KBR (KBR) has announced that it has been awarded two contracts by Ningxia Baofeng Energy Group Co. Ltd for its 500KTA coal to olefins project & 500KTA C2-C5 comprehensive utilization project to be built in Ningdong Town, Ningxia, China.
Under the terms of the deal, KBR will provide process technology licensing and process design packages for this project, which will have an annual production capacity of one million tons of olefins. Once completed, the complex will be the largest single-train methanol to olefins (MTO) plant in the world.
KBR says that it will use a combination of its Score steam cracking and MTO recovery technologies to achieve Baofeng Energy’s project objectives of highest yields and lowest capital investment.
The SCORE steam cracking unit will convert the ethane and propane feedstock into ethylene and propylene, which are then separated and further purified in the MTO recovery section.
“We are proud that Baofeng Energy has selected KBR for this breakthrough world-scale MTO complex,” said Doug Kelly of KBR. “This award is a reaffirmation of our continued commitment to helping our clients maintain their competitive edge through technological advancements and delivering the best return on their investments.” (See KBR stock analysis at TipRanks)
Following KBR’s 2Q results earlier this month, Cowen & Co analyst Gautam Khanna reiterated a Buy rating on the stock with a $29 price target saying the “stock remains too cheap to ignore.”
“KBR’s Q2 was mixed, but early C21 color suggests EPS growth will resume before considering cash deployment,” Khanna told investors. “However, the composition of the growth likely differs from Street expectations, as TS [technology solutions]/Energy EBITDA is expected to nearly double vs. a more muted rise at GS [government solutions].”
In line with Khanna, Wall Street analysts have a bullish outlook on the stock. KBR scores 6 unanimous Buy ratings which make it a Strong Buy analyst consensus. With shares down 21% so far this year, the $29.67 average price target indicates 24% upside potential from current levels.
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