CB&I (ticker: CBI) won a contract for more than $95 million from the Aramco-Shell JV – Saudi Aramco Shell Refinery (SASREF). The scope of work includes the engineering, procurement and construction management for SASREF’s modernization and expansion of its existing refinery in Al-Jubail city, Saudi Arabia.
“The relationship between CB&I and SASREF extends back for more than a decade, and we have been collaborating successfully during this time,” said Duncan Wigney, CB&I’s EVP of engineering and construction. “This award enhances CB&I’s position in the region as a leading provider of energy infrastructure solutions, from conceptual design to fabrication to EPC delivery.”
CB&I has completed the conceptual design and FEED phases of the project, while working with SASREF to optimize investment on the new refinery configuration. CB&I’s integrated solutions will give SASREF the operating flexibility needed to generate maximum returns through sustainable fuels production, which meets Euro V regulations for cleaner emissions.
According to Hydrocarbon Processing, Saudi Arabia is spending billions to construct cleaner oil and gas projects. Hydrocarbon Processing reports that Euro V regulations restrict sulfur content in gasoline and diesel to 10 ppm and cap benzene content in gasoline to 1%. Additionally, the publication said that Saudi Arabia’s maximum sulfur level for diesel was greater than 500 ppm in 2012.
SASREF stats
- Currently, the SASREF website states that production capacity is 305,000 barrels per day
- Covers at least two square kilometers and began commercial production in 1985
- The refinery includes a hydrocracker Unit, visbreaker Unit, and thermal gas-oil unit
- There are two distillation units that distill 150,000 barrels per day
- Over 200 million tons of products have been exported over 24 years
CB&I Q3 highlights
- Reported net income of $10 million, or $0.10 per diluted share, in Q3 2017, compared to net income of $121.8 million, or $1.20 per diluted share, in Q3 2016
- Revenue for Q3 2017 was $1.7 billion, compared to revenue of $2.1 billion in Q3 2016
- New awards in Q3 2017 totaled $437 million, compared to $1.7 billion in Q3 of last year. Backlog at September 30, 2017, was $10.7 billion, compared to backlog of $13.2 billion at September 30, 2016
- E&C operating group revenue was $1.3 billion in Q3 2017, compared to $1.7 billion in the year-ago quarter. The E&C group reported operating income of $13.1 million, compared to $126.8 million in Q3 2016. Results were impacted by changes in estimated margins on two U.S. gas turbine power projects of $38 million and additional costs on U.S. LNG projects of approximately $16 million due in part to the direct effects of Hurricane Harvey.
$1.4 billion in the near-term pipeline
“We’ve already booked in Q4 a confidential contract for nearly $130 million to perform detailed engineering, procurement and supply of processed equipment, including two proprietary heaters for our refinery project in Russia,” CB&I President and CEO Patrick Mullen said on the company’s Q3 conference call.
“We anticipate an imminent award of a roughly $500 million engineering and procurement contract for a large refining project in the Middle East, which will also be an integrated project with heater supply and storage included. We also expect to finalize in Q4 1,000-megawatt natural gas-fired combined-cycle power project in excess of $750 million.”
Mullen also said that CB&I’s fabrication services received significant new awards, including a 34-tank project at the Duqm Refinery in Oman, in a consortium with Saipem, as well as a storage project in Central Asia.
History
CB&I was originally founded in 1889 in Chicago as Chicago Bridge & Iron Company but the company expanded globally early in its history. It has worked for more than 70 years in the Middle East and Asia and more than 100 years in North America and Europe.
CB&I launched a 98-year association with the oil & gas industry in 1919 when it built its first oil storage tanks for Sinclair Refining Company in Glenrock, Wyoming. CB&I began to withdraw from the structural and bridge business to specialize in steel plate structures at that time.
In 1930 CB&I built its first fractionating towers for the petroleum industry. The customer was Standard Oil of Louisiana at Baton Rouge.
