Worley (ASX:WOR) share price backtracks regardless of contract win

The global engineering company has secured further work with Syrah.

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The Worley Ltd (ASX: WOR) share price is starting the day off in negative territory today. This comes after the engineering group announced that it has been awarded a services contract from Syrah Resources Ltd (ASX: SYR).

During mid-morning trade, Worley shares are down 1.26% to $11.71 while the Syrah share price has lifted 0.49% higher to $1.02.

Worley expands partnership

Investors are selling off Worley shares despite the company announcing a positive release to the ASX.

According to the update, Worley advised it has been awarded a detailed engineering and procurement services contract. The scope of work will be for the expansion of production capacity at Syrah’s active anode material (AAM) facility in Vidalia, the United States. It is expected that once the project is complete, the plant will produce around 10,000 tonnes per annum of AAM.

AAM is a natural graphite material that is used in lithium-ion batteries to power electric vehicles.

Syrah noted that Worley is experienced in delivering the project due to previous work between both parties. This includes the bankable feasibility study, front-end engineering and design, as well as interim detailed engineering services.

Worley will use its United States Gulf Coast team to execute the work, whilst receiving support from its Global Integrated Delivery Team in India.

Worley CEO, Chris Ashton said:

We are delighted to expand our relationship with Syrah and further support Syrah’s production of materials that play an important role in the energy transition. We are helping our customers adapt to the world’s changing energy needs and achieve their renewable energy goals, so this is a strategically significant project for Worley.

Syrah managing director and CEO, Shaun Verner went on to add:

We are delighted to execute this services contract and to continue our successful technical partnership with Worley through to the next important project phases at Vidalia. The finalisation of this contract, and the substantial engineering work completed to date with Worley, has de-risked the project and is a key step in advancing towards construction of the 10ktpa AAM facility at Vidalia.

Worley share price summary

Over the past 12 months, the Worley share price has gained close to 40% but is relatively flat for 2021. Worley shares took a hit in late January after providing a business update and have moved in circles ever since.

Worley presides a market capitalisation of more than $6 billion at today’s prices, with just over 522 million shares outstanding.

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