructure market
across the globe. This, over time, has been winning investor
confidence and is expected to continue such outlook further. The
company directly competes with its peers, viz.
Fluor Corporation
(
FLR
) and
Foster Wheeler AG
(
FWLT
).
We currently hold a Neutral recommendation on the stock. Jacobs
has a Zacks #2 Rank, implying a short-term (1-3 months) Buy
rating.
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FLR
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