FWLT (MM)

Global Power Group, a subsidiary of Foster Wheeler AG (FWLT), received a limited notice to proceed (LNTP) from Hyundai Engineering and Construction. The notice is for the design and supply of four supercritical circulating fluidized-bed (CFB) steam generators for the Samcheok Green Power project. The project is owned by Korea Southern Power Co., Ltd. (KOSPO). The terms of agreement were not disclosed.

The company will record the value of the LNTP in its second-quarter 2011 bookings. The full notice of the contract is expected to be received in June. With the finalization of the contract, full value will be booked. In the beginning of June 2015, commercial operation of the new steam generators were planned.

The Samcheok Green Power project will receive four 550 MWe (gross megawatt electric) supercritical CFB steam generators, which are designed and provided by Foster Wheeler. The company will also provide site advisory and commissioning services for the project. The CFB steam generators are intended to burn coal mixed with biomass while meeting all environmental regulatory requirements.

The planned CFB steam generators will help Korea to move into a new period of green power generation. The new generators as compared with the conventional ones are more efficient, decreasing emission level while consuming lesser fuel.

Foster Wheeler AG is based in Zug Switzerland, but its operational headquarters are in Clinton NJ USA. The majority of Foster’s revenues and new businesses originate from outside the United States.

The company serves the following industries: Oil and Gas; Oil Refining; Chemical & Petrochemical; Pharmaceutical; Environmental; Power Generation; and Power Plant Operation and Maintenance. Major competitors of Foster Wheeler are Fluor Corporation (FLR) and Jacobs Engineering Group Inc. (JEC).

We continue to maintain a Neutral rating on Foster Wheeler, with a Zacks #4 Rank (Sell recommendation) over the next one-to-three months.

 
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