The Worley Ltd (ASX: WOR) share price will be on watch this morning following the company's announcement regarding a front-end engineering design (FEED) contract. At the market close yesterday, the Worley share price finished the day 1.2% higher to $10.54.
It will be interesting to watch how the company's shares perform today as investors digest this morning's update.
Image source: Getty Images
What did Worley announce?
The Worley share price could be on the move today as the company reported its latest contract win.
According to this morning's release, Worley advised it has been awarded a FEED contract from 1PointFive Inc. This contract is for a direct air capture (DAC) project.
1PointFive Inc. is a partnership created by Oxy Low Carbon Ventures (a subsidiary of Occidental Petroleum Corporation) and Rusheen Capital. The group is focused on implementing low-carbon technologies that offer sustainable business solutions. This is made by utilising Occidental's leadership in carbon management and carbon dioxide storage with Rusheen's knowledge of carbon-to-value projects.
Under the deal, Worley will commence work on 1PointFive's first DAC unit for its DAC facility. This will be constructed in the United States Permian Basin, which is located across western Texas and southeastern New Mexico. Worley stated that it will use its Houston office to lead the project. Additionally, the project will utilise the support of its Global Integrated Delivery team in India.
The company noted that this will be the first commercial-scale development using Carbon Engineering Ltd's DAC technology. When fully operational, the DAC unit will remove around 1 million tonnes of carbon dioxide (CO2) from the air each year.
Once the FEED contract has been fulfilled, it is expected that Worley and 1PointFive will form an alliance. Consequently, this will flow onto additional projects in which Worley will provide engineering, procurement and construction work for further DAC's. Currently, there are three additional DAC projects in the pipeline.
CEO commentary
Worley CEO Chris Ashton welcomed the new deal, saying:
We are delighted to have been awarded the FEED contract and we are looking forward to forming the alliance with 1PointFive. This direct air capture project is a starting point for the deployment of commercial-scale DAC to help companies meet CO2 emission reduction targets and aligns with Worley's strategic focus of delivering a more sustainable world.
About the Worley share price
The Worley share price has fallen more than 24% over the past 12 months. The company's shares hit a low of $4.63 cents in March last year, before moving on an upwards trajectory later that month.
Based on the current share price, Worley commands a market capitalisation of around $5.5 billion.
