Saipem S.p.A. SAPMF, a leading engineering and construction services firm for the energy sector, recently announced the award of a new Engineering, Procurement, Construction and Installation (“EPCI”) contract in the Kutei Basin, East Kalimantan, Indonesia. The contract was secured by SAPMF’s Indonesian subsidiary in partnership with PT Tripatra Engineers and Constructors and involves the engineering, procurement, construction and installation of a floating, production, storage and offloading (FPSO) facility for the Kutei North Hub Field Development Project. The EPCI contract was awarded by Eni North Ganal.
Project Scope and Execution Timeline
An FPSO unit stores and processes oil and natural gas obtained from offshore oilfields until they can be transferred to tankers for transportation. The scope of the contract covers end-to-end EPCI services, including project management, detailed engineering, procurement of essential materials and equipment, fabrication and construction, and installation. Saipem is also responsible for the commissioning and start-up of the vessel. The estimated duration of the contract is 48 months. The company also stated that its share of the project is valued at $2 billion.
Kutei North Hub Development Project Details
The Kutei North Hub Development involves the tie-back of a subsea development to the new FPSO. In addition, a new gas export pipeline will transport the produced natural gas to the Bontang LNG Plant for liquefaction and export, as well as to domestic markets through the East Kalimantan System. The project entails drilling 16 offshore producing wells at depths of 1,700-2,000 meters. The FPSO unit is expected to have a processing capacity of 1 billion standard cubic feet per day (bscf/d) of natural gas, along with 90,000 barrels of condensate per day.
The contract reinforces Saipem’s competitive position in the growing floating production market. It also adds to Saipem’s current backlog, providing future revenue visibility.
SAPMF’s Zacks Rank and Other Key Picks
SAPMF currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the energy sector are Cenovus Energy CVE, Par Pacific Holdings PARR and FuelCell Energy FCEL. While Cenovus Energy and Par Pacific currently sport a Zacks Rank #1 (Strong Buy) each, FuelCell Energy carries a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 stocks here.
Cenovus Energy Inc. is a Canadian integrated energy company with operations spanning the upstream, midstream and downstream sectors. The company is involved in exploration and production from its low-cost oil sands and heavy oil assets in Canada. The strategic MEG Energy acquisition is expected to boost Cenovus Energy's production levels in 2026.
Par Pacific Holdings operates an integrated downstream energy business across the United States, with fuel retail operations in Hawaii, Washington, and Idaho; refining operations in Hawaii, Wyoming, Washington and Montana; and a supporting logistics network. Its refineries have a combined crude oil throughput capacity of 219,000 barrels per day and produce gasoline, diesel, jet fuel, marine fuels, asphalt and other petroleum products.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
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This article originally published on Zacks Investment Research (zacks.com).