KBR remains positive about LNG sector growth

KBR Inc., a leading LNG and energy engineering company, has announced third quarter net income of US$ 30 million, compared to a net loss of US$ 47 million in the comparable period of 2013.

Consolidated revenue in the third quarter of 2014 was US$ 1.7 billion compared to US$ 1.8 billion in the third quarter of 2013.

Comments

Commenting on the results, Stuart Bradie, President and CEO, stated: “Our third quarter consolidated results improved sequentially from the second quarter and reflect strong performance in our Gas Monetisation and Hydrocarbons segments. Our fabrication and module assembly projects in Canada were stable and our businesses across Services were profitable.

“Bookings for our Hydrocarbons business segment were strong at US$ 1 billion, with US$ 900 million in reimbursable, largely Downstream EPC and Oil and Gas Services work. In the third quarter, we were awarded front end engineering and design (FEED) work for the Tangguh train 3 Liquefied Natural Gas (LNG) project and the Eni Mozambique Floating Liquefied Natural Gas (FLNG) project, and work on the BP Mad Dog Phase II project in the Gulf of Mexico continued.

Outlook

“Looking forward, while the recent decline in oil prices may present challenges to certain near-term upstream project economics, low natural gas prices continue to result in a number of good engineering, procurement and construction (EPC) prospects in the LNG, Downstream, and Chemicals markets and we are well placed to capitalise on these opportunities.”

Gas Monetisation

Gas Monetisation revenue was US$ 343 million, down US$ 194 million, primarily due to reduced business volumes on projects that were mainly completed in 2013 as well as reduced volumes on an LNG project in Australia as this project moves toward completion.

Gross profit was US$ 41 million, down US$ 95 million, primarily due to US$ 71 million in renegotiated fees and cost recoveries recognised on an LNG project in Q3 2013 that did not reoccur in 2014. The Q3 2014 results were also impacted by higher bid and proposal costs related to multi-billion dollar EPC projects that the company is pursuing in 2014 for expected awards in 2015.

Gas Monetisation equity in earnings of unconsolidated affiliates was US$ 23 million, up US$ 4 million, due to increased activity on an LNG project in Australia.

LNG highlights

• KBR and its joint venture partnership with PT Rekayasa Industries, JGC Corporation and PT JGC Indonesia, the RJK JV, was awarded the onshore FEED contract by BP for a third liquefaction train at the Tangguh LNG Project in West Papua province, Indonesia.
• The KD Consortium, created in 2014 by KBR, Inc. and Daewoo Shipbuilding & Marine Engineering Company, Ltd (KSE: DSME), was awarded a FEED contract by Eni East Africa SpA for a floating liquefied natural gas (FLNG) facility for the Coral South Development Project.

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/05112014/kbr-reports-third-quarter-lng-results-1736/