(CBI) Chicago Bridge & Iron Company N.V. Earns Another Contract

Chicago Bridge & Iron Company N.V. (CBI) recently won a contract from Occidental Chemical Corporation, wherein it will provide technology license, basic engineering and front end engineering and design (FEED) services for a proposed new ethane cracker.

An ethane cracker is a process that cre­ates eth­yl­ene, a com­pound used in the man­u­fac­ture of plas­tic. As per the terms of the contract, Chicago Bridge will be responsible for the basic engineering for the ethylene technology and five short residence time (SRT) heaters from Chicago Bridge’s Lummus Technology business division.

The primary feedstock for the planned cracker is ethane, which will likely be derived from shale gas. Further, this proposed cracker is expected to have a capacity of producing 1.2 billion pounds of ethylene per year.

Earlier, in September 2012, the company won an offshore engineering contract in Europe. The contract is worth more than $80 million and is expected to be completed in fiscal 2013.

As per the terms of the contract, Chicago Bridge & Iron will be responsible for complete engineering design and will also provide procurement services for the project.

In addition to this, in the month of June 2012, the company announced the winning of a front end engineering and design (FEED) contract from Nizhnekamskneftekhim OAO, valued at more than $40 million.

Chicago Bridge & Iron Company is one of the few engineering, procurement and construction (EPC) and process technology contractors with in-house fabrication facilities. These facilities allow the company to offer customers a wide range of options in modular construction, wherever feasible.

Going forward, Chicago Bridge & Iron is expected to benefit from the strong and growing energy infrastructure market, especially for liquefied natural gas (LNG). LNG is the company’s strongest market, supported by its ability to participate in multiple stages of development and strong base for investments.

However, the company’s revenue and earnings may be adversely affected by a reduced level of activity in the hydrocarbon industry, especially in light of the global financial and economic crisis. A major competitor of CBI is Matrix Service Co. (MTRX).

Chicago Bridge & Iron Company N.V. is among the world’s leading integrated engineering, procurement and construction service providers and major process technology license, providing comprehensive solutions to customers, primarily in the energy and natural resource industries. The company currently holds a Zacks #3 Rank, which implies a short term Hold rating on the stock.

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