McDermott International Inc. (NYSE:MDR) declared that it has secured a pipeline project for 2017. Per the development, the company is expected to transport and install pipelines and umbilicals in the Fairley and Ampa fields located off the coast of Brunei. The project comprises of transportation and installation for 20 miles of pipelines with the related beach and pipeline crossings, tie-ins, riser installation and pre-commissioning of the completed system.
Investors should know that the assignment will be reflected in the second-quarter 2016 backlog of McDermott as a sizeable project. Most importantly, the award for 2017 is a component of a three-year work installation deal that was inked with Brunei Shell (LON:RDSa) Petroleum Company Sdn. Bhd. during 2014. Brunei Shell Petroleum Company is an affiliate of Asiatic Petroleum Company (Dublin), Ltd which is a subsidiary of Royal Dutch Shell plc RDS.A.
For the 2017 operation in Brunei, McDermott is expected to arrange Derrick Barge 30 vessel. This vessel was used by McDermott for 2015 operation which is among the largest shallow water pipeline projects performed by the company in the last few years. The successful 2015 campaign of McDermott boosted the confidence level of clients that according to the company is the key to getting the recent award.
Incorporated in 1959, Houston, TX-based McDermott is a leading global engineering and construction firm that has a diversified product portfolio, specialty manufacturing and service capabilities, and proprietary technological expertise. Unlike other engineering and construction companies, McDermott is well-entrenched in major offshore energy projects and is one of the few global contractors that can provide a complete array of services – from design to construction.
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As a result, the company carries a Zacks Rank #1 (Strong Buy), which implies that the stock will significantly outperform the broader U.S. equity market over the next one to three months.
Other players in the energy sector that warrant a look include Enbridge Inc. (NYSE:ENB) and Independence Contract Drilling Inc. (NYSE:ICD) . Both these stocks also sport a Zacks Rank #1.
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