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CB&I awarded $150 million contract for nuclear power vessel
By T.L. HAMILTON
Westinghouse Electric Company has awarded Chicago Bridge & Iron a second contract to build the containment vessels for a nuclear power plant expansion in the southeastern United States.
The engineering, procurement, fabrication and construction contract is valued at $150 million.
“It’s an exciting award for us,” said Jan Sieving, spokesperson for CB&I, which has administrative office in The Woodlands. “This is our second (contract) for the containment vessels, so that’s $250 million in awards.”
Market analysts’ reactions to the contract have been mixed, said Byron Ellis of Ellis & Ellis Financial Services in The Woodlands.
CB&I stock has been through a combination of upgrades and downgrades in recent days, he said.
The company’s stock on the New York Stock Exchange ended at $10.03 in Wednesday trading, down two cents from Tuesday, and down 84 percent from it’s 52-week high of $63.50.
At least one analyst was pessimistic about the entire power market, Ellis said.
“But these analysts’ comments you have to take with a grain of salt,” he said. “If the company is rated as ‘overweight’ then I’ll assume you should hold onto your stock. If it’s rated a ‘buy’ I drop it down a notch. They’re usually overly-optimistic.”
CB&I has been tagged by some analysts as a company to watch in 2009.
“We anticipate there will be other projects down the road,” Sieving said. “We think the U.S. will have an active growing nuclear energy industry.”
Analysts expect an increase in contracts due to President-elect Barack Obama’s proposed energy plans.
“A handful of giant engineering firms will need to be everywhere at once, building new power plants and lines as they rebuild roads and bridges,” said Bill Paul, former Wall Street Journal reporter and current editor of EnergyTechStocks.com, in his blog on Tuesday. “Investors should pay attention to Chicago Bridge & Iron, Foster Wheeler, Halliburton, Jacobs Engineering and McDermott.”
Obama often mentioned nuclear power as a viable method of energy creation in his campaign speeches.
“Nuclear power represents more than 70 percent of our noncarbon generated electricity,” states a fact sheet on Obama’s campaign website. “It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option.”
Ellis said CB&I falls into the category of infrastructure, and may possibly benefit from Obama’s plans.
“I think you need to keep a keen eye on anything involving infrastructure, energy, roads or bridges this upcoming year,” Ellis said. “I don’t know if they’ll make money yet because it’s too soon to tell, but keep watching.”
The two containment vessels CB&I will build for Westinghouse will be about 120 feet in diameter and 215 feet high, and will house the power company’s next generation AP1000 nuclear reactors, each with a capacity of 1,117 megawatts.
The design phase will begin immediately and fabrication will begin in 2009, with the first vessel scheduled for completion in 2015.
In October, CB&I announced its first contract with Westinghouse to build the containment vessels for another nuclear power plant expansion in the southeastern U.S.
The company’s corporate headquarters are in The Netherlands, and it’s administrative headquarters are in The Woodlands. It also has offices in South Africa and Egypt.
CB&I has built 75 percent of the containment vessels for nuclear plants currently operating in the U.S., according to company reports.
The engineering, procurement, fabrication and construction contract is valued at $150 million.
“It’s an exciting award for us,” said Jan Sieving, spokesperson for CB&I, which has administrative office in The Woodlands. “This is our second (contract) for the containment vessels, so that’s $250 million in awards.”
Market analysts’ reactions to the contract have been mixed, said Byron Ellis of Ellis & Ellis Financial Services in The Woodlands.
CB&I stock has been through a combination of upgrades and downgrades in recent days, he said.
The company’s stock on the New York Stock Exchange ended at $10.03 in Wednesday trading, down two cents from Tuesday, and down 84 percent from it’s 52-week high of $63.50.
At least one analyst was pessimistic about the entire power market, Ellis said.
“But these analysts’ comments you have to take with a grain of salt,” he said. “If the company is rated as ‘overweight’ then I’ll assume you should hold onto your stock. If it’s rated a ‘buy’ I drop it down a notch. They’re usually overly-optimistic.”
CB&I has been tagged by some analysts as a company to watch in 2009.
“We anticipate there will be other projects down the road,” Sieving said. “We think the U.S. will have an active growing nuclear energy industry.”
Analysts expect an increase in contracts due to President-elect Barack Obama’s proposed energy plans.
“A handful of giant engineering firms will need to be everywhere at once, building new power plants and lines as they rebuild roads and bridges,” said Bill Paul, former Wall Street Journal reporter and current editor of EnergyTechStocks.com, in his blog on Tuesday. “Investors should pay attention to Chicago Bridge & Iron, Foster Wheeler, Halliburton, Jacobs Engineering and McDermott.”
Obama often mentioned nuclear power as a viable method of energy creation in his campaign speeches.
“Nuclear power represents more than 70 percent of our noncarbon generated electricity,” states a fact sheet on Obama’s campaign website. “It is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power as an option.”
Ellis said CB&I falls into the category of infrastructure, and may possibly benefit from Obama’s plans.
“I think you need to keep a keen eye on anything involving infrastructure, energy, roads or bridges this upcoming year,” Ellis said. “I don’t know if they’ll make money yet because it’s too soon to tell, but keep watching.”
The two containment vessels CB&I will build for Westinghouse will be about 120 feet in diameter and 215 feet high, and will house the power company’s next generation AP1000 nuclear reactors, each with a capacity of 1,117 megawatts.
The design phase will begin immediately and fabrication will begin in 2009, with the first vessel scheduled for completion in 2015.
In October, CB&I announced its first contract with Westinghouse to build the containment vessels for another nuclear power plant expansion in the southeastern U.S.
The company’s corporate headquarters are in The Netherlands, and it’s administrative headquarters are in The Woodlands. It also has offices in South Africa and Egypt.
CB&I has built 75 percent of the containment vessels for nuclear plants currently operating in the U.S., according to company reports.
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