Foster Wheeler AG recently announced that one of the subsidiaries of its Global Power Group received a contract from GS Engineering & Construction Corporation. Foster Wheeler will be responsible for the design and supply of one circulating fluidized-bed (CFB) steam generator for the Dangjin 4 Biomass Power Plant Project for GS EPS, a subsidiary of GS Group.
The financial terms of the contract were not disclosed. The contract will be booked in the company’s first quarter 2013.
Foster Wheeler has full authorization to commence work at the Biomass Power Plant project, located in Dangjin, in South Chungcheong Province, South Korea. The operations of the new steam generator are expected to begin by the third quarter of 2015.
The steam generator, designed and supplied by Foster, will burn palm kernel shells along with coal, wood pellets (back-up fuel) while ensuring that its meets all the environmental standards and regulatory compliance. In South East Asia, Biomass residue generated from palm oil is the primary source of renewable energy that is available in abundance.
In Feb 2013, Foster Wheeler received an Australian contract for the design and supply of three utility package steam generators located at the Ichthys Project. As per the terms of the contract, Foster will design and supply the package steam generators as well as auxiliary equipment.
The design will comply with the environmental regulatory requirements for burning both low pressure natural gas and liquid iso-pentane. Total capacity of the three steam generators is expected to be 278 tons per hour.
Foster Wheeler has more than 60 years of experience in designing steam generator product range. Foster’s Global E&C Group’s (Engineering and Construction) operating revenue (FW scope) was $424 million, down 6.4% from $453 million in the prior-year period.
However, the segment reported a 130% surge in new orders during the quarter. The increase was primarily attributable to booking of a large PMC (project management consultancy) contract for a clean fuels project in Kuwait. The segment ended the quarter with a strong backlog of $2.2 billion.
Foster Wheeler, which currently has a Zacks Rank #5 (Strong Sell), is not a good option at this moment. But some of the other players within the same industry that can be considered are AECOM Technology (ACM - Analyst Report), Jacobs Engineering Group (JEC - Analyst Report) and Anixter International (AXE - Snapshot Report), which currently have a Zacks Rank #2 (Buy).