Jun 24 2010
LianDi Clean Technology Inc. (OTC Bulletin Board: LNDT), ("LianDi" or the "Company"), a leading provider of clean technology, downstream flow equipment, engineering services and software to China's leading petroleum and petrochemical companies, today announced that it intends to purchase a 16.5-acre land parcel in the Tianjin Port Industry Area for approximately $5.9 million.
The Company intends to use the land to construct a new manufacturing facility for its state-of-the-art, totally enclosed delayed coking unheading units. The acquisition is expected to close within the next 60 days.
Upon the closing of the land acquisition, a three-month site preparation project will begin as will LianDi's design of its manufacturing facility. The completion of the new facility will be accomplished in two major phases: Phase I includes the installation of major utility infrastructure, which includes water, gas and electricity supply and Phase II includes the construction of the manufacturing facility. Phase I is expected to be completed by the end of 2010. Production is expected to begin by the third quarter calendar year 2011, with 5 initial shipments of unheading units planned for the first full year of production, which is expected to contribute at least $10 million in revenues for the Company's fiscal year ending March 31, 2012.
"Acquisition of this land strategically located in China's Tianjin Port Industry Area, a special economic development zone to foster growth in northern China, is a significant step forward in our development of a new manufacturing facility to produce our state-of-the-art, totally enclosed delayed coking unheading units for the growing oil refining industry," stated Mr. Jianzhong Zuo, chairman, chief executive officer and president of the Company. "With the importation of oil growing rapidly in China, so is the need for cost-effective, safe and economically advantageous technologies for the oil refining industry. As China diversifies its crude oil import sources and expands oil production domestically, refiners will require optimal solutions for refining inferior domestic and imported crude oil. We look forward to participating in this opportunity by delivering to our valued customers, including Sinochem Quanzhou and others, innovative solutions such as our unheading units for the delayed coking process, the first of their kind in China."
LianDi is engaged in modernizing delayed coking in China's oil refining industry and plans to install clean and safe enclosed unheading units in China in the first quarter of 2011. Delayed coking is a thermal process that breaks heavy crude oil into lighter, more valuable fluids which are captured, while a solid coal-like byproduct called "coke" remains in the drum. Unheading units are used in delayed coking to "unhead" or open the coke drum for the removal of the residual coke. Due to the extreme temperatures required in the process, unheading can be one of the most hazardous refinery operations. Despite the related hazards, delayed coking is the preferred solution for refining inferior domestic and imported crude oil.
LianDi, in conjunction with DeltaValve, has developed an affordable, environmentally friendly, safe and maintenance free enclosed coke-drum unheading system for the Chinese marketplace. LianDi's clean-technology solution is fully automated and provides significant advantages over other available unheading equipment because it eliminates exposure to workers and the environment. Installation of LianDi's enclosed unheading units can also generate significant economic benefits to oil refiners, both in terms of cost savings through higher operating efficiencies as well as tax incentives for energy saving, environmentally friendly technologies.
The projected market for coking units is expected to grow to $1.0 billion over the next ten years driven in large part by China's growing consumption of oil and by supportive governmental policies. China's net oil imports reached 4.1M bbl/d in 2009, making it the second largest net oil importer in the world. As of December 2009, crude oil refining capacity in China reached 477 million tons. China's National Energy Administration's (NEA) goal is to raise refining capacity by 50 percent in the next 5 years and expected to reach 750 million tons, or 15 million barrels per day, by 2015.