After a Recent Deal With X-Energy, Is Fluor Becoming the Ultimate Nuclear Pick-and-Shovel Play? | The Motley Fool

It was an early investor in NuScale Power and recently agreed to a contract to help X-Energy develop its project in Texas.

The nuclear energy buildout is very real, and the White House has affirmed its stance with multiple executive orders and multibillion-dollar investments to grow its nuclear fleet and accelerate the deployment of next-generation nuclear technology.

As part of its ambitious goals, the United States will look to quadruple its new nuclear energy capacity to 400 gigawatts (GW), have 10 large reactors under construction by 2030, and provide grants and pilot programs for companies developing nuclear fuel, small modular reactors (SMRs), and microreactor technology.

One company emerging as a key partner in achieving this buildout is Fluor (FLR +1.28%), the global engineering, procurement, and construction (EPC) company with expertise in managing these massive projects. The firm is strengthening its nuclear portfolio through a new deal with X-Energy, a developer of advanced reactor technology.

Fluor is making major moves and flexing its muscle as a trusted EPC firm for nuclear energy companies. It was an early investor in NuScale Power in 2011 and is helping NuScale develop its RoPower project in Romania; it recently opened an office in Bucharest to support its projects.

This month, the EPC firm came to an agreement with X-Energy to work on its advanced nuclear project at Dow's UCC Seadrift Operations in Texas. As part of the contract, Fluor will provide Front-End Loading Stage 2 services, which include strategic planning, feasibility assessments, and cost control and risk mitigation.

X-Energy is a private company specializing in Generation IV high-temperature gas-cooled reactors and nuclear fuel that recently filed a prospectus to go public. It counts Dow and Amazon among its partners and has recently submitted a draft registration statement with the Securities and Exchange Commission to go public.

The project is part of the U.S. Department of Energy's Advanced Reactor Demonstration Program, which aims to accelerate the commercialization of advanced nuclear technology through cost-shared partnerships. As part of this project, X-Energy will deploy four 80-megawatt small modular reactor units.

Fluor is solidifying its position as a trusted partner for nuclear energy companies, including breakthrough companies that could change how nuclear energy is deployed, such as NuScale Power and X-Energy. In February, it was selected as the EPC contractor on Centrus Energy's uranium enrichment facility in Piketon, Ohio.

Investors seeking exposure to nuclear energy while diversifying away from miners or fuel producers may find Fluor a compelling choice. Fluor leverages a specialized workforce to develop these projects and is highly involved in the planning phases that determine if these major projects are possible.

As a result, the company generates revenue early in the nuclear buildout, years before any plants come online. This makes Fluor an excellent pick-and-shovel play for investors looking to capitalize on the nuclear energy buildout in the decades ahead.