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Researched by Industrial Info Resources (Sugar Land, Texas)--Engineering, procurement and construction (EPC) leader Chicago Bridge & Iron Company N.V. (NYSE:CBI) (CB&I) (The Hague, Netherlands) faced a tough 2017, with revenue declines across most of its segments (particularly Engineering & Construction and Fabrication Services), but remains optimistic following a strong pickup in awards and a pending merger with McDermott International Incorporated (NYSE:MDR) (Houston, Texas). Industrial Info is tracking more than $102 billion in active projects involving CB&I, including $10.7 billion worth that are set to begin construction and $16.2 billion that are set to finish construction in 2018.
CB&I's backlog totaled $11.4 billion at the end of 2017, compared with $13 billion at the end of 2016. But new awards for 2017 hit $5.8 billion, a 17% jump from 2016, largely due to CB&I's presence in the refining and petrochemical markets. New awards totaled $1.28 billion in the fourth quarter alone, a 37% increase from fourth-quarter 2016.
The new year already has brought some significant awards to CB&I, notably a contract from IGP Methanol LLC (Houston, Texas) for front-end engineering and design (FEED) on the $3.6 billion Gulf Coast Methanol Complex in Myrtle Grove, Louisiana, which is designed to be the world's largest methanol production facility. It comprises four units, each valued at $900 million and with a capacity of 5,000 metric tons per day. Haldor Topsøe A/S (Ravnholm, Denmark) is the licensor and technology provider for all four phases.
The full project, which is among many petrochemical plans for the U.S. Gulf Coast that have been spurred by low natural gas prices, took a step forward late last month when IGP received a needed air-quality permit. For more information, see Industrial Info's project reports for Unit 1, Unit 2, Unit 3, and Unit 4, and January 26, 2018, article - IGP Given the Green Light for Gulf Coast Methanol Project.
The Fabrication Services segment's 35.3% increase in new awards for 2017 was due partly to large contracts for storage tanks at LNG, crude oil and refining facilities. Among its projects already under construction is Puget Sound Energy's $275 million Micro-LNG Plant in Tacoma, Washington, which is expected to produce 250,000 gallons per day of LNG plant from 21 million standard cubic feet per day of natural gas; the product will be used by local transportation companies looking to shift to LNG fuel. CB&I also is at work on a $5 million LNG storage tank addition at the site, which will store 8 million gallons of LNG. For more information, see Industrial Info's project reports on the LNG plant and tank addition.
The project faced a setback late last month when the Puget Sound Clean Air Agency announced it would hire a consultant to do an in-depth analysis of the life cycle of greenhouse-gas emissions that would be caused by the plant, according to Washington's The News Tribune. The study must be completed for the project to receive a required air permit, and likely will delay the permit by several months. The review was demanded by environmental activists, the Puyallup Tribe and leaders from 14 other Northwest tribes, according to the newspaper.
CB&I executives noted in a quarterly earnings-related press release that at least one major project is set to wrap up by the end of the month: AES Corporation's (NYSE:AES) (Arlington, Virginia) $600 million IPL Eagle Valley project in Martinsville, Indiana, a natural gas-fired, combined-cycle (NGCC) project that is expected to generate 671 megawatts (MW) from two combustion turbines, two heat-recovery steam generators and a steam turbine, all provided by General Electric (NYSE:GE). Eagle Valley was one of several U.S.-based engineering projects that recorded heavy charges in 2017, shortly before the company agreed to merge with McDermott. For more information, see Industrial Info's project report.
CB&I also resolved compensation-related issues at Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana; CCJV, a joint venture between an affiliate of CB&I and Chiyoda International Corporation, during the fourth quarter. The companies involved now say the project, which includes the construction of three liquefaction trains, each with a capacity of 5 million metric tons per year, should be completed and begin production next year. For more information, see Industrial Info's project report and December 20, 2017, article - Cameron LNG, EPC Provider Resolve Issues in Settlement Agreement.
"A major operating highlight of 2017 was the increase in new awards -- to $5.8 billion -- in what has remained a challenging market," said Patrick K. Mullen, the chief executive officer of CB&I, in the press release. "We expect the strong booking trend to continue, as demonstrated by our early 2018 awards and continued work on major FEED scopes for large projects that have strong fundamentals and should proceed in 2018."
Revenues were reported to be $6.67 billion for the year, a 22.4% decrease from 2016. CB&I incurred a net loss of $1.46 billion, compared with a loss of $313.2 million in 2016. Losses were attributed partly to non-operating items and project charges, including a $1 billion non-cash charge due to a reduction in the carrying value of deferred tax assets; $83.6 million in restructuring charges; $75.3 million in excess interest expense, due to higher accelerated amortization of debt issuance costs; and $101 million in project charges, including $39 million attributed to Cameron LNG.
