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8
FLUOR CORPORATION 2004 ANNUAL REPORT
During 2004, major upstream awards included substantial addi-
tional engineering and procurement scope on the Sakhalin 1 project
in Eastern Russia, as well as a significant portion of detailed design
services for a second major project in Kazakhstan. Development of
new oil and gas fields such as these in the Caspian Sea region and
former Soviet Union, represent long-term programs which will
proceed in multiple stages over as long as 20 years.
Increasing demand for natural gas, particularly in the United
States, coupled with plentiful gas resources that are located at
distances far too great to be transported by pipelines, continues to
drive increasing focus on alternatives such as LNG and GTL projects.
Fluor has performed front-end engineering for several regasification
plants at proposed LNG receiving terminals, and has numerous
additional similar prospects. In addition, the company is involved
in construction of the first LNG regasification terminal in Mexico
and more recently was awarded an expansion project for another
regasification plant in Spain. Fluor also anticipates increased activity
on GTL projects in 2005, as clients move forward with their
development plans.
A number of significant downstream project awards were
received during the year. These included a $570 million contract to
provide detailed engineering and procurement services for three
main upgrader process units for a major oil sands project in Canada.
Opportunities on additional oil sands projects are anticipated as
the technical and economic viability and strategic location of this
resource drives continued development. Through its ICA Fluor joint
venture in Mexico, the company was successful in winning a major
refinery modernization project for Pemex, the Mexican national oil
company. Fluor was also selected to provide front-end engineering
and design services for a multi-billion dollar refinery in Kuwait,
which is the first major new refinery to be constructed in the world
in many years. This program represents significant further opportu-
nity for Fluor as the project progresses.
Refinery work related to reducing the sulfur content in on-road
diesel also proceeded in 2004, with Fluor receiving numerous project
awards based on its strength in defining and implementing clean
fuels technologies. These included several front-end studies as
well as full project awards for various clients, including Shell,
ConocoPhillips, Sunoco, Valero, Citgo and Lyondell-Citgo JV. While
the majority of this work is focused on refineries in North America,
certain other countries have implemented similar more stringent
environmental requirements. In particular, Fluor has received a
series of awards from Sasol in South Africa, related to their major
clean fuels initiative, including a number of facility upgrades as
well as new plants.
TengizChevroil (TCO), a Kazakhstan
partnership between ChevronTexaco,
ExxonMobil, KazMunaiGaz, and
LukArco, is investing approximately
$4.5 billion to further develop the
world’s deepest super giant Tengiz oil
field and Korolev oil field in western
Kazakhstan. The Parsons Fluor Daniel
(PFD) joint venture is providing EPCM
services for the facilities portion of the
Sour Gas Injection/Second Generation
Project (SGI/SGP) expansion at Tengiz.
The PFD team began initial design
and engineering work for the project
with TCO in 2000 and completion is
scheduled for mid-2006.
At ExxonMobil’s refinery in Baytown,
Texas, Fluor provides EPCM services
for a variety of clean fuels projects to
support the client’s emission reduction
goals. Pictured above, a new refractory
lined expansion joint being installed
upstream of a new Ultra Low NOx
burner as part of the NOx Reduction
project at the refinery.