A subsidiary of Foster Wheeler AG’s (FWLT) Global Engineering and Construction Group won an engineering and material supply contract from JSC Novo-Ufimsky Refinery, a subsidiary of Russian oil company Bashneft. The delivery will be made to the Ufarefinery in the Republicof Bashkortostan, Russiafor its new Terrace WallTM steam reformer heater and air preheating system.
The fourth-quarter 2010 bookings included this contract. The value of the contract was not revealed.
JSC Novo-Ufimsky Refinery is constructing a hydrogen production unit with per day capacity of 420 tonnes, the Terrace WallTM steam reformer will be a part of it. This will be one of the largest steam Terrace WallTM reformers for hydrogen ever to be constructed by Foster. The company has supplied more than 200 Terrace Wall™ steam reformers to the refining and petrochemical industries in above 40 countries worldwide.
Foster Wheeler is expected to complete its work on the refinery in mid-2012 after which the remaining engineering and construction work at the hydrogen plant will be carried out by JSC Novo-Ufimsky Refinery.
Terrace Wall™ reformer of Foster Wheeler provides extended operating flexibility to reformers and is quite economical as it aids in the production of hydrogen over the present capacity.
Foster Wheeler 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.
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.
Foster Wheeler AG is based in Zug Switzerland, but its operational headquarters are in ClintonNJUSA. 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. 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 (short-term Sell recommendation) over the next one-to-three months.
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