ABB Ltd. (ABB - Analyst Report) has been awarded a contract to extend the export terminal of the Eni (E - Analyst Report) refinery in Taranto. The refinery is located at the “Mar Grande” bay on the Ionian Sea in southern Italy. The value of the contract is about $40 million and was booked in the fourth quarter 2012.
Eni is trying to enhance the infrastructure of the refinery, located at the export terminal and build a dependable connection with the onshore Tempa Rossa oil plant. The contract received by ABB is a part of this development plan.
Eni plans to extend the existing pipeline, currently connected to the oil field through an underground pipeline. As per the plan the new pier will have five loading arms with a transfer capacity of 3,000 cubic meters per hour.
ABB has a technical expertise in the oil and gas sector and has successfully worked on a number of projects. In the current project, the company will provide new electrical systems as well as the necessary mechanical equipment and automation systems which will help in the secure mooring of the vessels and the loading of crude oil. Expected date of completion of the project is August 2015.
Moving ahead, the emerging markets will be a significant growth driver for ABB. Demand in mature markets is also expected to improve. Customer capital expenditures have soared with the rise in commodity prices. Increased capacity in some later-cycle infrastructure-related businesses continues to exist. In many sectors price stability has been attained and ABB has escalated its prices to offset rising raw material costs.
However, ABB Ltd's results are likely to be adversely impacted by macroeconomic weakness as more than 80% of the company's orders are derived from outside the US.
ABB Ltd. currently has a Zacks #3 Rank (Neutral). Its close rivals such as Siemens AG and Tyco International Inc. (TYC - Analyst Report) both have Zacks Rank #2 (Buy).