McDermott International, Inc.’s joint venture (JV) in China — Qingdao McDermott Wuchuan Offshore Engineering (“QMW”) — was recently awarded a large contract in Russia's Yamal-Nenets Autonomous Region. Per the award, McDermott will supply three complex modules for Novatek's Arctic LNG 2 project. Although the contract value is kept under wraps, the ‘large’ ones usually range between $50 million and $250 million.
In this project, McDermott’s joint venture with the China Shipbuidling Industry Corporation will carry out fabrication engineering along with partial procurement, construction and pre-commissioning scope. Fabrication, which is planned to begin later this year, is expected to be completed in mid-2022 at QMW's mega module workshop as it is more secure, safer and assures successful project delivery.
The Project in Brief
Novatek’s Arctic LNG 2 project will have three LNG trains worth a volume of 6.6 million tonnes per year and are planned to be set up on three gravity-based structural platforms.
Earlier this year, a TechnipFMC (FTI - Free Report) -led consortium was awarded a £6.1 billion contract for engineering, procurement and construction of the same project. The output of this endeavor will be supplied internationally in Europe and Asia with the help of ice-class LNG carriers. The first LNG cargo is estimated to be shipped by 2023 while the second and third trains will start moving by 2024 and 2026, respectively.
Russian gas producer Novatek holds a 60% stake in the undertaking while TOTAL S.A., CNOOC Limited (CEO - Free Report) , CNPC and Japan Artic LNG owns 10% interest each. As TOTAL itself occupies 11.6% of Novatek’s shares, its overall ownership in Arctic LNG 2 adds up to 21.6%.
Houston, TX-based McDermott is a fully vertically integrated company providing engineering and construction solutions to energy firms.
Zacks Rank & Key Pick
McDermott carries a Zacks Rank #3 (Hold). A better-ranked player in the energy space is BP Midstream Partners (BPMP - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BP Midstream’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters.
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