JEC Jacobs Engineering Group Inc

Foster Wheeler AG’s (FWLT) Global Engineering and Construction Group received a contract to do basic engineering design (BED) and front-end engineering design (FEED) for Preemraff Lysekil oil refinery in Gothenburg on the west coast of Sweden.

The contract has been awarded by Preem AB (Publ) Preemraff Lysekil (Preem) and is a part of Preem’s Energy Savings Program 2013 Turnaround.  The contract value is undisclosed. 

The value for the BED was added to the company’s first-quarter 2011 bookings and that of FEED will be recognized by the company after the design is released by the client. The release is anticipated to be during the second quarter of 2011.

In 2010, Foster Wheeler’s Business Solutions Group together with AspenTech received a contract from Preem energy improvement study (EIS) for improving energy efficiency and decreasing emissions in the Preem refinery. The study included options for improving both design as well as operation. Preem selected five design options from this study for further development and economic analysis.

These five options will be further expanded by Foster Wheeler’s UK Operations during the basic engineering design phase. The development of options involves deciding the probability and degree of altercations needed and determining the costs associated with it.

Of all the options, one or two will be chosen by Preem and will be given to Foster Wheeler to perform FEED. Preem will make financial investment decision in October 2011. The basic engineering design is planned to be completed in June 2011 and the FEED in September 2011.

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. 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.

 
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
 
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
 
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
 
Zacks Investment Research