Chicago Bridge & Iron Wins Twin Contracts, Boosts Backlog - Analyst Blog

Chicago Bridge & Iron Company N.V. ( CBI ), an energy infrastructure construction company, announced the receipt of a couple of contracts yesterday. The first was sourced from the Bahrain Petroleum Co. (Bapco) for the company's Chevron Lummus Global division, while the second one was a polypropylene unit licensing and engineering contract from the China-based Shenhua Ningxia Coal Industry Group Co. Ltd.

Chevron Lummus Global is a joint venture between CBI and the oil giant Chevron Corporation ( CVX ). The contract, valued at over $100 million, requires the company to extend its LC-FINING and ISOCRACKING technologies while providing comprehensive engineering services for the Bahrain Petroleum Co.

These services will be deployed at the latter's recent facilities for residue hydrocracking and vacuum gasoil hydrocracking as per the Bapco Modernization Program. Chevron Lummus Global enjoys expertise in efficient upgrade of low value residual oils to ones having higher value and improved quality. These higher value oils are middle distillate products, ensuring compliance with rigorous standards as well.

Per the second contract, CBI will be deploying its Novolen technology for production of as much as 600,000 metric tons per annum (MTA) of polypropylene. The two existing Novolen technology units of the plant have cascade and parallel production lines. CBI's technology will be utilized for the upcoming third unit which is expected to increase the facility's production capacity to 1.6 million MTA. This apart, completion of the third unit will also enable production of the complete range of polypropylenes, making it the largest polypropylene facility in China.

Prior to this contract, CBI has also received another contract from this complex, for its Olefins Conversion Technology, Comonomer Production Technology and CDHydro selective hydrogenation and CDIsis technologies.

CBI is a leading provider of integrated engineering, procurement and construction services across the globe. The company has been benefiting from the rising worldwide demand for energy infrastructure, especially in the Liquefied natural gas, gas processing and petrochemicals industry. In the recent past, the company has received a number of contracts in this domain. These contract wins will likely be a positive for the company, significantly boosting the backlog for upcoming third-quarter 2014 results, due on Oct 23.

CBI currently carries a Zacks Rank #4 (Sell). Two better-ranked stocks in the industry are CLARCOR Inc. ( CLC ) and Quanta Services, Inc. ( PWR ), both holding a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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