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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy services provider Wood Group plc (Aberdeen, Scotland) continued to see fallout from the COVID-19 pandemic in the first half of 2021, as investment decisions from several of its biggest clients were delayed amid the Delta variant's wrath. But the UK-based engineering giant expects many of its ongoing projects--including many in the renewable-energy sector--to produce rosier results for the remainder of the year. Industrial Info is tracking more than $46 billion worth of projects worldwide involving Wood Group, including more than $5.2 billion worth in the U.S.
Click on the image at right for a graph detailing Wood Group's active projects across the U.S., according to the total investments from parent companies of the associated plants.
"[Our] projects order book is down around 3% compared to December 2020, but we are encouraged by both recent awards across all our markets and projected second half awards," said David Kemp, the chief financial officer of Wood Group, in a biannual earnings-related conference call. "[Our] operations order book reflects improving demand in conventional energy with the recent growth in order book reflecting renewal of a number of multi-year contracts and new wins." He noted that Wood Groups current orders reflect a "lower risk profile," as many of its larger engineering, procurement and construction (EPC) contracts, particularly in the Chemical Processing Industry, have been completed.
Wood Group Mustang, an engineering-focused subsidiary that handles most upstream and downstream work in the Oil & Gas Industry, is signed to a major project on the ever-busy Texas Gulf Coast: Phillips 66's (NYSE:PSX) (Houston, Texas) Bluewater Terminal Project near Corpus Christi, Texas. The facility would load crude oil from the Permian and Eagle Ford plays onto 16 Very Large Crude Carriers (VLCCs) per month, each of which would be able to hold up to 2 million barrels, for export around the world. Wood Group Mustang is expected to provide EPC services following the owners' final investment decision, currently expected in first-quarter 2022.
The project took a major step forward in December, when commissioners for the Port of Corpus Christi unanimously approved a lease agreement between the port and Bluewater Texas Terminal LLC, a joint venture set up by Phillips 66 and Trafigura Group Pty Limited, which allows Bluewater to build related offices and a monitoring station on Harbor Island, which is next to the terminal site, according to the San Antonio Business Journal. It also permits Bluewater to build a 27-mile pair of crude oil pipelines from the coast to a pair of loading docks. Bluewater and its parent companies continue to seek necessary federal and state permits, which could further delay the project's approval. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Terminal Project Database can click here for detailed reports on the terminal and pipeline.
Kemp acknowledged in the conference call that the COVID-19 pandemic was continuing to have an impact on Wood Group's bottom line: "Revenue of $3.2 billion [for the first half of 2021] was down around 23%, as the ongoing impacts of COVID-19 continued to create challenging market conditions." But he noted that the revenue "reflects improving market conditions," as about half of the reduction was attributed to the completion of high-priority projects, while demand for new projects in the "built environment" (mostly urban and suburban areas) and the renewable-energy market remained strong.
"In renewables, we've doubled the size of our business in 2020 and see good opportunities in our order book, and [in] our solar and wind business in the U.S.," Kemp said. In Virginia, Wood Group is performing EPC services for two solar-generation facilities for Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia): the $300 million Fort Powhatan Solar Plant in Disputanta, which is designed to generate 150 megawatts (MW) from 525,000 photovoltaic (PV) panels, and the $130 million Arlington Solar Plant in Chatham, which is designed to generate 120 MW from 456,000 PV panels. Subscribers can learn more from Industrial Info's reports on the Fort Powhatan and Arlington projects.
Robin Watson, the chief executive officer of Wood Group, said in the conference call that while the ongoing transition to renewable energy will impact capital investment in many of Wood Group's newer assets, "conventional energy will remain a material part of the energy mix for some time to come." Watson also said the company had picked up new work in conventional energy and the Chemical Processing Industry, despite many high-profile projects in these areas wrapping up over the past year. Olin Corporation (NYSE:OLN) (Clayton, Missouri) signed Wood Group to its multi-year, $30 million upgrade and replacement plan at its organic chemicals plant in Freeport, Texas. Olin plans to replace outdated control systems on 20 units. Subscribers can learn more from Industrial Info's project report.
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.
Click on the image at right for a graph detailing Wood Group's active projects across the U.S., according to the total investments from parent companies of the associated plants."[Our] projects order book is down around 3% compared to December 2020, but we are encouraged by both recent awards across all our markets and projected second half awards," said David Kemp, the chief financial officer of Wood Group, in a biannual earnings-related conference call. "[Our] operations order book reflects improving demand in conventional energy with the recent growth in order book reflecting renewal of a number of multi-year contracts and new wins." He noted that Wood Groups current orders reflect a "lower risk profile," as many of its larger engineering, procurement and construction (EPC) contracts, particularly in the Chemical Processing Industry, have been completed.
Wood Group Mustang, an engineering-focused subsidiary that handles most upstream and downstream work in the Oil & Gas Industry, is signed to a major project on the ever-busy Texas Gulf Coast: Phillips 66's (NYSE:PSX) (Houston, Texas) Bluewater Terminal Project near Corpus Christi, Texas. The facility would load crude oil from the Permian and Eagle Ford plays onto 16 Very Large Crude Carriers (VLCCs) per month, each of which would be able to hold up to 2 million barrels, for export around the world. Wood Group Mustang is expected to provide EPC services following the owners' final investment decision, currently expected in first-quarter 2022.
The project took a major step forward in December, when commissioners for the Port of Corpus Christi unanimously approved a lease agreement between the port and Bluewater Texas Terminal LLC, a joint venture set up by Phillips 66 and Trafigura Group Pty Limited, which allows Bluewater to build related offices and a monitoring station on Harbor Island, which is next to the terminal site, according to the San Antonio Business Journal. It also permits Bluewater to build a 27-mile pair of crude oil pipelines from the coast to a pair of loading docks. Bluewater and its parent companies continue to seek necessary federal and state permits, which could further delay the project's approval. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Terminal Project Database can click here for detailed reports on the terminal and pipeline.
Kemp acknowledged in the conference call that the COVID-19 pandemic was continuing to have an impact on Wood Group's bottom line: "Revenue of $3.2 billion [for the first half of 2021] was down around 23%, as the ongoing impacts of COVID-19 continued to create challenging market conditions." But he noted that the revenue "reflects improving market conditions," as about half of the reduction was attributed to the completion of high-priority projects, while demand for new projects in the "built environment" (mostly urban and suburban areas) and the renewable-energy market remained strong.
"In renewables, we've doubled the size of our business in 2020 and see good opportunities in our order book, and [in] our solar and wind business in the U.S.," Kemp said. In Virginia, Wood Group is performing EPC services for two solar-generation facilities for Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia): the $300 million Fort Powhatan Solar Plant in Disputanta, which is designed to generate 150 megawatts (MW) from 525,000 photovoltaic (PV) panels, and the $130 million Arlington Solar Plant in Chatham, which is designed to generate 120 MW from 456,000 PV panels. Subscribers can learn more from Industrial Info's reports on the Fort Powhatan and Arlington projects.
Robin Watson, the chief executive officer of Wood Group, said in the conference call that while the ongoing transition to renewable energy will impact capital investment in many of Wood Group's newer assets, "conventional energy will remain a material part of the energy mix for some time to come." Watson also said the company had picked up new work in conventional energy and the Chemical Processing Industry, despite many high-profile projects in these areas wrapping up over the past year. Olin Corporation (NYSE:OLN) (Clayton, Missouri) signed Wood Group to its multi-year, $30 million upgrade and replacement plan at its organic chemicals plant in Freeport, Texas. Olin plans to replace outdated control systems on 20 units. Subscribers can learn more from Industrial Info's project report.
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.
