Fluor Corp. (NYSE: FLR) and Offshore Oil Engineering Co. Ltd. (COOEC), a subsidiary of China National Offshore Oil Corp., have agreed to form a new joint venture to own, operate and manage the Zhuhai Fabrication Yard in China’s Guangdong province.
The new JV will be called COOEC Fluor Heavy Industries Co. (CFHI).
Located near Hong Kong in the Zhuhai Gaolan Port Economic Development Zone, the Zhuhai Fabrication Yard can accommodate fabrication modules weighing more than 50,000 tons. The yard is 2 million square meters.
COOEC Fluor Heavy Industries provides Fluor with the capability to produce large modules for onshore projects and gives the company access to the long-term strategic capacity to deliver offshore fabrication services for clients globally. The new venture increases Fluor’s fabrication presence to four locations around the world.
As part of the joint venture, Fluor will make two stages of investments: an initial cash investment of $350 million after all regulatory approvals are received, which is targeted for late 2015, and a $139 million investment in third-quarter 2016. Fluor will hold 49% ownership in the joint venture, with COOEC holding 51%.
Fluor’s investment in the joint venture does not impact the company’s $1 billion share repurchase program, which the company expects to complete as planned by the end of 2015.
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