Two More Contracts for Jacobs - Analyst Blog
June 27 2012 - 4:30AM
Zacks
Jacobs Engineering Group
Inc. (JEC), one of the world's largest and most diverse
providers of technical, professional, and construction services,
recently announced winning of two strategic contracts.
The first is a design contract from
Saudi Kayan Petrochemical Company to develop a process design
package (PDP) and front end engineering design (FEED) package
targeted to
build ultra-high-molecular-weight polyethylene (UHMWPE)
plant in the Industrial City of Jubail, Kingdomof Saudi Arabia.
However, the second one is an
extension contract for 2012 from Peoples Gas Light and Coke
Company. The contract includes providing program and construction
management services, alongside consultancy support for Peoples Gas'
accelerated main replacement program (AMRP) in Chicago.
Headquartered in Riyadh, Saudi
Kayan Petrochemical Company is an affiliate of Saudi Basic
Industries Corporation (SABIC). It ranks among the world's top
petrochemical companies and is a market leader in the production of
polyethylene, polypropylene and other advanced thermoplastics,
glycols, methanol and fertilizers. Winning a contract from such a
significant industry player reflects client confidence on Jacobs in
delivering strategic projects.
Jacobs expects this contract to
mark the commencement of a significant and long-term relationship
with SABIC, which will, in turn, strengthen the company’s foothold
in the Kingdomof Saudi Arabia. Value of the contract has not yet
been disclosed by the officials. Jacobs will be executing the
project from its Winnersh, UK and Al-Khobar offices.
On the other hand, the contract
from the regulated natural gas delivery company Peoples Gas, a
subsidiary of Integrys Energy Group Inc. (TEG),
involves upgrading the existing low-pressure gas distribution
system to a modern, safe and reliable medium-pressure system. This
$2.5 billion investment program is the largest single capital
investment undertaking in Peoples Gas' history.
Awarding an extension contract with
such complex project reflects client satisfaction on Jacobs and
holds the sheer hope of retaining the long standing relationship in
times ahead.
Jacobs provides stiff competition
to other industry players including Fluor Corporation
(FLR) and Foster
Wheeler AG (FWLT). We
currently maintain a Neutral recommendation on the company. The
stock also bears a Zacks #3 Rank, which implies 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
INTEGRYS ENERGY (TEG): Free Stock Analysis Report
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