(Alliance News) - Petrofac Ltd on Wednesday announced a mixed but robust performance this year, and announced a new contract with Hitachi Energy.

Shares in Petrofac surged up 38% to 30.96 pence each on Wednesday morning in London.

Petrofac, an energy infrastructure company with core markets in the Middle East and North Africa, said the project with Hitachi Ltd was its second under the six-project USD14 billion framework agreement with TenneT.

The agreement with Dutch-German transmission system operator TenneT aims to expand offshore wind capacity in the North Sea.

Petrofac said the new contract coincides with the confirmation that it has secured the performance guarantee requirement for the first contract, which TenneT awarded in March this year.

Petrofac's portion of the standalone contract is valued at around USD1.4 billion. It and Tokyo-based conglomerate Hitachi's Energy business will work to deliver the Nederwiek 1 under TenneT's two gigawatt programme.

John Pearson, Petrofac's chief operating officer of energy transition projects, commented: "The award of Nederwiek 1 continues our focus on the standardisation and harmonisation of design and execution that will be central to the 'design one, build many' philosophy of the 2GW programme.

"By aligning ourselves with TenneT's objectives, we are creating a blueprint for the rapid deployment of large-scale infrastructure projects crucial to Europe's energy transition."

Also on Wednesday, Petrofac said it expects its net debt for 2023 to be modestly higher than it was halfway through the year. Positive free cash flow generation, it added, has been offset by an increase in collateral required for guarantees.

Petrofac also expects approximately USD2.5 billion in full-year revenue, in line with guidance. For 2022, it had delivered USD2.59 billion in revenue.

"To further accelerate progress, my near-term priority, and that of our board and leadership, remains on improving liquidity and materially strengthening the group’s balance sheet, to deliver on our long-term potential," said Petrofac's Chief Executive Tareq Kawash.

Kawash added that "we enter 2024 with a high-quality backlog in both traditional and renewable energy of approximately USD8 billion.

"This provides us with good revenue visibility and demonstrates the continued confidence customers have in Petrofac's delivery."

By Emma Curzon, Alliance News reporter

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