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Foster Wheeler AG (FWLT - Analyst Report) recently announced that a subsidiary of its Global Engineering and Construction Group received a contract from OJSC Gazpromneft Moscow Refinery, for its Combined Oil Refinery Unit (CORU) Project. The scope of the contract involves providing front-end engineering design (FEED) and design documentation in agreement with Russian norms. The financial terms of the contract were not mentioned, but Fosters will include the contract in its first quarter bookings.  

The Combined Oil Refinery Unit is a major investment for the Moscow refinery, therefore timely completion of a strong front-end engineering design is important, as the project is part of the implementation of Gazpromneft’s OJSC Moscow Refinery Revamping and Upgrading Program. As per the program refinery will be extended up to 2020 in order to process an additional six million tons of crude oil per year and produce transportation fuels according to the Euro-V standards.

The front-end engineering design activities are projected to complete in the fourth quarter of 2013. However, the submission of design documentation is scheduled for completion by the first quarter of 2014.

The Combined Oil Refinery Unit amenities are designed to comprise crude distillation and vacuum distillation units, a continuous catalytic reforming unit with naphtha hydro treatment and hydrogen recovery by pressure swing adsorption, a diesel hydrotreater including a dewaxing section, a gas plant with a liquefied petroleum gases sweetening unit and common utilities.

Prior to this, Foster Wheeler had received contract for the process design package for Moscow refinery’s crude and vacuum distillation units and the gas plant.

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 $588 million, down 12.4% from $671 million in the prior-year period. In the last reported quarter (1Q13) the segment reported a 30% decline in new orders bookings during the quarter. The orders mainly consist of many small and medium-sized contracts.

Foster Wheeler currently has a Zacks Rank #3 (Hold). Other companies which are worth considering at the moment having Zacks Rank #2 (Buy) are Harris & Harris Group, Inc. , Quanta Services Inc. (PWR - Analyst Report) and Honeywell International Inc. (HON - Analyst Report).

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