Amec Foster Wheeler awarded $604m contract with Yuhang Chemical
(ShareCast News) - Amec Foster Wheeler has been awarded a $604m engineering, procurement and construction (EPC) fixed price contract, it announced on Wednesday, for part of a $1.85bn methanol plant being developed by Yuhuang Chemical, a US-based subsidiary of China's Shandong Yuhuang Chemical Company.
The FTSE 250 firm said the first phase of the project, which includes the construction of a 1.8 million-tonne per annum methanol plant, is being built at YCI's 1,300-acre site in St. James Parish, Louisiana.
It said the contract award reflected Amec Foster Wheeler's strategy to grow both its chemicals business - as demand increases due to comparatively low oil and gas prices - and its EPC portfolio.
"We are very pleased to continue working with Amec Foster Wheeler to complete on time and budget the project in order to start the distribution of the IMPCA* quality methanol produced at the plant in Q4-2019," said YCI president Dr Charlie Yao.
Amec's board said the award followed the successful completion of an earlier phase of work at the plant awarded to the company in 2015, covering engineering, project management, procurement and early construction services.
The "deep knowledge" of the plant gained over the last two years, coupled with the recent local construction experience of Amec Foster Wheeler's power and process business, gave the company an advantage for both contractor and client, the board explained.
It added that the power and process business had successfully executed $3bn of lump sum EPC work in the last three years.
In the latest contract award, Amec Foster Wheeler said it will combine the expertise and skills of its oil, gas and chemicals and its power and process businesses to carry out specific infrastructure and utilities engineering work, the procurement of bulk items and selected tagged equipment, and the construction of the methanol plant.
In line with the 'full notice to proceed', $604m will be added to the company's order book in the second half of the year.
"I'm delighted that we have been entrusted to continue supporting YCI on the largest grassroots foreign direct investment by a Chinese company on the Gulf Coast of the United States," commented Amec Foster Wheeler chief executive Jonathan Lewis.
"Winning this contract is a further demonstration of how we are leveraging our multi-market capabilities to better serve our clients, extend our presence in high-growth areas, such as the chemicals market, and contribute to the growth of our order book.
"We look forward to working with YCI to meet the project's challenges, and delivering safely and successfully this new world-scale facility to operate at full capacity."