Jacobs Engineering Receives EPC and Management Consultancy Contract from India's Chennai

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's Chennai Petroleum Corporation Limited (BSE:500110) (CPCL) (Chennai, Tamil Nadu) has awarded an engineering, procurement and construction (EPC) and management consultancy services contract for its resid upgrade project at Manali in Tamil Nadu to Jacobs Engineering Group Incorporated (NYSE:JEC) (Pasadena, California). The project will include revamping of the hydro-cracker facility; a greenfield coke yard unit; a $650 million delayed-coking unit (DCU); a sulfur-recovery unit; and other allied facilities. As part of the agreement, Jacobs Engineering will provide detailed feasibility reports; process packages for offsite facilities; project management services for the sulfur and coking blocks; and EPC and management services for the entire project.

Jacobs Engineering is boosting its profile in global engineering and project management services. For the second quarter of 2010, on revenues of $2.6 billion, the company's net earnings were $77.5 million. Last fiscal year, during the same period, Jacobs Engineering recorded revenues of $3 billion and net earnings of $109.3 million. In the last five months, Jacobs Engineering acquired two professional services companies. In February, the company acquired water treatment and consulting company, Jordan, Jones and Goulding (Atlanta, Georgia). In December last year, the company bought out 1,500-member Tybrin Corporation (Pasadena, California). Recently, the company secured a three-year master services contract from E.I. du Pont de Nemours & Company (NYSE:DD) (Wilmington, Delaware) covering production facilities in Europe, North America and Asia.

CPCL, which is part of public sector energy enterprise Indian Oil Corporation Limited (BSE: 530965) (IOC) (Mumbai), is planning to invest nearly $2.23 billion on refinery expansions and other projects. Earlier, the company had planned a new 15 million-ton-per-year refinery at Ennore in Tamil Nadu. However, the project did not receive environmental clearance due to its proximity to a wildlife sanctuary. Director of Finance N.C. Sridharan said that although the state government provided an alternate site at Cuddalore, it was not an economically viable option. CPCL is contemplating an addition of a 9 million ton-per-year facility, in the next four to five years, at the 3 million-ton-per-year refinery at Manali.

CPCL operates two refineries with a combined capacity of 10.5 million tons per year. The facility at Manali, near Chennai, is one of the biggest in southern India. The refinery consists of three crude distillation units (CDU); fluidized catalytic cracker units; diesel hydro-desulfurization units; a propylene production facility; and a furfural extraction unit. CPCL is performing debottlenecking activities at one CDU to augment its capacity to 4.4 million tons per year, from 3.8 million tons per year. On completion of the debottlenecking procedures, the total production capability of CPCL is likely to reach 11.1 million tons per year.

In 2009-10, the company procured 150,000 tons per year of crude oil from the KG-D6 block operated by Reliance Industries Limited (BSE:500325) (RIL) (Mumbai) in the Krishna-Godavari Basin, in Andhra Pradesh. This fiscal year, CPCL's crude oil procurement is expected to reach 500,000 tons. By 2013-14, the company also plans to increase the sour crude processing capacity at Manali from 70% to 85%. The second refinery is on the Cauvery Basin, near Nagapattinam in Tamil Nadu. CPCL's products include paraffin wax, superior kerosene, liquefied petroleum gas, bitumen, aviation turbine fuel, naphtha, motor spirit and high-speed diesel.

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