Foster Wheeler Wins Contract – Analyst Blog

Foster Wheeler AG (FWLT) announced that a subsidiary of its Global Power Group has been awarded a contract by Sinopec Wuhan Company for the engineering, procurement and supply of three circulating fluidized-bed steam generators for the 800,000 ton/year ethylene project in central China’s Wuhan city.

 

Foster Wheeler will design and supply the three 80 MWe (gross megawatt electric) steam generators and auxiliary equipment and provide consulting services for the project. The CFB steam generators will be designed to burn coal and petroleum coke while meeting all environmental requirements.

 

We believe that the global demand for energy will continue to grow over the long term and that clients will continue to invest in new and upgraded capacities to meet that demand. In this regard, Foster Wheeler was successful in booking contracts for front-end engineering work, which is frequently the precursor to significant work for engineering, procurement and construction.

 

Foster Wheeler continues to be successful in booking contracts of varying types and sizes in key end markets, including a very large award for the engineering, procurement and construction of a new refinery in India. 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, we believe 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. The fuel-flexibility of CFB steam generators enables them to burn a variety of fuels besides coal and to 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.

 

Foster Wheeler AG is based in Zug, Switzerland, but its operational headquarters are in Clinton NJ USA. The company operates through two business groups − the Global Engineering and Construction Group, or Global E&C Group; and the Global Power Group. The Global E&C 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 Power Group designs, manufactures and erects steam generating and auxiliary equipment for electric power generating stations and industrial facilities worldwide.

 

We currently have a Neutral recommendation on FWLT.