Exxon, SABIC Award Kemya Contracts - Analyst Blog
May 16 2011 - 8:30AM
Zacks
Oil giant ExxonMobil
Corp.’s (XOM) affiliate, ExxonMobil Chemical and Saudi
Basic Industries Corp., (SABIC) awarded engineering and design
contracts for their joint synthetic rubber project, Kemya, in Saudi
Arabia.
The contracts cover front-end
engineering and design (FEED) work for the process units of the
Kemya project at Jubail on the Gulf coast with U.S. firm
Jacobs Engineering Group Inc (JEC) and Japan’s
Mitsui Engineering & Shipbuilding. Additionally, Fluor
Transworld Services Inc. has also been awarded to execute FEED for
the associated support facilities.
Al-Jubail Petrochemical Company
(Kemya) is a 50:50 joint venture between SABIC and Exxon Chemical
Arabia Inc., a subsidiary of ExxonMobil Chemical and is expected to
generate 400,000 metric tons a year of rubber, carbon black and
synthetic polymers for domestic as well as international needs.
Although SABIC did not disclose the contract values or outline any
project schedule, in a separate release ExxonMobil Chemical
indicated that it would cost $5 billion.
The technology for the facility has
been licensed from Goodyear Tire and Rubber
Company (GT) and Continental Carbon Company. Additionally,
a technology development and marketing was dealt out to Continental
Carbon Company for carbon black produced at the planned plant.
Saudi Basic Industries Corporation
is the world’s fifth largest petrochemicals company, engaged in the
production of polypropylene, polyethylene and other advanced
thermoplastics, glycols, methanol and fertilizers.
Irving, Texas-based ExxonMobil
Corporation, the world’s largest publicly traded oil company,
remains occupied in the exploration and production of oil and
natural gas, refining and marketing of petroleum products,
manufacturing of chemicals, and other energy-related businesses.
Its major competitors are Chevron Corp. (CVX) and
ConocoPhillips (COP).
ExxonMobil currently holds a Zacks
#2 Rank, which is equivalent to a short-term Buy rating. We
currently maintain our long-term Neutral recommendation for the
company.
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