Revamping of oil refineries to process sour and other crude oils continues to drive demand
Refinery upgrades, which improve efficiencies and capacity, also require Graham-engineered products
BATAVIA, NY, February 19, 2008 – Graham Corporation (AMEX: GHM) announced today that it has been awarded three ejector system orders with a total value of $9.0 million from oil refineries located in the United States. Two of the orders are for ejector systems for installation in Gulf Coast region oil refineries, while the third will be installed in a Southern California oil refinery. Ejector systems are essential to the oil refining process and play an important role supporting the separation of crude oil into various grades of transportation fuels and other petroleum-based products.
The first Gulf Coast refinery is revamping and upgrading its facility in order to both increase operational flexibility and be able to process lower cost, more plentiful sour crude oil feedstock. Final shipment for this order is planned for the fourth quarter of fiscal year 2009, ending March 31, 2009.
The second Gulf Coast refinery is also revamping its facility in order to process sour crude oil feedstock as well as expanding its existing capacity by 50%. Final shipment for this order is planned for the third quarter of fiscal year 2009, ending December 31, 2008.
The refinery located in Southern California is planning to upgrade and replace an existing ejector system originally supplied by Graham in 2000 in order to enable the refinery to process a wider variety of crude oil feedstock, including synthetic crude oil produced from the oil sands region of Alberta, Canada. Final shipment of the equipment is planned for the third fiscal quarter of 2009, ending December 31, 2008.
James R. Lines, Graham’s President and Chief Executive Officer, commented, “As a result of the continued depletion of the global supply of sweet crude oil, the cost differential between lower quality heavy high-sulfur crude oil and sweet crude oil, and demand for oil products exceeding refining capacity, we believe that North American refineries will continue to invest in equipment revamps and upgrades. These factors, as well as our reputation for delivering high-quality, specialty-engineered products and services, are driving demand for our ejector and condenser systems and filling our future bookings pipeline. In addition to the domestic and international refining sector, the petrochemical and alternate energy markets are also contributing to the strong demand for our products.”
Mr. Lines concluded, “We believe we are in a leadership position to provide critical equipment to a broad variety of industries which will enable us to generate fiscal year 2009 revenue growth in the 10% to 15% range, with a strong likelihood of being at the upper end of the range. We remain confident that we will attain gross margins in the 35% range or higher, as a result of the measures we have implemented to enhance productivity and boost capacity.”