Foster Wheeler wins PMC contract for coal-fueled Don Valley Power Project

Source: Foster Wheeler AG 

Foster Wheeler AG (Nasdaq: FWLT) announced 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 coal-fueled Don Valley Power Project in Stainforth, Yorkshire, UK. 

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, utilization 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.”

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