ICA Fluor Awarded Fabrication Contract for Shell’s Heavy Oil Extraction Project in Canada
Fluor Corporation (NYSE: FLR) announced that ICA Fluor, its industrial engineering, fabrication and construction joint venture with Empresas ICA, S.A.B. de C.V. (BMV and NYSE: ICA), signed a contract with Shell Canada Energy to supply modular fabrication and procurement services for 13 well pads for heavy oil extraction at Shell’s Carmon Creek project currently under construction in northern Alberta. The project is expected to produce about 80,000 barrels per day of heavy oil from Shell’s Peace River Operations using steam recovery methods. The initial contract awarded to ICA Fluor is worth US$264 million, and Fluor will book its $132 million share in the fourth quarter of 2014.
“This project is a major step for our company,” said Juan Carlos Santos, director general of ICA Fluor. “We are proud of this certification of our fabrication yards’ capabilities and work processes, and we look forward to supporting Shell on their North American projects.”
ICA Fluor will fabricate the modules at the El Empalme yard, property of its wholly-owned subsidiary, Industria del Hierro, located in Tampico, Tamaulipas, Mexico. The completion is scheduled for December 2017.
“This is a great opportunity for ICA Fluor, for Mexico’s labor force and for the Tampico region,” said Lucía Bustamante, communications and government relations director for Shell Mexico. “After a solid certification process, negotiations and several site visits for further assessment, the final outcome is a successful enterprise framework agreement that will add value to the Shell Carmon Creek project.”
This contract is the first award under the multi-year frame agreement signed with Shell Global Solutions International U.S. for projects in North America in June 2014. It is also the first fabrication work ICA Fluor/Industria del Hierro will perform for a project in Canada.
Shell Mexico’s sourcing office promotes the use of Mexican suppliers on a global basis that have been already qualified according to Shell’s technical and health, safety, security and environmental standards. This opportunity clearly provides diversification of demand for Mexican suppliers. This award reinforces ICA Fluor’s fabrication capabilities and competitiveness to support projects located around the world.
Module fabrication enhances safety performance by transferring work at heights to ground level and improves quality and productivity by working in a controlled yard environment. The approach can shorten construction schedules by allowing simultaneous activities at both the job site and fabrication yard. It also reduces site congestion, minimizes impacts to existing facilities and reduces risks and costs associated to weather-related impacts.