JEC Jacobs Engineering Group Inc

Foster Wheeler AG’s (FWLT) Global Power Group received a design and supply contract for 4 x 250 MWe (net megawatt electric) circulating fluidized-bed (CFB) steam generators, which will be employed in the Mong Duong 1 Thermal Power Plant for Vietnam Electricity (EVN). The contract has been received from the owner and developer of the project, Hyundai Engineering and Construction. Asian Development Bank (ADB) and Korean Exim Bank is the financier of the project.

A full notice to proceed on this contract has been received by Foster Wheeler. The contract value will be included in the company’s fourth-quarter 2011 bookings. However, the terms of the deal were not disclosed. The new steam generators are expected to start operating commercially in the second quarter of 2015.

Apart from the design and supply of the 4 x 250 MWe clean burning CFB steam generators, Foster Wheeler will also provide site advisory services for the project. Vietnamese anthracite coal will be burned by these CFB steam generators while fulfilling the required environmental regulatory requirements.

Longer term, Foster Wheeler believes that the global demand for electrical energy will continue to grow and solid-fuel-fired steam generators will fill a significant portion of this incremental generating capacity. The fuel-flexibility of CFB steam generators will 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).

Currently, we are maintaining a Zacks #5 Rank (short-term Strong-Sell recommendation) on Foster Wheeler.

 
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