Market Overview

Chicago Bridge & Iron Awarded CDAlky Technology Contract


Chicago Bridge & Iron Company N.V. CBI recently announced that Valero Refining – New Orleans LLC has selected its CDAlky technology for the Valero's St. Charles Alkylation Project in Norco, Louisiana. The new CDAlky unit is expected to produce 25,000 BPD alkylate from FCC-derived olefin feedstocks, once it becomes functional in 2020.

Under the project, Chicago Bridge & Iron's scope of supply will include basic engineering, CDAlky technology license and proprietary equipment. Touted as a modern low-temperature sulfuric acid alkylation process, CDAlky technology helps in the production of a high-octane, premium gasoline blending component and also reduces maintenance as well as chemicals costs for refineries.

Existing Business Scenario

Moving ahead, Chicago Bridge & Iron anticipates multiple opportunities in its key end markets including the U.S., East Africa and the Middle East. For the United States and Middle East, solid petrochemical investment on ethylene and low feedstock cost are expected to fuel growth. In fact, the company is well placed for major EPC and storage projects in the Asia-Pacific region courtesy of significant increase in demand for LNG worldwide. This apart, it has bright prospects in petrochemical projects in the Middle East as well as the United States, for both Technology and EPC.

Meanwhile, the company is taking concerted efforts to reinvent its supply chain and generate returns greater than the typical margins associated with the engineering and construction projects. Moreover, Chicago Bridge & Iron benefits from its diligent execution of strategies, restructuring and cost-saving initiatives culture. As a result of its continual focus on efficiency, the company has been able to reduce overhead costs. In the past six months, this Zacks Rank #3 (Hold) stock has gained 30.9% outperforming the industry's rally of 14.1%.

However, over the past few quarters, Chicago Bridge & Iron witnessed a precipitous decline in capital investments that has severely marred its financials. Also, like most of the companies operating in the energy domain, particularly oil and gas sector, volatility in commodity pricing continues to be a major drag for the company's profitability.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributorsNews Contracts


Related Articles (CBI)

View Comments and Join the Discussion!

Autodesk To Report Q4 Earnings: What's In The Cards?

Despite A Pristine Q4, Stifel Downgrades VMWare On Overhang From Parent Dell Technologies (NYSE:DVMT)