TechnipFMC on road to split-up shows LNG strength with orders

Tuesday, 29 October 2019
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Five LNG projects have moved forward and Houston company has won two of them

LNG Journal editor

TechnipFMC, Franco-US energy and LNG engineering company, said its split into two separate listed companies was on track for the first half of 2020 as it posted a 6 percent increase in third-quarter revenues to $3.33 billion as new large-scale LNG contracts were awarded.

The results included after-tax charges and credits with adjusted third-quarter net income at $54.4 million, down more than 61 percent from the $139.8M reported in the same 2018 quarter.

Decision

TechnipFMC said in August 2019 that it had decided to spin off its European-based engineering and construction operations into a separate business, leaving the Houston-based half of the firm as a technology-focused equipment supplier to the oil and gas sector.

The strategy is to reverse the 2017 merger of Technip of France and FMC Technologies of the US, a transaction valued at the time at $20Bln as it created TechnipFMC as a fully-integrated subsea provider.

“In the third quarter, we announced a transformational move to create two diversified, pure-play market leaders,” said Doug Pferdehirt, Chairman and Chief Executive of TechnipFMC.

“The separation will enable both companies to benefit from dedicated focus of management, resources and capital while highlighting the unique value proposition and differentiated investment appeal of each company,” he added. “We believe strongly that providing independence for these two world-class, high-performing businesses will unlock further opportunities and create value for all stakeholders,” stated the CEO.

TechnipFMC is one of the leading engineering, procurement and construction companies whose current contracts include projects in the US, as well as the Russian Arctic LNG II project proposed for the Gydan Peninsula and the Mozambique LNG joint venture in southeast Africa.

“Five LNG projects over the past five months have either been sanctioned or moved closer to final investment decision in 2020, including the Arctic LNG 2 and Rovuma LNG projects that were awarded to TechnipFMC and our partners,” said Pferdehirt in the third-quarter earnings statement.

“Rovuma builds upon our first mover advantage and early investment in Mozambique, where we are already executing the floating LNG scope on the Coral project,” added the CEO.

“The award also serves as further confirmation of our leadership in LNG and our strong capabilities in the delivery of remote projects,” he stated.

Pferdehirt concluded by saying that he wanted to “recognize the dedication, commitment and demonstrated results of the women and men of TechnipFMC that have enabled us to take this next step” to further reshape the industry.

“Thanks to their continued effort, we are making solid progress towards completing our planned separation in the first half of 2020,” he said.

With approximately 15,000 employees, the LNG and energy spin-off would still be one of the largest engineering players in the sector.

It would be incorporated in the Netherlands with its headquarters in Paris and would remain listed on the Euronext Paris stock exchange.

TechnipFMC previously said that Catherine MacGregor, who joined the company in July 2019 after more than two decades at energy services firm Schlumberger NV, would be the CEO of the engineering and construction services spin-off.

The standalone company would be headed by TechnipFMC CEO Pferdehirt. It would have its headquarters in Houston, Texas, and be listed on both the New York Stock Exchange and Euronext Paris exchange.

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