McDermott Awarded Ethylene Technology and Extended Basic Engineering Contract in Russia for Two Ethylene Crackers
- The project is the largest ethylene integration project in the world
- McDermott's integrated execution approach makes it uniquely positioned to execute this phase of the project
- Award builds on McDermott's longstanding relationship with CC7
Nov 18, 2019, 06:55 ET
HOUSTON, Nov. 18, 2019 /PRNewswire/ -- McDermott International, Inc. (NYSE: MDR) announced today it has been awarded a *sizeable technology contract from Baltic Chemical Company (BCC) and a *sizeable Extended Basic Engineering (EBE) contract from China National Chemical Engineering No. 7 Construction Company Limited (CC7). The ethane cracking project is owned by Baltic Chemical Complex LLC, a subsidiary of RusGazDobycha.
McDermott's Lummus Technology will provide both the Process Design Package (PDP) Engineering and the license for its olefin production and recovery technology. Lummus Technology's proprietary ethylene steam cracking process is the most widely-applied process for the production of polymer-grade ethylene, representing approximately 40 percent of the world's capacity.
"Lummus Technology has been present in Russia for many years where we have been—and will continue to be—a reliable partner to our many clients here,'' said Leon de Bruyn, Senior Vice President, Lummus Technology. "We are excited to be selected for two world-scale ethylene plants by BCC and bring our reliable, high-yield and energy-efficient steam cracking technology to a project that has so much visibility in the petrochemicals industry."
The project is the largest ethylene integration project in the world. Located near Russia's shores at the Gulf of Finland, the natural gas processing chemical plant will be comprised of two ethylene cracking facilities, each with an annual capacity of 1.4 million tons.
"McDermott's end-to-end infrastructure and technology solutions are an important differentiator for operators in Russia,'' said Tareq Kawash, McDermott's Senior Vice President for Europe, Africa, Russia and Caspian. "The potential future pull-through opportunities related to the Lummus Technology portfolio make us uniquely positioned to execute this phase and future phases of the project."
McDermott has previously partnered with CC7 on the Afipsky Hydrocracker project and the ongoing Lukoil Delayed Coker Unit project.
The extended basic engineering work will primarily be executed from McDermott's downstream Centers of Excellence in The Hague and Brno, Czech Republic.
Work on the project will begin immediately and the contract award will be reflected in McDermott's fourth quarter 2019 backlog.
McDermott's Lummus Technology is a leading licensor of proprietary petrochemicals, refining, gasification and gas processing technologies, and a supplier of proprietary catalysts and related engineering. With a heritage spanning more than 100 years, encompassing approximately 3,400 patents and patent applications, Lummus Technology provides one of the industry's most diversified technology portfolios to the hydrocarbon processing sector.
* - McDermott defines a sizeable contract as between USD $1 million and $50 million.
McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world. As used in this press release, McDermott includes McDermott International, Inc. and its subsidiaries and affiliates. To learn more, visit www.mcdermott.com.
In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about backlog, to the extent backlog may be viewed as an indicator of future revenues or profitability, and statements about the expected value, scope and timing of the project and the potential future pull-through opportunities discussed in this press release. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: adverse changes in the markets in which we operate or credit markets, our inability to successfully execute on contracts in backlog, changes in project design or schedules, the availability of qualified personnel, changes in the terms, scope or timing of contracts, contract cancellations, change orders and other modifications and actions by our customers and other business counterparties, changes in industry norms and adverse outcomes in legal or other dispute resolution proceedings. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2018. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.
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