Worley (ASX:WOR) share price edges lower despite contract wins

The global engineering company’s shares are heading south today…

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Worley Ltd (ASX: WOR) shares can’t catch a break today despite announcing two new contract awards.

At the time of writing, the Worley share price is down 2.77% to $11.57.

Worley secures renewable fuels contract

According to its first release, Worley advised it has been awarded a services contract with engineering company, Koch Project Solutions.

The deal will see Worley provide front-end engineering and design (FEED) services for a new renewable fuels plant in California. Once completed, the plant will be owned and operated by NASDAQ-listed company, Aemetis Inc (NASDAQ: AMTX).

The renewable jet and diesel project will combine low-carbon feedstocks with renewable hydrogen from orchard and forest wood waste to produce low-carbon fuels. It is estimated that at capacity, the plant will make 170 million litres per year of renewable jet and diesel fuel. This fuel can be used in aeroplanes, trucks and ships without requiring any engine modifications.

The project will be managed by Worley’s United States West offices. Furthermore, ongoing support will come from the company’s Global Integrated Delivery team in India.

It is expected that the FEED phase will be completed towards the backend of the calendar year.

Commenting on the contract win, Worley CEO Chris Ashton said:

We are pleased that Koch Project Solutions and Aemetis have selected Worley to deliver this significant project. The Carbon Zero 1 project aligns with our focus to support our customers on their energy transition, while remaining committed to our purpose of delivering a more sustainable world.

Worley wins second contract for the day

Adding to the positive release, Worley further announced it has won a services contract with Canadian company, Parkland Refining BC.

Under the contract, Worley will provide consulting, engineering, procurement, construction management and commissioning services to support works at Burnaby refinery. Worley noted that this is on top of the existing relationship of undertaking capital work at the facility.

The Burnaby refinery converts crude and synthetic oil into gasoline, diesel, jet fuels, asphalts, heating fuels, heavy fuel oils, butanes, and propane.

The term of the contract will last for a period of 5 years.

The services will be led by Worley’s Calgary office with support from its global consulting business, Advisian, delivering technical expertise. Worley’s gas treating and sulphur technology business, Comprimo will provide the technology and design.

Mr Ashton went on to further comment:

We are pleased to continue supporting Parkland at its Burnaby refinery. We will combine our long-term presence at the refinery over the last two decades with our technical expertise to deliver efficient and reliable operations, while remaining committed to delivering a more sustainable world.

Worley share price summary

Regardless of today’s fall, Worley shares are still up more than 25% from this time last year.

The company is ranked 84th in terms of the largest market capitalisation on the ASX, with $6 billion.

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