Baker Hughes Prepares to Come Out From Under GE's Wing

Researched by Industrial Info Resources (Sugar Land, Texas)--Oilfield services company Baker Hughes (NYSE:BHGE) (Houston, Texas) is preparing to leave the auspices of General Electric Company (NYSE:GE) (GE) (Boston, Massachusetts) as GE intends to sell its majority share in the company's stock. Industrial Info is tracking more than $9 billion in active projects involving Baker Hughes.

Click on the image at right for a breakdown by world region of active projects involving Baker Hughes.

Baker Hughes merged with GE Oil & Gas in July 2017, when GE took a 62.5% stake in the company. However, GE appears to have experienced some buyer's remorse and, a year later, announced its intentions to sell its stake in Baker Hughes over the coming two or three years. Last November, GE reduced its stake in Baker Hughes to 50.4%, generating $4.4 billion to benefit the troubled industrial giant.

On Tuesday, Baker Hughes and GE announced GE's intention to sell 105 million Baker Hughes shares, meaning it will no longer be majority owner. According to the Houston Chronicle, the sale could be worth more than $2.5 billion at Baker Hughes' current share price. GE still will hold a stake in Baker Hughes, which allows it to appoint one member to Baker Hughes' nine-member board of directors, provided it retains a stake above 20% and below 50%.

Baker Hughes is involved in billions of dollars of projects in the Oil & Gas Production, Terminals and Pipelines industries, as well as Chemical Processing projects.

Among the largest projects involving Baker Hughes is INPEX Corporation's (Perth, Australia) expansion of its liquefied natural gas (LNG) production facility offshore Australia. Baker Hughes, along with McDermott International Incorporated (NYSE:MDR) (Houston) is providing engineering, procurement and construction (EPC). The project, which is set to kick off early next year, entails constructing a new subsea well gathering system, tied back to the existing central processing facility, as well as the development of new wells at average water depths of between 787 and 885 feet. The project is expected to be completed in mid-2023. For more information, see Industrial Info's project report.

Baker Hughes is a technology provider for Equinor ASA's (NYSE:EQNR) (Stavanger, Norway) topside development of the Johan Castberg oil field offshore Norway. Baker Hughes will provide the turbines for the development of a floating production, storage and offloading vessel with a processing capacity of 188,000 barrels per day and storage capacity of 1.1 million barrels. Construction began late last year and is expected to be finished in late 2022. For more information, see Industrial Info's project report.

Baker Hughes also is acting as a contractor on BP plc (NYSE:BP) (London, England) and Kosmos Energy's (NYSE:KOS) (Dallas, Texas) Tortue floating liquefied natural gas (FLNG) project offshore western Africa. The turret-moored FLNG vessel will have a liquefaction capacity of 2.5 million tons per year and will be accompanied by offloading and storage facilities. Construction on the $1.3 billion project is expected to begin next quarter and be completed in mid-2022. For more information, see Industrial Info's project report.

Among the offshore pipeline projects involving Baker Hughes is the Phase II construction of a monoethylene glycol pipeline, which is part of Egyptian General Petroleum Corporation's (Cairo, Egypt) development of the Zohr natural gas field in the Mediterranean Sea. The $300 million project kicked off early last year and entails constructing a 215-kilometer monoethylene glycol pipeline from the Port Said natural gas processing plant to the Zohr natural gas wellhead platform for injection into the gas wellheads. Construction is expected to be completed by the end of 2020. For more information, see Industrial Info's project report.

While not as large in scope or number as its oil & gas projects, Baker Hughes is involved in some Chemical projects. In Singapore, Baker Hughes is preparing to construct its own chemical plant to produce specialty polymers, cleaning and degassing chemicals to support downstream and industrial sectors in Southeast Asia. Baker Hughes has made a shortlist of proposed EPC contractors. Construction is set to begin next year, for completion in mid-2022. For more information, see Industrial Info's project report.

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