TechnipFMC wins $7.6b contract for Arctic LNG-2 project

PARIS, July 24 (Reuters): Oil services company TechnipFMC won a $7.6 billion contract with Russia's Novatek and its partners for the Arctic 2 liquefied natural gas project in western Siberia, pushing TechnipFMC's shares higher.

TechnipFMC's Paris-listed shares rose 3.2% in early session trading, as analysts welcomed the new contract.

TechnipFMC said the consolidated value of the contract to it for Arctic LNG-2 was $7.6 billion and consisted of three LNG trains, each with a capacity of 6.6 million tons per annum (Mtpa).

"TechnipFMC's announcement of the award of the $7.6 billion award for the 3-train Arctic LNG 2 project will, in our view, now see Technip's Onshore/Offshore division report record backlog levels of more than $16bn at 2Q19 results within overall group backlog level possibly over $25 billion, the highest level for the group backlog since 2Q15," wrote brokerage Jefferies.

Jefferies kept a "buy" rating on TechnipFMC.

The Arctic LNG 2 project aims to develop more than 7.0 billion barrels of oil equivalent (boe) of resources.

Novatek holds a 60 per cent stake in the project, while French oil and gas major Total, China's CNPC, CNOOC, and Japan Arctic LNG consortium each hold 10 per cent.