Offshore oilfield equipment manufacturer FMC Technologies Inc. (FTI) has agreed to deliver offshore loading arm systems for the Shell Prelude Floating Liquefied Natural Gas (FLNG) Project in Australia. In this regard, the company has entered into an agreement with Technip France, which represents the Technip Samsung Consortium (TSC).
Per the contract, FMC Technologies will supply seven offshore footless marine loading arms, four for liquefied natural gas and three for liquefied petroleum gas. The equipment will be conceptualized and manufactured at FMC’s Loading Systems business in Sens, France.
In May 2011, the Australian unit of Royal Dutch Shell plc (RDS.A) had given the green signal to TSC to manufacture the floating liquefied natural gas facility. This happens to be the first FLNG unit in the world to be utilized on the Prelude field in offshore Browse Basin, Western Australia.
TSC plans to construct the Prelude facility at the Geoje, Korea located Samsung Heavy Industries shipyard.
Management of FMC Technologies believes that this deal will strengthen its connection to the Prelude venture. In June last year, FMC Technologies received a subsea production and associated topside systems supply contract from Shell.
Houston, Texas-based FMC Technologies is a leading manufacturer and supplier of technology solutions for the energy industry, with 27 manufacturing facilities in 16 countries.
We believe that FMC Technologies is favorably positioned for earnings growth in the coming months based on a diversified product portfolio, specialty service capabilities and proprietary technological expertise. Other positives for the company include a strong backlog position, growing international operations and a favorable outlook for subsea activity levels.
However, with volatile oil and gas fundamentals, a competitive market and weak pricing, we expect the company to perform on par with the industry and maintain our long-term Neutral rating. FMC Technologies currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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