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FLR Gets Contract for QP

Zacks Equity Research

Fluor Corporation (FLR) received a FEED (Front-End Engineering and Design) contract jointly from Qatar Petroleum and Shell for Al-Karaana Petrochemicals Complex in Ras Laffan Industrial City, Qatar. Fluor will book the contract into the backlog for the first quarter of 2013. However, the contract value is not disclosed.

Qatar Petroleum in collaboration with Royal Dutch Shell's (RDS-A) Global Solutions division intends to carry out this prime petrochemical project in the City, where the two previously developed the world's largest gas-to-liquids plant, Pearl GTL. 

The project is believed to be a foundation for future petrochemical development projects in the Middle East. It will be a world-scale ethane-based cracker and derivatives complex, including two train mono ethylene glycol units using Shell’s proprietary OMEGA (Only MEG Advantaged) technology. The potential capacity will also include linear alpha olefins and oxo alcohol units requiring utilities, infrastructure and offsites. Fluor will operate and guide the execution of the FEED project from its Haarlem office in the Netherlands, with assistance from other global Fluor locations.

Fluor’s is extremely hopeful that the project will not only strengthen the company’s long standing relationship with both Qatar Petroleum and Shell but will also register a record revenue growth in the upcoming quarter since the Middle East is an important area of operations for Fluor. This project can prove to be a launch pad for the company’s future business developments in Qatar.

In the latest reported quarter (4Q12) Fluor’s revenue from the Oil & Gas segment was $9.5 billion, up 19% year over year, driven by new awards and good order backlog. New awards won during the year were approximately $12.6 billion with backlog amounting to $18.2 billion. Petrochemical projects in North America, Europe and Asia aided the backlog of the company.

Fluor currently has a Zacks Rank #3 (Hold) while a few of its competitors Tyco International Ltd. (TYC) and Aecom Corp (ACM) both have a Zacks Rank #2 (Buy).

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