FWLT (MM)

A subsidiary of Foster Wheeler AG's (FWLT) Global Engineering and Construction (E&C) Group and Qatar Kentz WLL (a joint venture partner of E&C) together entered into an engineering, procurement and construction management (EPCm) agreement with Qatargas Operating Company Limited (Qatargas).

Projects at the Qatargas LNG facility at Ras Laffan Industrial City along with onshore and offshore work are included in framework agreement. The initial period of the agreement is three years and has an option to be extended by additional two years. The booking values for the projects have been received and will be recorded as individual service orders.

Qatargas will be sending invitations to its framework contractors to bid for specific packages of work. These work packages will consist of pre-front end engineering design (pre-FEED), FEED and EPCm services.

Longer term, Foster Wheeler believes that global demand for electrical energy will continue to grow and that solid-fuel-fired steam generators will fill a significant portion of this incremental generating capacity. The fuel-flexibility of CFB steam generators enable them to burn a variety of fuels other than coal and produce carbon-neutral electricity when fired by biomass. In addition, the company’s steam generators can be designed to incorporate supercritical technology, which significantly improves efficiency while reducing emissions.

However, the company is subject to various environmental laws and regulations in the countries in which it operates. If it fails to comply with these laws and regulations, it may incur significant costs and penalties that could materially affect its business, financial condition, results of operations and cash flows. Its business may be adversely impacted by regional, national and/or global requirements to significantly limit or reduce greenhouse gas emissions in the future.

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. The major competitors of Foster Wheeler are Fluor Corporation (FLR) and Jacobs Engineering Group Inc. (JEC).

We maintain a Zacks #5 Rank (short-term Strong-Sell recommendation) on Foster Wheeler.

 
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