The Global Engineering and Construction Group of Foster Wheeler AG (FWLT) has been awarded a contract for setting up an LNG receiving terminal in Uruguay by a state-owned oil company, Administración Nacional de Combustibles, Alcohol y Portland. The value of the contract was not disclosed.
The work envisages engineering design and selection of the owner and operator of the terminal. The owner/operator will be responsible for engineering, procurement and commissioning (EPC) of the terminal. The company will also be responsible for monitoring EPC work. The project will help supply natural gas in Uruguay and also meet partial demand in Argentina.
With a view to meet the demand for gas, Uruguay and Argentina signed an Energy Cooperation Agreement in July 2007 for the construction of a regassification plant in Uruguay.
The company’s Global Engineering and 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 Engineering and Construction Group provides engineering, project management and construction management services.
We believe that the global demand for energy will continue to grow over the long term and customers 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 frequently precedes 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. 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 identifying new prospects where it believes it has significant differentiators.
In the long-term, the company believes that world demand for electrical energy will continue to grow and solid-fuel-fired steam generators will continue to fill a significant portion of this incremental generating capacity. CFB steam generators have the flexibility 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 can significantly improve efficiency and reduce emissions.
The company’s operations are concentrated in four particular industries (oil & gas, oil refining, chemical/petrochemical and power). Adverse economic or other developments would impact Foster Wheeler’s performance.
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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