Last month, the U.S. Federal Trade Commission granted early termination of a required waiting period for the planned, $6 billion merger of CB&I and McDermott. The deal still requires approval from both companies' shareholders and regulatory clearance in Russia.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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/.
CB&I's backlog totaled $11.4 billion at the end of 2017, compared with $13 billion at the end of 2016. But new awards for 2017 hit $5.8 billion, a 17% jump from 2016, largely due to CB&I's presence in the refining and petrochemical markets. New awards totaled $1.28 billion in the fourth quarter alone, a 37% increase from fourth-quarter 2016.
The new year already has brought some significant awards to CB&I, notably a contract from IGP Methanol LLC (Houston, Texas) for front-end engineering and design (FEED) on the $3.6 billion Gulf Coast Methanol Complex in Myrtle Grove, Louisiana, which is designed to be the world's largest methanol production facility. It comprises four units, each valued at $900 million and with a capacity of 5,000 metric tons per day. Haldor Topsøe A/S (Ravnholm, Denmark) is the licensor and technology provider for all four phases.
The full project, which is among many petrochemical plans for the U.S. Gulf Coast that have been spurred by low natural gas prices, took a step forward late last month when IGP received a needed air-quality permit. For more information, see Industrial Info's project reports for Unit 1, Unit 2, Unit 3, and Unit 4, and January 26, 2018, article - IGP Given the Green Light for Gulf Coast Methanol Project.
The Fabrication Services segment's 35.3% increase in new awards for 2017 was due partly to large contracts for storage tanks at LNG, crude oil and refining facilities. Among its projects already under construction is Puget Sound Energy's $275 million Micro-LNG Plant in Tacoma, Washington, which is expected to produce 250,000 gallons per day of LNG plant from 21 million standard cubic feet per day of natural gas; the product will be used by local transportation companies looking to shift to LNG fuel. CB&I also is at work on a $5 million LNG storage tank addition at the site, which will store 8 million gallons of LNG. For more information, see Industrial Info's project reports on the LNG plant and tank addition.
The project faced a setback late last month when the Puget Sound Clean Air Agency announced it would hire a consultant to do an in-depth analysis of the life cycle of greenhouse-gas emissions that would be caused by the plant, according to Washington's The News Tribune. The study must be completed for the project to receive a required air permit, and likely will delay the permit by several months. The review was demanded by environmental activists, the Puyallup Tribe and leaders from 14 other Northwest tribes, according to the newspaper.
CB&I executives noted in a quarterly earnings-related press release that at least one major project is set to wrap up by the end of the month: AES Corporation's (NYSE:AES) (Arlington, Virginia) $600 million IPL Eagle Valley project in Martinsville, Indiana, a natural gas-fired, combined-cycle (NGCC) project that is expected to generate 671 megawatts (MW) from two combustion turbines, two heat-recovery steam generators and a steam turbine, all provided by General Electric (NYSE:GE). Eagle Valley was one of several U.S.-based engineering projects that recorded heavy charges in 2017, shortly before the company agreed to merge with McDermott. For more information, see Industrial Info's project report.
CB&I also resolved compensation-related issues at Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana; CCJV, a joint venture between an affiliate of CB&I and Chiyoda International Corporation, during the fourth quarter. The companies involved now say the project, which includes the construction of three liquefaction trains, each with a capacity of 5 million metric tons per year, should be completed and begin production next year. For more information, see Industrial Info's project report and December 20, 2017, article - Cameron LNG, EPC Provider Resolve Issues in Settlement Agreement.
"A major operating highlight of 2017 was the increase in new awards -- to $5.8 billion -- in what has remained a challenging market," said Patrick K. Mullen, the chief executive officer of CB&I, in the press release. "We expect the strong booking trend to continue, as demonstrated by our early 2018 awards and continued work on major FEED scopes for large projects that have strong fundamentals and should proceed in 2018."
Revenues were reported to be $6.67 billion for the year, a 22.4% decrease from 2016. CB&I incurred a net loss of $1.46 billion, compared with a loss of $313.2 million in 2016. Losses were attributed partly to non-operating items and project charges, including a $1 billion non-cash charge due to a reduction in the carrying value of deferred tax assets; $83.6 million in restructuring charges; $75.3 million in excess interest expense, due to higher accelerated amortization of debt issuance costs; and $101 million in project charges, including $39 million attributed to Cameron LNG.
Last month, the U.S. Federal Trade Commission granted early termination of a required waiting period for the planned, $6 billion merger of CB&I and McDermott. The deal still requires approval from both companies' shareholders and regulatory clearance in Russia.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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/.
