Fluor Corporation (FLR - Analyst Report) has 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. The project is expected to begin operations by 2017 and is expected to produce 1.5 million of ethylene every year.
Valued at approximately $120 million, the contract is expected to be completed by the end of 2013. Fluor has booked the contract in its second quarter order book under the Industrial & Infrastructure segment. The Lake Charles Chemical Complex is also the single-largest manufacturing investment ever made in Louisiana State.
Fluor and Sasol have been working together for over five decades on various projects ranging from coal to liquids and chemical facilities. Fluor Corporation has a strong presence and brand name in executing the FEED contracts in large petrochemical and petroleum companies. In March 2013, Fluor received a FEED (Front-End Engineering and Design) contract jointly from Qatar Petroleum and Royal Dutch Shell plc (RDS.A - Analyst Report) for the Al-Karaana Petrochemicals Complex in Ras Laffan Industrial City, Qatar.
In the last reported quarter (1Q13), Fluor’s revenues for the Industrial & Infrastructure segment came in at $3.1 billion versus $3.0 billion a year ago. The marginal improvement was driven by increased contributions from the infrastructure business line. New awards for the segment totaled $2.2 billion in the first quarter, primarily driven by large infrastructure programs, including the Tappan Zee Bridge in New York and the Horseshoe road project in Texas. Backlog at the end of the quarter was $16.0 billion versus $23.3 billion a year ago, mainly due to reduced mining and metals awards over the past year.
Fluor currently has a Zacks Rank #4 (Sell), which might not be a good option at the moment. However, some other companies in the same sector that are worth considering at the moment are Chicago Bridge & Iron (CBI - Analyst Report), Dycom Industries (DY - Analyst Report) and Emcor Group Inc. (EME - Analyst Report). All three carry a Zacks Rank #1 (Strong Buy).