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

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Foster Wheeler AG 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.

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."

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.

Published 01/02/2012

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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.

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