Belgian Order for Foster Wheeler - Analyst Blog

Foster Wheeler AG (FWLT) announced that a subsidiary of its Global Engineering and Construction Group has been awarded a contract for detailed engineering consultancy services for a lubricating oil plant at Kuwait Petroleum's facility in Antwerp, Belgium.

Production capacity at the Antwerp facility will be increased from 125 million to 250 million liters per year. The engineering portion of the work will be completed by mid 2011.

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.

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 capacities to meet that demand. In that regard, FWLT has been successful in booking contracts for front-end engineering work, which frequently precedes 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 identifying new prospects where it believes it has significant differentiators. Flour Corporation (FLR) is its major competitor.

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). 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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