Fluor's Mexico Venture to Build Plant

From Bloomberg News

Fluor Corp.'s venture with Mexico's largest construction company won a $159-million contract to build a natural gas-fueled power plant in Mexico that will sell power to energy-strapped California, the company said Monday.

The plant, ordered by San Diego-based Sempra Energy, will produce 600 megawatts, enough power for 450,000 average California homes. It will be located near the U.S. border in Mexicali, about 115 miles east of San Diego, Fluor spokeswoman Lori Serrato said.

Construction is expected to take 26 months. The work includes a 230,000-volt transmission line to the U.S. border, Serrato said.

Aliso Viejo-based Fluor, the largest engineering and construction services company, jointly owns the venture, ICA Fluor Daniel, with Mexico City-based Empresas ICA.

For ICA, the plant contract, the second won in less than a month, helps it overcome a shortage of large infrastructure projects because of declining government spending. The contracts are also helping it beef up construction projects it plans to carry out in coming months.

"This contract alone on its own represents 31% of the company's first-quarter backlog," said Francisco Suarez, a construction analyst at Casa de Bolsa Banorte.

ICA's shares traded in Mexico jumped as much as 6% on a day when the Mexican stock market rose 0.2%. The stock rose 4% on May 29, after its announcement of a contract to build a power plant in the Gulf of Mexico port of Altamira. That contract was worth $195 million.

The Mexicali plant will be designed to meet U.S. and Mexican air quality standards and cool itself with treated waste water from Mexicali to conserve scarce fresh water, Fluor said.

Sempra owns San Diego's electric and gas utility.

In New York Stock Exchange trading, Fluor shares fell $1.34 to close at $43.70; Sempra rose 19 cents to close at $26.94.

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