A contract win for
Foster Wheeler AG
) Global Engineering and Construction group from Farabi
Petrochemicals Company did not boost investor sentiment in the
following trading session. On Oct 24, the company announced
winning a contract for concept study and technology selection for
Farabi's Jazan Petrochemicals Project based in Saudi Arabia.
However, Foster's shares closed 0.7% lower on Oct 25.
The financial terms of the deal remain undisclosed, but
it will be recorded in the fourth quarter bookings.
The contract entails Foster Wheeler to develop the project's
outline to include the construction of a mega linear alkyl
benzene plant along with a number of specialty units that will
produce chemicals obtained from the diesel feedstock. Foster
Wheeler is also required to prescribe the suitable technology to
produce and treat low aromatics solvent and heavy fuel oil.
In addition, Foster Wheeler will also develop the cost
estimates for the project, overseeing the invitation of tenders
for the FEED (front-end engineering design). The study is
expected to be finished by the first quarter of 2014.
This strategic study will further establish Foster Wheeler as
the preferred provider of services in the Petrochemical sector.
Foster Wheeler is likely to benefit by this as petrochemical
companies are expected to grow exponentially following the 'Shale
Boom' in North America.
This contract is expected to further strengthen Foster
Wheeler's presence in the middle-east. Prior to this, recently
Foster received contracts from Abu Dhabi Polymers, Saudi Aramco
and Kuwait-based Petro Chemicals Industries Company. Middle East
has been one of the primary growth regions for Foster's
During fiscal 2012, the Middle East contributed 7.3% of the
total geographic revenue and 9.7% of the total revenue generated
by the Global Engineering and Construction division. Further,
about 26.8% of the total new orders booked by Foster in fiscal
2012 were from the Middle East region.
Foster Wheeler's Global E&C Group provides technical and
economic analyses and study reports to owners, investors,
developers, operators and governments. Foster currently has a
Zacks Rank #4 (Sell). Other stocks in the industry worth buying
at the moment are
Jacobs Engineering Group Inc.
Premier Oil plc
) All three carry a Zacks Rank #2 (Buy).
FOSTER WHELR AG (FWLT): Free Stock Analysis
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