Two Added to Jec's Contract List - Analyst Blog
November 10 2011 - 8:00AM
Zacks
Jacobs Engineering Group
Inc. (JEC) recently announced winning of two strategic
contracts – one from Sadara Chemical Company and another from Shell
Downstream Distribution.
Sadara Chemical Company, a joint
venture under formation between affiliates of The
Dow Chemical Company (DOW) and Saudi Arabian Oil
Company (Saudi Aramco) awarded engineering, procurement and
construction management (EPCM) contract to Jacobs for the Chemicals
1 Envelope of Sadara. The operations will take place at Jacobs'
offices in Manchester, UK; Mumbai, India and Al Khobar, Saudi
Arabia.
This award is part of the chemical
project in Jubail Industrial City in Saudi Arabia, the construction
work of which has already started and is scheduled to be completed
by early 2015. Production from the first units of this world class
chemical project is expected to begin in the second half of 2015.
The fully integrated complex is designed to comprise 26 chemical
manufacturing units and be one of the largest of its kind in the
world.
Under the terms of the contact,
Jacobs is providing front end engineering design, detailed
engineering services, procurement, inspection, and delivery of
equipment and bulk materials, along with the overall construction
management for the project. The terms of the agreement, however,
has not been disclosed.
The contract from Shell Downstream
Distribution entails offering of project management and engineering
services for Shell's European Program, encompassing program assets
in Austria, the Netherlands, Germany, Luxemburg, Turkey, Italy,
Denmark, Norway and the United Kingdom.
The contract value has not yet been
disclosed and it has been noted that the three-year framework
agreement has an option of a two-year extension. The program will
be led by Jacobs' office in Ghent, Belgium in close association
with the company’s other offices in Cologne, Germany; Milan, Italy;
Stenungsund, Sweden; Glasgow, Scotland; and Mumbai, India.
According to the contract, Jacobs
will be supporting Shell in managing its Regional Capital Program
through the engineering procurement and construction management
(EPCM) model for identified projects. Moreover, the company will be
managing Shell's asset or project information and documents for all
terminal facilities across the region.
Jacobs recently reported buying of
KlingStubbins, a Philadelphia based architectural firm which
provides professional services in planning, architecture,
engineering and interiors. Thus the company’s recent venture along
with its prospective list of contracts will prove encouraging for
the company and eventually strengthen Jacobs’ position in the
infrastructure market worldwide.
Jacobs Engineering Group Inc.
provides services to a variety of industrial, commercial and
government clients across a global network. The company directly
competes with its peers, such as Fluor Corporation
(FLR) and Foster Wheeler AG (FWLT).
We currently hold a Neutral
recommendation on the stock. Jacobs has a Zacks #3 Rank, implying a
short-term (1-3 months) Hold rating.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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