BWA BorgWarner Inc

Technology of UOP LLC, a subsidiary of Honeywell International Inc. (HON), has been chosen by the State Company for Oil Projects (SCOP) in Iraq for a new transportation fuel refinery to be built within the country. SCOP works under the Ministry of Oil for Iraq.

The refinery, to be built at Nassiriya, Iraq, is planned to have a processing capacity of 300,000 barrels per day (bpd) of domestic crude oil into gasoline and diesel fuel. This will be achieved with the help of reforming, isomerization, fluid catalytic cracking (FCC) and selective hydrotreating technologies from UOP. Designing of the refinery is expected to start in the second quarter of 2011.

Earlier in 2010, the company received contract from South Refineries Company and North Refineries Company for new refineries in Maissan and Kirkuk, Iraq. These refineries has a planned capacity of 150,000 bpd. Moreover, UOP technologies increases yields of the refineries through an optimized and economic way.

The demand for transportation fuel is rising steadily requiring an increase in production capacity at the refineries. Iraq aims to double its existing oil refining capacity, which is expected to reach 1.6 million bpd by 2017. By 2030, refining capacity is expected to be double of that in 2017.

Based in Morris Township, N.J., Honeywell International Inc. is a Fortune 100 company providing technical and manufacturing support to customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Major competitors of Honeywell are BorgWarner Inc. (BWA), United Technologies Corp. (UTX) and Johnson Controls Inc. (JCI).

We currently maintain our Neutral rating on Honeywell, with a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.

 
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