Oil sands-related refinery order may be an early indication that downstream capital investments in North America have resumed
Order for refinery expansion in China is ninth win in four years
Orders in fiscal 2011 third quarter were $17.8 million
Graham Corporation (NYSE Amex: GHM), a designer and manufacturer of critical equipment for the oil refining, petrochemical and power industries, today announced that it has received two orders for ejector systems that total approximately $4 million.
The first order is for an ejector system to be installed at a U.S. refinery that is being modified to process crude oil from the Alberta oil sands. The ejector system is scheduled for delivery in the third quarter of Graham’s 2012 fiscal year, which begins on April 1, 2011. The second order is for an ejector system destined for a refinery expansion in China. Delivery for that system is planned for the second quarter of fiscal 2012. The ejector system for China is expected to have certain of its components built in China.
James R. Lines, Graham’s President and Chief Executive Officer, commented, “It is encouraging to see a major U.S. refiner preparing its facility to process synthetic crude oil from the Alberta oil sands. Although measurable industry-wide investment had been made prior to the recession to prepare some existing facilities for the processing of Alberta synthetic crude, there has been minimal investment during the last few years. The Alberta oil sands represent the second largest proven concentration of oil in the world after Saudi Arabia. And, with 170 billion barrels of proven recoverable reserves, it is still at a very early stage of development with only about 7 billion barrels of oil recovered to date.”
“Even though refinery-related activity has been slow in China for much of the past year, we believe that our strategy of early involvement in major projects led to our participation in the equipment selection process with this refinery. With this project award, we have won nine major refinery projects in China over the past four years. We are confident that we can build on this success as considerable distillation capacity is expected to be added in China over the next five years,” Mr. Lines noted.
Graham also announced that it had received orders of $17.8 million in its fiscal 2011 third quarter, which ended December 31, 2010. Mr. Lines concluded, “Included in our orders for the third quarter were about $800,000 in new orders received by Energy Steel & Supply Co. since our acquisition of the Lapeer, Michigan-based company on December 14, 2010. We view this to be a positive reflection of Energy Steel’s solid market penetration and believe that it supports our strategy of broadening our reach into the nuclear power market.”