Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



KBR to focus on government contracts, quit natural gas, energy business

Engineering and construction firm KBR Inc will exit most of its LNG construction and other energy projects, it told investors and employees, as customers pull back on energy investments.

The company will refocus on government contracts and technology businesses, Chief Executive Stuart Bradie wrote to employees on Monday. It will “no longer engage in lump sum, blue collar construction services,” saying the COVID-19 pandemic accelerated the decision to leave fixed-contract energy projects.

KBR held contracts for engineering and construction services for several LNG projects, including at Freeport LNG in Texas, Pieridae Energy Ltd’s proposed Goldboro LNG facility in Nova Scotia, Canada, and Glenfarne Group’s Magnolia LNG project in Louisiana.

Freeport LNG has delayed its project to 2021 and planned to seek new bids for construction, spokeswoman Heather Browne said. Pieridae and Glenfarne did not respond to requests for comment on Monday.

KBR declined to discuss potential impairments on its current LNG projects, but pointed to an investor webcast last Tuesday that said it expected the energy business to be “marginally profitable” this year. It will disclose more details with second-quarter results next month, an executive said in the webcast.

About 85% of the company’s forecast earnings for 2020 are expected to derive from government business, up from about 11% in 2015, Bradie told investors during the call.

The changes will mean “significant realignment in some offices, a smaller office footprint as we transform to the new structure and the new way of working, and the exiting of certain markets/geographies and offices,” the email said.

Reporting by Jennifer Hiller in Houston; Editing by Peter Cooney


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
Global gas is facing a demand hit from the coronavirus pandemic and a structural oversupply in the LNG market following the startups of new LNG export projects in Australia and the U.S.
Industry Focus: Russia Accelerates Fight For Global Gas Export Market Share
-Eugene Gerden
Russia aims to ramp up its efforts to gain more gas export market share this year, despite an unfavorable business environment and growing pressure from major competitors.
Regional Focus: South Africa’s transport strategy to shape country’s gas sector
-Shem Oirere
South Africa’s Gas Utilization Master Plan outlines how the gas sector will be developed. As the country proceeds with the plan,


Best Practices in Supporting Front Line HPI Operations Remotely in Response to Covid-19

Register Now

To ensure employee safety, HPI companies had to quickly pivot to a remote support model with many subject matter experts (SMEs) and engineering staff working remotely supporting front line, sequestered critical operations and field operators.

What are the best practices and lessons learned from this new remote operational support model? What have been technologies and work processes that are enabling effective and efficient remote operational support? Is this the “new norm” going forward even when the impact of Covid-19 abates? If not, how will remote support of critical operations be changed?

If this topic and questions are of interest to you and your organization, please attend this special HPI webinar with a panel of leading industry customer experts who will discuss their perspectives. Attendees will have the opportunity to ask questions for the panelists.

May 18, 2020 10:00 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2020 Gulf Publishing Holdings LLC.