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KBR Receives FEED Contract

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Recently, KBR Ltd. (KBR) announced that it received a front-end engineering design (:FFED) contract from Emirates National Oil Company LLC to upgrade the latter’s condensate refinery at Jebel Ali. The contract will be included in the hydrocarbon segment under its first-quarter 2014 backlog. Financial terms of the deal were not disclosed.

Emirates National Oil Company is wholly owned by the government of Dubai and supports the oil, chemical, gas, aviation, shipping, liquid storage, information technology, retail, travel and real estate industries. The present facility of Emirates National Oil Company has two trains of condensate distillation units. Following the upgrade, the plant will have new processing units –jet and diesel hydrotreaters and isomerization unit, and will also facilitate the production of various Euro V grade products, such as, high octane gasoline, low sulfur jet fuel and ultra-low sulfur diesel.

KBR’s hydrocarbon segment provides services ranging from pre-feasibility studies to front-end engineering design through construction and commissioning of process facilities in both remote and developed areas around the world. In the last-reported quarter (fourth-quarter 2013), revenues in the Hydrocarbons segment increased 24.8% year over year to $432 million. The revenue growth was driven by developments in the downstream ammonia, urea and ethylene projects in key regions like North America, Uzbekistan and Azerbaijan.

KBR currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks that can be considered at the moment include VSE Corp. (VSEC), AECOM Technology Corporation (ACM) and Quanta Services, Inc. (PWR), all of which carry a Zacks Rank #2 (Buy).

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