Foster Wheeler AG’s (FWLT) Global Engineering and Construction Group has won a contract to perform an availability and reliability study for the expansion of the Zirku oil processing facilities in Abu Dhabi, UAE.
The value of the contract has been included in the company’s fourth quarter 2010 results and has not been disclosed.
Foster Wheeler will undertake site surveys, suggest a range of potential expansion options and de-bottlenecking initiatives while performing availability and reliability studies to derive a master plan for the facilities.
The company’s Global Engineering & Construction Group operates worldwide and designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure, including power generation and distribution facilities and gasification facilities.
The Global E&C Group provides engineering, project management and construction management services, and purchases equipment, materials and services from third-party suppliers and contractors.
We believe that the world demand for energy will continue to grow over the long term and customers will continue to invest in new and upgraded capacity to meet that demand. In that regard, FWLT was successful in booking contracts for front-end engineering work, which is frequently the precursor to significant work for engineering, procurement and construction.
FWLT continues to be successful in booking contracts of varying types and sizes in key end-markets. The company’s success in this regard is a reflection of its technical expertise, its long-term relationships with clients, and its selective approach in pursuit of new prospects where it believes it has significant differentiators.
Longer-term, the company believes that world demand for electrical energy will continue to grow and that solid-fuel-fired steam generators will continue to fill a significant portion of this incremental generating capacity. Fluor Corporation (FLR) and Jacobs Engineering Group Inc (JEC) are major competitors of Foster Wheeler.
The company’s operations are concentrated in four particular industries (oil & gas, oil refining, chemical/petrochemical and power) and it may be adversely impacted by economic or other developments in these industries.
Worldwide operations involve risks that may limit or disrupt operations, limit repatriation of cash, increase taxation or otherwise adversely affect its business, financial condition, results of operations and cash flows.
We currently have a Neutral recommendation on Foster Wheeler.
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