Honeywell Technologies (HON Quick QuoteHON - Free Report) has been selected by Dangote Petroleum Refinery and Petrochemicals FZE to offer technologies and services for a proposed refinery in Kenya with a processing capacity of 700,000 barrels per day. The collaboration will involve Honeywell Technologies supplying technology licensing, process technologies, engineering expertise, equipment and digital solutions and proprietary catalysts for the new refinery.

Based in Nigeria, Dangote Petroleum Refinery and Petrochemicals FZE is part of the Dangote Group and operates the Dangote refinery in Lekki. The company is engaged in refining crude oil into products such as gasoline, diesel and jet fuel, while also producing petrochemical products.

Inside the Headlines

Per the deal, Honeywell Technologies will leverage engineering designs previously developed for Dangote’s Lekki refinery. This is expected to accelerate the development schedule of the new project by nearly two years, or about 30%, compared with other new refinery projects.

The planned refinery in Kenya will use HON’s refining and petrochemical technologies to generate gasoline, diesel, jet fuel and polypropylene. The facility will also be designed to process crude oils ranging from light to heavy grades, providing greater flexibility in sourcing feedstock. Once completed, the refinery will be the world’s largest single-train refinery.

Honeywell Technologies' scope for the project is expected to be worth approximately $300 million, similar to its involvement in the Lekki refinery in Nigeria. The agreement expands HON’s relationship with Dangote and creates an opportunity to deploy its process technologies, engineering capabilities and digital solutions in another large-scale energy project.

HON’s Zacks Rank

On June 29, HON became a separate public company following the spin-off of the Aerospace Technologies business from Honeywell International. This marked the completion of Honeywell’s multi-year portfolio restructuring, creating three stand-alone publicly traded companies. The move allows Honeywell Technologies to sharpen its focus on industrial automation and benefit from improved operational focus, capital allocation and financial flexibility.

Honeywell Technologies benefits from broad automation demand, with Building Automation and core Industrial Automation segments supported by growing orders, an expanding backlog and exposure to data centers, utilities and other mission-critical markets.

In the past month, this Zacks Rank #3 (Hold) company’s shares have risen 2.4% against the industry’s 1.2% decline.

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However, HON has been witnessing weakness in the Process Automation and Technology segment. Lower sales in the aftermarket business owing to lower refining catalyst shipments are ailing the segment.

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