KBR Wins Refinery FEED Contract
Leading construction major KBR Inc. (KBR) recently announced that it had won a front-end engineering and design (FEEDQ) contract for a crude oil refinery revamp project from an undisclosed client. The refinery to be refurbished is situated in the Midwest U.S. and is one of the oldest operating refineries in the country.
The project will begin with a feasibility study, during which KBR will establish the optimum economic configuration required to increase heavy crude processing capacity and flexibility. The refinery currently processes light sweet crude oil.
With the proposed revamp, the refinery intends to take advantage of the price fluctuations in the crude oil market and gain access to process heavier sour crude oils.
Of late, KBR has been receiving a series of FEED contracts. A few weeks back, it won a FEED deal from multinational chemicals company INEOS Olefins & Polymers USA (:INEOS) to construct a high-density polyethylene (:HDPE) plant in the Americas. Though the financial details of the deal were not disclosed, the facility is expected to produce 470 kilotons per annum of bimodal HDPE.
The company’s order pipeline primarily comprises FEED analysis of key projects including Chevron-operated Gorgon LNG 4 project and two Canadian LNG projects, among others.
KBR is an industrial construction and engineering facility provider, offering services to the hydrocarbon, chemical and petrochemical industries. Going forward, as the demand for shale gas continues to grow, we expect the company to secure more contracts in the long run.
Currently, KBR carries a Zacks Rank #3 (Hold). Better-placed stocks in the same sector that are worth a look include Masco Corp. (MAS), Meritage Homes Corp. (MTH) and Potlatch Corp. (PCH). All of these stocks carry a Zacks Rank #2 (Buy) each.
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