McDermott Awarded Single Largest EPCI Offshore Contract for Saudi Aramco

McDermott International Inc. (MDR:NYSE) announced that it has been awarded a contract in excess of US$3 billion for Package 1 of Saudi Aramco's Marjan Increment Development Mega-Project to provide engineering, procurement, construction and installation (EPCI) of the Gas-Oil Separation Plant (GOSP), in a consortium with China Offshore Oil Engineering Company (COOEC), a subsidiary of China National Offshore Oil Corporation.

The award reportedly represents the single largest EPCI offshore contract awarded by Saudi Aramco. The Marjan Increment Project will increase production from 500,000 to 800,000 barrels of oil per day, with Package 1 GOSP facilities at the core of the development. The project includes EPCI of a gas-oil separation platform, compression and accommodation facilities. McDermott is leading the consortium with COOEC.

The scope of the project includes the fabrication of over 165,000 tons consisting of six major topside platforms and jackets, 12 bridges and six bridge support platforms and jackets, and over 40 miles of 36-inch oil export trunk lines along with more than 55 miles of 230kV composite subsea cables.

McDermott is a fully-integrated provider of technology, engineering and construction solutions to the energy industry in both shallow water and deepwater construction. The firm designs and builds end-to-end infrastructure and technology solutions from the wellhead to the storage tank and transportation and transformation oil and gas into product. The company employs 32,000 in 54 countries and operates a diversified fleet of specialty marine construction vessels and fabrication facilities.

McDermott shares have been up 10%–15% today in higher than average volume, trading between $9.59–10.99/share. Shares are currently up 12.78% ($10.50/share,+$1.19) over yesterday's close of $9.31. The company's stock is already up over 70% since its low of $5.91/share in late May 2019 and is up 58% year-to-date. However, shares are still down nearly 44% year-over-year and there is a huge short interest of 26.6%.

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