JEC Jacobs Engineering Group Inc

Foster Wheeler AG’s (FWLT) subsidiary, Global Engineering and Construction Group, has been awarded a front-end engineering design (FEED) contract for the Qasr Compression Project in Egypt by the Apache Khalda Corporation.

In addition to providing project management consultancy (PMC) services for managing FEED for the project the company will also provide additional compression to the existing facilities at the Qasr gas condensate field. The field is located at about 525km west of Cairo, in the Western Desert region.

The contract value for this project for Foster Wheeler is undisclosed. The contract has been included in the third-quarter 2011 bookings of the company. By the end of 2011 the FEED work at the project is expected to be completed.

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 and reduces 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 continue to maintain a Neutral recommendation on Foster Wheeler, which corresponds to a Zacks #3 Rank (Hold Rating) over the next one-to-three months.

 
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