FWLT (MM)

Foster Wheeler SOFCON, an unincorporated consortium between a subsidiary of Foster Wheeler AG’s (FWLT) Engineering and Construction Group and A. Al-Saihati, A. Fattani & O. Al-Othman Consulting Engineering Co., (SOFCON) received a front-end engineering design (FEED) contract from Saudi Arabian Oil Company (Saudi Aramco). The contract was for the Clean Transportation Fuels Project at the Riyadh Refinery, Kingdom of Saudi Arabia.

Coupled with the front-end engineering design (FEED), Foster Wheeler SOFCON will also provide project management services for the Refinery. The contract value for Foster Wheeler was not disclosed but has been included by the company in first-quarter 2011 bookings. The main release of work is expected in the third quarter of 2011.

The contract value for this project was not disclosed. The initial release of work was included in the company’s first-quarter 2011 bookings. The company expects to receive the main release of work in the third quarter of 2011.

As per the deal, Foster Wheeler’s work on the project involves providing FEED services for new isomerization, naphtha splitting and sulfur guard-bed units as well as the addition of new equipment, including a diesel hydrotreater reactor, in the existing units. Further, the debottlenecking of the hydrocracker and gas concentration units, and replacement of crude and vacuum distillation tower internals are also included in FEED work. Two new tanks, a new pipe rack, instrument air compressor, condensate system, substation, process interface building and workshop are also included in the new facilities to be built. Upgradation ofmain control and monitoring systems are also included in the project. The FEED work will be executed from Foster Wheeler SOFCON offices in Al-Khobar.

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 #2 Rank (Buy recommendation) over the next one-to-three months.

 
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