Chicago Bridge & Iron (CBI - Free Report) recently received a $1-billion worth contract from Ingleside Ethylene LLC for the engineering, procurement and construction of an ethane cracker and associated utilities and off-sites. This ethane cracker facility will be constructed at Occidental Chemical Corporation’s complex at Ingleside, Texas.
According to the contract, CBI will provide the technology license and basic engineering for the ethylene technology, five SRT (short residence time) cracking heaters and the front end engineering and design (FEED) services.
Ingleside Ethylene LLC, is a joint venture between Occidental Chemical Corp. (OxyChem), a subsidiary of Occidental Petroleum Corp. (OXY - Free Report) , and Mexichem, S.A.B. de C.V. (Mexichem). The ethane cracker will be located in OxyChem’s complex, in Texas and once operational, it will produce about 1.2 billion pounds of ethylene annually. Primary feedstock for this cracker will be the ethane derived from domestic shale gas.
CBI primarily engages in the design, build, repair and modification of steel tanks and other steel plate structures. In addition, the company also has expertise in the design and build of petroleum terminals, refinery pressure vessels, low temperature and cryogenic storage facilities and elevated water storage tanks for clients internationally.
Engineering company, Chicago Bridge & Iron reported third-quarter 2013 adjusted earnings of $121.3 million or $1.12 per share (excluding the one time items), in line with the Zacks Consensus Estimate. Adjusted net income improved 46.7% year over year on the back of strong project activities during the quarter.
Further, revenues for the quarter increased a robust 106.8% year over year to $3.0 billion, driven by healthy revenue growth across all the three legacy business units of the company due to the rising demand for energy infrastructure, especially in the LNG, gas processing and oil and gas markets across the world.
CBI currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy and utility sector include VSE Corp. and A O Smith Corp. (AOS - Free Report) . Both carry a Zacks Rank #1 (Strong Buy).