WorleyParsons Grows Global Backlog to More than $4 Billion, Despite Many Projects Wrapping Up

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Researched by Industrial Info Resources (Sugar Land, Texas)--Global engineering and consultation leader WorleyParsons (North Sydney, Australia) faced a decline in revenues in its 2017 fiscal year, as a slew of projects wrapped up or began construction, and customers cut back on project spending. But profits improved nonetheless, as the company slashed costs and continued to see increased activity from energy and resource markets. Industrial Info is tracking more than $165 billion in active projects involving WorleyParsons.

The company's backlog increased to A$5.1 billion (US$4.03 billion), up from A$4.2 billion (US$3.32 billion) at the same time last year, with 86 significant awards worth more than A$2.6 billion (US$2.05 billion) secured in the past 12 months. Although revenues dropped 33% to A$5.22 billion (US$4.12 billion), profits jumped more than 43% to A$33.5 million (US$26.4 million).

Among the U.S. projects nearing construction is Panda Power Funds' (Dallas, Texas) $1.2 billion Mattawoman Generating Station in Brandywine, Maryland. The natural gas-fired, combined-cycle (NGCC) power plant is one of five large power plants that will be operating within a 15-mile radius of Brandywine, a suburban community near Washington, D.C., within the next three years. While many in the area welcome the new jobs and tax revenues, others have expressed concerns to state agencies about the potential impact that increased emissions, noise and traffic could have on the community, according to CNN.

Mattawoman is designed to generate 990 megawatts (MW) from a pair of combustion turbines and a steam turbine, all provided by Siemens AG (Paris, France). Site preparation began in last year's third quarter, and completion currently is set for late 2019. For more information, see Industrial Info's project report.

WorleyParsons' services business includes clean-ups at coal-fired facilities and retrofits to reduce their emissions. A string of such projects are underway in South Carolina, including a $98 million ash pond closure, $56 million in ash-handling unit conversions, and the $45 million ash landfill construction at the Winyah Power Station in Georgetown. All three projects are expected to kick off within the next year. Two other projects are underway at the Cross Generating Station in Pineville: a $96 million boiler conversion and ash-handling system upgrade and $90 million ash-handling unit conversions. For more information, see Industrial Info's project reports on Winyah's ash pond closure, unit conversions and landfill, and Cross' boiler conversion and ash-handling unit conversions.

The Minerals, Metals & Chemicals business reported a sharp decline in revenues and now accounts for a smaller share of WorleyParsons' overall slate. Several segments of one of its largest projects, Suncor Energy Incorporated's (NYSE:SU) (Calgary, Alberta) Fort Hills Oil Sands Mine near Fort McMurray, Alberta, is nearing completion, including the $2.5 billion oil sands mine and ore-preparation plant, a $2.5 billion extraction plant and a $2.5 billion froth treatment plant. The mine is expected to produce 110 million tons per year from the oil sands to be processed at the extraction plant, which will comprise two trains, and the froth treatment plant, which will produce 180,000 barrels per day (BBL/d) of bitumen. For more information, see Industrial Info's project reports on the oil sands mine, extraction plant and froth treatment plant.

Suncor recently said that more than 70% of construction on the Fort Hills project is completed. But last month, according to Reuters, it upped its capital costs estimate for the full project to as much as C$17 billion (US$13.54 billion), from C$15.1 billion (US$12.03 billion), and brought forward some project spending that had been earmarked for 2018. This led to an open dispute with partner Total S.A. (NYSE:TOT) (Paris, France), which said it would not provide any more funding for the project. Nonetheless, Suncor's chief executive officer said Fort Hills would begin producing oil by the end of calendar 2017.

WorleyParsons' Middle East business performed particularly well, especially in the services and infrastructure businesses, where it partly offset revenue declines. One of its largest projects under construction in the region is the US$3.7 billion Mostorod Refinery in Cairo, Egypt, a multi-part complex that includes a US$900 million pair of residual hydrocracker and kerosene hydrotreater units, with capacities of 40,800 BBL/d and 8,500 BBL/d, respectively, that will process heavy distillates from the adjacent Cairo Oil Refinery and produce lighter, more valuable petroleum products for the Cairo and Upper Egypt markets.

The complex also will feature US$700 million in offsite and utilities additions and the US$600 million addition of a delayed coker unit, the latter of which will have a capacity of 25,000 BBL/d. Most of the major parts of Mostorod are set to wrap up in the first quarter of 2018. For more information, see Industrial Info's project reports on the hydrocracker and kerosene hydrotreater units, offsite and utilities additions, and delayed coker unit.

"Even while activity levels appear to be improving, conditions remain challenging for our customers," said Andrew Wood, the chief executive officer of WorleyParsons, in a press release. "We are beginning to see the benefits of increased customer activity in some areas. Our process of reshaping and resizing the business has positioned us well to take advantage of more positive developments in market activity."

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/.