1.067 billion yuan! Lanshi Heavy Equipment signed the EPC general contract for Huafeng Petrochemical’s 1 million tons per year heavy oil-to-olefins and aromatics project

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On the evening of February 5, Lansi Heavy Equipment issued a announcement stating that the company had signed an EPC turnkey project contract with Zhuhai Huafeng Petrochemical Co., Ltd. The total value of the contract was 1.06657 billion yuan, to be paid directly by the client, Huafeng Petrochemical, to Lansi Heavy Equipment based on the progress of the EPC project. This amount includes a design fee of 14.84 million yuan that is due to the subcontractor, Shanghai Hetu Engineering Co., Ltd. According to the announcement, the name of this project is the 1 million tons per year heavy oil to olefins and aromatics project of Zhuhai Huafeng Petrochemical Co., Ltd. The scope of work includes the engineering design for the project (which encompasses raw material preprocessing, units for converting heavy oil into olefins and aromatics, units for aromatics desulfurization and denaturation, gas fractionation units, MTBE production units, and gasoline etherification units), the procurement of equipment and materials, construction work, and all tasks up to the intermediate handover stage. Additionally, it involves assisting the client in carrying out joint commissioning and performance testing of the facilities. ? The contract issuer is Zhuhai Huafeng Petrochemical Co., Ltd., established on September 23, 2005, with a registered capital of 480 million yuan. Its business scope includes the production and sale of road asphalt and its by-products, as well as 4# and 7# fuel oils. ? Lanxi Heavy Equipment serves as the lead contractor for the project, while Shanghai Hetu Engineering Co., Ltd. acts as the joint contractor responsible for the engineering design. Lanshi Heavy Equipment will complete the project handover 12–14 months after receiving the advance payment from Huafeng Petrochemical. 　　 The announcement states that the total contract value represents 61.45% of the company’s audited operating revenue for 2016. The fulfillment of this contract will further enhance the company’s capabilities in the operation and maintenance of engineering projects, expand its industrial chain, and promote coordinated development across all stages of this chain. This, in turn, will have a positive impact on the company’s financial performance this year and in the coming years. Industry experts say that Lansi Heavy Equipment has been engaged in the petrochemical equipment manufacturing sector for over 60 years. Its main business activities include the research, development, design, manufacturing, and overall project management of high-end energy equipment in various fields such as refining and coal chemical industries – including high-pressure vessel equipment, rapid forging unit equipment, plate heat exchangers, as well as equipment for nuclear power and new energy sources. Lanshi Heavy Equipment boasts outstanding technical capabilities; it has carried out independent research and development in the field of manufacturing advanced technical equipment for industries such as oil refining and chemical processing, filling many gaps in domestic equipment supply, and its products have received high recognition from users. The company began its strategic transformation into the EPC business in 2014 and has continued to receive EPC project orders. Efforts are currently being made to acquire Luoyang Ruize Petrochemical Engineering Company, in order to create synergies in terms of design and engineering capabilities as well as customer relationships, thereby forming a strong partnership and further expanding the EPC business. Looking ahead, the construction of seven major petrochemical bases in China during the 13th Five-Year Plan period, along with a moderate recovery in the coal chemical industry, are expected to boost demand for petrochemical and coal chemical equipment. The company is expected to receive more orders. The implementation of this contract will further enhance the company’s reputation and influence in the oil refining and chemical industry, boost the value of the Lansi brand, and create favorable conditions for further expanding its market presence in various regions.