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Chicago Bridge & Iron Wins 3 Back-to-Back Deals Worth $200M

Zacks Equity Research

Chicago Bridge & Iron (CBI) secured three contracts valued over $200 million yesterday. The first one was a renewal of contract in the leading global speciality chemicals industry for long-term maintenance, operations, engineering and other industrial services at multiple chemical facilities across the U.S. This contract renewal opens up opportunities worth $110 million for Chicago Bridge & Iron.

The second was awarded by LSB Industries Inc. (LXU) – a subsidiary of El Dorado Ammonia L.L.C. The scope of this deal requires Chicago Bridge & Iron to provide engineering, procurement, fabrication and construction services for a 30,000 ton, full-containment, low-temperature ammonia storage tank. This storage tank is an essential requirement for LSB's ammonia plant expansion in El Dorado, AR. Notably, Chicago Bridge & Iron is a leading constructor of low temperature storage tanks.

The third contract was a front end engineering and design (:FEED) one from NefteGazIndustriya, LLC for the latter’s Afipsky Oil Refinery in Krasnodar, Russia. Apart from the FEED services, the $90 million contract requires Chicago Bridge & Iron to provide technology licenses for the project.

Per this contract, Chicago Bridge & Iron will provide FEED services to multiple new process units, which include a 2.5 million ton annual production hydrocracker unit licensed by Chevron Lummus Global – a joint venture between Chicago Bridge & Iron and Chevron Corporation (CVX). FEED services will also be provided to the hydrogen and sulfur units licensed by Chicago Bridge & Iron and other associated units. Additionally, Chicago Bridge & Iron will provide technology and FEED services for a crude distillation/vacuum distillation/visbreaker complex. For this, the company will employ the Shell Soaker Visbreaking technology which is jointly licensed by it and Shell (RDS.A). 

Chicago Bridge & Iron primarily provides designing, engineering, construction, fabrication, maintenance and environmental services to government enterprises. The stock currently has a Zacks Rank #3 (Hold).

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