Chicago Bridge & Iron Company N.V.(NYSE:CBI) will supply Tecnicas Reunidas of Saudi Arabia with new product storage tanks as part of a clean fuels expansion project, at the Saudi Aramco refinery. The scope of the contract includes engineering, fabrication, and construction of none flat bottom tanks. The company is also to carry out maintenance works on existing tanks which it previously supplied.
China & Saudi Arabia Deals
Under the terms of the agreement Chicago Bridge & Iron Company is to provide all fabrication and project management services while utilizing its Al-Khobar facilities. The project also seeks to train develop and employ Saudi Arabia nationals in various technical positions.
The new contract according to Executive Vice President of CB&I’s Fabrication Services operating group Luke V. Scorsone, underscores growing ties between Chicago Bridge & Iron Company and Tecnicas Reunidas.
In addition to the Saudi Arabia contract, Chicago Bridge & Iron Company has also secured contracts from four PetroChina refineries. The contracts are for the license, engineering, and design of an alkylation unit at each site. The units are to use the company’s advanced sulphuric acid alkylation technology.
“As global gasoline specifications tighten, such as the China VI regulation, our CDAlky technology is helping customers like PetroChina meet stringent requirements for new and existing units in refineries around the world,” said Daniel M. McCarthy, CB&I’s Executive Vice President of Technology.
Q2 Disappointments
The contracts could not have come at a better time as Chicago Bridge & Iron Company is trying to pick itself after feeling the wrath of the street on posting dismal Q2 financial results. The stock plunged on heavy volume to an 8-year low after the infrastructure services firm reported a net loss of $425.4 million compared to a profit of $123.8 million a year ago.
Revenues in the quarter slumped 40% to $1.28 billion compared to consensus estimates of $2.47 billion.
The company has since confirmed plans to take decisive action in a bid to bolster its financial position. One of the plans involves selling the technology business. Proceeds from the divestiture are to be used to pay down debt and reinvest in other businesses.
Chicago Bridge & Iron Company was up by 10.74% in Monday’s trading session to end the day at $12.17 a share.
