The coronavirus pandemic, along with a sharp decline in commodity prices and heightened volatility in global equity markets, have prompted leading engineering contractor TechnipFMC to postpone the separation of its business. The split was originally on track for completion in the second quarter of 2020.

The US-headquartered group said market conditions have changed materially and created an environment that is not currently conducive to its split into TechnipFMC and Technip Energies. It reiterated, however, that the strategic rationale for the separation remains unchanged and the company is continuing preparations so that the group is ready for the move when markets sufficiently recover.

TechnipFMC said the transaction will create one of the largest engineering & construction pure-plays, with Technip Energies well positioned to capture opportunities in liquefied natural gas. With about 15,000 employees, this spinoff will be headquartered in Paris, France, the original base for Technip prior to its merger with US firm FMC Technologies in January 2017.

The remaining company, TechnipFMC, will be a fully integrated technology and services provider with approximately 22,000 employees. It said that as a standalone company, it will be the largest diversified pure-play in the industry. TechnipFMC will remain incorporated in the UK with headquarters in Houston, Texas, USA.

In separate news, the contractor has formed a partnership with Finland’s Neste. Under the collaboration, TechnipFMC will become Neste’s provider of front end loading services for future Nexbtl projects. Neste’s proprietary Nexbtl technology converts second-generation feedstock such as vegetable oil or waste fat into renewable diesel and other products.