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TechnipFMC (FTI) Wins Major iEPCI Contract in Offshore Malaysia

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·3 min read
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TechnipFMC’s FTI wholly-owned subsidiary FMC Wellhead Equipment Sdn. Bhd. received an integrated Engineering, Procurement, Construction and Installation (iEPCI) contract from Petronas Carigali for the Limbayong deepwater development project off the Malaysia coast.

Petronas Carigali, a subsidiary of PETRONAS, is an exploration and production company, and is fully-owned by the Government of Malaysia. Notably, Petronas is the operator, with a 100% participating interest in the Limbayong Gas Field.

Per the terms of the contract, FMC Wellhead will provide the Front-End Engineering Design (“FEED”) in an effort to limit project expenses. Further, it will oversee the integration, engineering, procurement, construction and installation as well as the implementation of the subsea production system.

The iEPCI contract involves the buildout of 10 deepwater wells along with their tieback to the existing Limbayong Floating Production Storage and Offloading (“FPSO”) unit in Malaysia. Notably, TechnipFMC, through its subsidiary, will design, manufacture, deliver and install subsea equipment, which comprises subsea trees, manifolds, umbilicals, flexible risers, flowlines, jumpers and other subsea hardware necessary for the project.

The project, which is estimated to be around $250-$500 million, is expected to be conducted from TechnipFMC’s Kuala Lumpur office. Importantly, the London-based company will exploit its local manufacturing plants in Malaysia for the preparation of subsea systems and associated resources. On its part, the contract merges TechniFMC’s integrated subsea solution with its Subsea 2.0 products, an advanced product platform that integrates uniformly with iEPCI and offers a more efficient project performance.

Company profile & Price Performance

TechnipFMC is a leading manufacturer and supplier of products, services and fully-integrated technology solutions for the energy industry. It operates through two business segments — Subsea and Surface Technologies.

Shares of the company have underperformed the industry in the past six months. It stock has gained 11.9% compared with the industry’s 16.5% growth.

Zacks Rank & Stocks to Consider

TechnipFMC currently carries a Zack Rank #4 (Sell).

Some better-ranked players in the energy space are Magnolia Oil & Gas Corporation MGY and Delek Logistics Partners, L.P. DKL, each currently sporting a Zacks Rank #1 (Strong Buy), and Pioneer Natural Resources Company PXD, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Magnolia’s earnings for 2021 are expected to rise 21.1% year over year.

Delek Logistics’s earnings for 2021 are anticipated to increase 7.3% year over year.

Pioneer’s earnings for 2021 are expected to grow 32.8% year over year.

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