Foster Wheeler Wins PMC Contract for the 2Co Power (Yorkshire) Don Valley Power Project in the United Kingdom

ZUG, Switzerland--()--Foster Wheeler AG (Nasdaq: FWLT) announced today that a subsidiary of its Global Engineering and Construction Group has been awarded a project management consultancy (PMC) contract by 2Co Power (Yorkshire) Limited (2Co) for the Don Valley Power Project in Stainforth, Yorkshire, UK.

“We are delighted to win the project management contract for the Don Valley Power Project”

The Foster Wheeler contract value for the project was not disclosed. An initial booking will be included in the company’s fourth-quarter 2011 bookings. The company expects that it will be released to begin the work representing the majority of the balance of the contract value up to final investment decision in time to include that work in its first-and second-quarter 2012 bookings.

The Don Valley Power Project is part of a carbon capture, utilisation and storage scheme (CCS) being developed by 2Co, comprising a 900 MW installed capacity (650 MW net export capacity) integrated coal gasification combined cycle (IGCC) power plant, CO2 transportation, and storage combined with enhanced oil recovery (EOR). The plant will be designed to capture, as CO2, some 90 percent of the carbon in the fossil fuel. The CO2 will then be compressed and transported via an underground pipeline being developed by National Grid. This pipeline will transport the CO2 to the North Sea where it will be injected into selected oil fields. These oil fields are intended to provide storage for the CO2, and the injection of CO2 through EOR will enable a larger proportion of the oil reserves to be recovered than would otherwise be possible through more conventional methods.

Foster Wheeler’s role as PMC for the project up to final investment decision by 2Co, which is expected in mid-2013, will include development of the engineering, procurement and construction (EPC) contract package, and engineering strategy, review of the existing front-end engineering design package, review of the licensors’ scope of work and process design packages, and provision of other development support to 2Co. 2Co has stated its intention that, after the final investment decision is taken, Foster Wheeler will manage the EPC contract on behalf of 2Co. This latter scope of work would be covered by a separate award.

2Co Energy Ltd’s objective is for Don Valley to be the first project to be built as part of the UK’s CCS development programme. 2Co’s final investment decision will be subject to confirmation of financial support from the UK government and the European Union. 2Co expects the new plant to begin operation by the end of 2016.

“We are delighted to win the project management contract for the Don Valley Power Project,” said Umberto della Sala, Chief Operating Officer of Foster Wheeler AG. “Our expertise in power generation and carbon capture and storage, together with our strong project execution track record, will provide significant added value to 2Co in realizing this ground-breaking project. We look forward to working with 2Co, which is an emerging player in the carbon capture and storage market and has stated its commitment to becoming the leader in delivering the benefits of such schemes globally.”

Jonathan Briggs, Managing Director, 2Co Power (Yorkshire) Ltd, said: “The Don Valley Power Project is the UK’s most advanced and economic carbon capture and storage project. Foster Wheeler’s appointment will ensure we deliver this ground-breaking project on time to help create jobs, supply low carbon electricity to the region and help the UK meet its ambitious energy security and national carbon reduction commitments. Foster Wheeler will now manage the project with us. The successful construction of CCS projects requires expertise in both the hydrocarbon processing and power industries, which plays to Foster Wheeler’s strengths.”

Foster Wheeler AG is a global engineering and construction contractor and power equipment supplier delivering technically advanced, reliable facilities and equipment. The company employs approximately 12,000 talented professionals with specialized expertise dedicated to serving its clients through one of its two primary business groups. The company’s Global Engineering and Construction Group designs and constructs leading-edge processing facilities for the upstream oil and gas, LNG and gas-to-liquids, refining, chemicals and petrochemicals, power, mining and metals, environmental, pharmaceuticals, biotechnology and healthcare industries. The company’s Global Power Group is a world leader in combustion and steam generation technology that designs, manufactures and erects steam generating and auxiliary equipment for power stations and industrial facilities and also provides a wide range of aftermarket services. The company is based in Zug, Switzerland, and its operational headquarters office is in Geneva, Switzerland. For more information about Foster Wheeler, please visit our Web site at www.fwc.com.

According to 2Co, 2Co Power (Yorkshire) Ltd is a wholly owned subsidiary of 2Co Energy (www.2Coenergy.com) – a UK-based company committed to delivering substantial CO2 emissions reductions through carbon capture and storage (CCS) projects. The company was founded on two highly experienced teams; one with two decades of CO2 transportation and Enhanced Oil Recovery (EOR) operations experience, and the other with a background in developing two of the world’s most advanced CCS projects, which 2Co believes provides an unparalleled wealth of experience. The Don Valley Power Project at Stainforth is one of the most advanced carbon capture and storage projects in Europe. It was the only UK project to win funding (€180 million) under the European Energy Programme for Recovery (EEPR) and is being assessed by the European Investment Bank (EIB) for further EU funding under the NER300 programme. The project is in a strong position to start construction in 2013 and be in operation by 2016.

Safe Harbor Statement

Foster Wheeler AG news releases may contain forward-looking statements that are based on management’s assumptions, expectations and projections about the Company and the various industries within which the Company operates. These include statements regarding the Company’s expectations about revenues (including as expressed by its backlog), its liquidity, the outcome of litigation and legal proceedings and recoveries from customers for claims and the costs of current and future asbestos claims and the amount and timing of related insurance recoveries. Such forward-looking statements by their nature involve a degree of risk and uncertainty. The Company cautions that a variety of factors, including but not limited to the factors described in the Company’s most recent Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission and the following, could cause the Company’s business conditions and results to differ materially from what is contained in forward-looking statements: benefits, effects or results of the Company’s redomestication or the relocation of our principal executive offices to Geneva, Switzerland; the benefits, effects or results of our strategic renewal initiative; further deterioration in global economic conditions, changes in investment by the oil and gas, oil refining, chemical/petrochemical and power generation industries, changes in the financial condition of its customers, changes in regulatory environments, changes in project design or schedules, contract cancellations, changes in estimates made by the Company of costs to complete projects, changes in trade, monetary and fiscal policies worldwide, compliance with laws and regulations relating to its global operations, currency fluctuations, war, terrorist attacks and/or natural disasters affecting facilities either owned by the Company or where equipment or services are or may be provided by the Company, interruptions to shipping lanes or other methods of transit, outcomes of pending and future litigation, including litigation regarding the Company’s liability for damages and insurance coverage for asbestos exposure, protection and validity of its patents and other intellectual property rights, increasing global competition, compliance with its debt covenants, recoverability of claims against its customers and others by the Company and claims by third parties against the Company, and changes in estimates used in its critical accounting policies. Other factors and assumptions not identified above were also involved in the formation of these forward-looking statements and the failure of such other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond the Company’s control. You should consider the areas of risk described above in connection with any forward-looking statements that may be made by the Company. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures the Company makes in proxy statements, quarterly reports on Form 10-Q, annual reports on Form 10-K and current reports on Form 8-K filed with the Securities and Exchange Commission.

Contacts

Foster Wheeler AG
Media:
United States:
Julie Stanisz, 908-730-4047
julie_stanisz@fwc.com
or
United Kingdom:
Anne Chong, +44 (0) 118 913 2106
anne_chong@fwuk.fwc.com
or
Investor Relations:
Scott Lamb, 908-730-4155
scott_lamb@fwc.com
or
Other Inquiries:
908-730-4000
fw@fwc.com

Foster Wheeler AG