LNG, CCS lead Baker Hughes in Q1 2022

Led by its turbomachinery and process systems (TPS) division and with new investments in carbon capture and storage (CCS), global oilfield services provider Baker Hughes said April 20 it had Q1 2022 operating income of $279mn, up from $164mn in the same period a year ago.

Adjusted EBITDA rose to $625mn from $562mn, while net income rebounded to $72mn from a $452mn loss in Q1 2021.

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“Our first quarter results reflect operating in a very volatile market environment during the first few months of 2022,” CEO Lorenzo Simonelli said. “On the positive side, we recorded strong orders from TPS as the LNG order cycle continues to unfold.”

But challenges were seen in other parts of the business, which were pressured by global supply chain constraints and recent geopolitical events.

“As we look ahead to the rest of 2022, we see a favourable oil and gas price backdrop but also a dynamic operating environment,” Simonelli said. “The recent and unfortunate geopolitical events are exacerbating several trends, including broad-based inflation and supply pressures for key materials, commodities and labor.”

In the first quarter, the TPS division secured a major contract to supply 24 modularised compression trains to Venture Global’s Plaquemines LNG project in Louisiana and received an order for advanced gas turbine generator equipment for Air Products’ planned net-zero hydrogen energy complex in Canada. Under the order, Baker Hughes will supply its NovaLT16 turbines, which will run on 100% hydrogen.

Also in Q1, Baker Hughes acquired Mosaic Materials, a growth stage technology company focused on developing a proprietary direct air capture (DAC) technology using metal-organic framework materials that can separate CO₂ from gas mixtures across a variety of applications. Baker Hughes will draw on its existing modular design and material science capabilities to scale the technology, enhancing its own CCS portfolio and enabling DAC at higher efficiencies and lower costs.

Finally, Baker Hughes announced a strategic partnership with and an investment in NET Power, which is developing a low-cost electrical power system which generates no atmospheric emissions and inherently captures all CO₂.

“We are optimistic on the outlook across both of our core business areas and excited about the new energy investments we are making for Baker Hughes,” Simonelli said. “We believe that we are well positioned to benefit from an extended cyclical recovery in upstream oil and gas and longer-term structural growth trends in LNG, new energy and industrial asset management.”