Reports related to this article:
Project(s): View 6 related projects in PECWeb
Plant(s): View 6 related plants in PECWeb
Released August 11, 2017 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--With oil exploration and production companies putting the brakes on expansions amid lower-than-expected prices, related engineering, procurement and construction (EPC) providers are taking a hit in orders and earnings. Chicago Bridge & Iron Company N.V. (NYSE:CBI) (CB&I) (The Hague, Netherlands) incurred a heavy net loss in second-quarter 2017, and is planning to sell its technology business and focus its efforts on the liquefied natural gas (LNG), petrochemical, refining and natural gas-fired generation industries. Industrial Info is tracking more than $100 billion in active projects involving CB&I.
Revenues for second-quarter 2017 stood at $1.3 billion, a 40.9% decrease from the same period in 2016; CB&I reported a net loss of $304.1 million, down from net income of $115.6 million. Not coincidentally, new awards declined 15% to $1.1 billion, and the total backlog was down 7.5% to $13.6 billion.
Executives blamed the net loss on charges recorded on four major engineering projects. Two natural gas combined-cycle (NGCC) projects--AES Corporation's (NYSE:AES) (Arlington, Virginia) $600 million IPL Eagle Valley project in Martinsville, Indiana, and Calpine Corporation's (NYSE:CPN) (Houston, Texas) $760 million York Energy Center in Delta, Pennsylvania--accounted for $181 million in charges, while two U.S. LNG projects--Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana, and Freeport LNG Development LP's (Houston, Texas) $5.5 billion initial train at the Freeport LNG liquefaction and export plant in Freeport, Texas--accounted for $367 million.
AES said earlier this year that it was accelerating recovery work at Eagle Valley. Last month, executives at Calpine acknowledged that their company might be sold off and blamed "struggles" at CB&I for the commercial operation date for York Energy Center being pushed back into early 2018. Also last month, Freeport LNG applied with the Federal Energy Regulatory Commission (FERC) to site, construct and operate a fourth LNG train at its complex. For more information, see Industrial Info's project reports on Eagle Valley, the York Energy Center and Freeport LNG, and May 9, 2017, article - AES Corporation Invests in NGCC, Renewables as Coal Loses Luster; July 31, 2017, article - Calpine Eyes Company Sale as Low Natural Gas Prices Stall Projects, Pummel Profits; and July 11, 2017, article - Freeport LNG Applies with FERC for Fourth LNG Train.
Last week, Sempra announced that completion of the first train at Cameron LNG has been pushed back to early 2019, with the remaining two trains following later that year; the full complex would comprise three liquefaction trains, each with a capacity of 5 million metric tons per year, a 160,000-cubic-meter LNG storage tank and related facilities. For more information, see Industrial Info's project report and August 7, 2017, article - Sempra Reaps Profits from Utilities, but Faces Major Setback with Cameron LNG Project.
CB&I's outlook hasn't improved, either. Revenue for the second half of the year is expected to be between $3.7 billion and $4 billion, which would result in full-year revenues of roughly $7 billion, well below the previous guidance of between $9.5 billion and $10.5 billion.
But one area of growth for CB&I has been the ethylene market, which executives regard as a bellwether for the petrochemical sector. It is home to one of CB&I's biggest U.S. projects set to kick off before the end of the year: E.I. du Pont de Nemours and Company's (NYSE:DD) (DuPont) (Wilmington, Delaware) expansion of the Sabine River Works plant in Orange, Texas. The project is expected to increase the plant's ethylene capacity an estimated 200 million pounds per year to 1.7 billion. For more information, see Industrial Info's project report.
However, one of the business likely to be sold off is CB&I Lummus, which is part of the company's technological services division. CB&I Lummus is serving as consultant on another project currently set to begin construction before the end of the year: Shanxi Coking Coal Group Company Limited's polypropylene and polyvinyl alcohol unit addition chemical complex in Linfen, China. The new unit is expected to produce 300,000 metric tons per year of polypropylene and 300,000 metric tons per year of polyvinyl alcohol. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Revenues for second-quarter 2017 stood at $1.3 billion, a 40.9% decrease from the same period in 2016; CB&I reported a net loss of $304.1 million, down from net income of $115.6 million. Not coincidentally, new awards declined 15% to $1.1 billion, and the total backlog was down 7.5% to $13.6 billion.
Executives blamed the net loss on charges recorded on four major engineering projects. Two natural gas combined-cycle (NGCC) projects--AES Corporation's (NYSE:AES) (Arlington, Virginia) $600 million IPL Eagle Valley project in Martinsville, Indiana, and Calpine Corporation's (NYSE:CPN) (Houston, Texas) $760 million York Energy Center in Delta, Pennsylvania--accounted for $181 million in charges, while two U.S. LNG projects--Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana, and Freeport LNG Development LP's (Houston, Texas) $5.5 billion initial train at the Freeport LNG liquefaction and export plant in Freeport, Texas--accounted for $367 million.
AES said earlier this year that it was accelerating recovery work at Eagle Valley. Last month, executives at Calpine acknowledged that their company might be sold off and blamed "struggles" at CB&I for the commercial operation date for York Energy Center being pushed back into early 2018. Also last month, Freeport LNG applied with the Federal Energy Regulatory Commission (FERC) to site, construct and operate a fourth LNG train at its complex. For more information, see Industrial Info's project reports on Eagle Valley, the York Energy Center and Freeport LNG, and May 9, 2017, article - AES Corporation Invests in NGCC, Renewables as Coal Loses Luster; July 31, 2017, article - Calpine Eyes Company Sale as Low Natural Gas Prices Stall Projects, Pummel Profits; and July 11, 2017, article - Freeport LNG Applies with FERC for Fourth LNG Train.
Last week, Sempra announced that completion of the first train at Cameron LNG has been pushed back to early 2019, with the remaining two trains following later that year; the full complex would comprise three liquefaction trains, each with a capacity of 5 million metric tons per year, a 160,000-cubic-meter LNG storage tank and related facilities. For more information, see Industrial Info's project report and August 7, 2017, article - Sempra Reaps Profits from Utilities, but Faces Major Setback with Cameron LNG Project.
CB&I's outlook hasn't improved, either. Revenue for the second half of the year is expected to be between $3.7 billion and $4 billion, which would result in full-year revenues of roughly $7 billion, well below the previous guidance of between $9.5 billion and $10.5 billion.
But one area of growth for CB&I has been the ethylene market, which executives regard as a bellwether for the petrochemical sector. It is home to one of CB&I's biggest U.S. projects set to kick off before the end of the year: E.I. du Pont de Nemours and Company's (NYSE:DD) (DuPont) (Wilmington, Delaware) expansion of the Sabine River Works plant in Orange, Texas. The project is expected to increase the plant's ethylene capacity an estimated 200 million pounds per year to 1.7 billion. For more information, see Industrial Info's project report.
However, one of the business likely to be sold off is CB&I Lummus, which is part of the company's technological services division. CB&I Lummus is serving as consultant on another project currently set to begin construction before the end of the year: Shanxi Coking Coal Group Company Limited's polypropylene and polyvinyl alcohol unit addition chemical complex in Linfen, China. The new unit is expected to produce 300,000 metric tons per year of polypropylene and 300,000 metric tons per year of polyvinyl alcohol. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
