Punj Lloyd Secures $162 Million EPC Contract from Indian Oil Corporation

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Researched by Industrial Info Resources (Sugar Land, Texas)--Engineering, procurement and construction EPC) major Punj Lloyd Limited (BOM:532693) (New Delhi, India) recently clinched a $162 million deal from the Indian Oil Corporation (IOC) (BOM:530965) (New Delhi) to upgrade IOC's Barauni Refinery in Bihar to produce improved motor spirit (gasoline) quality that will adhere to Euro-III emissions standards to reduce vehicular pollution. The scope of the order includes EPC work and the commissioning of the unit within 23 months. Punj Lloyd will also set up a 274,000-ton-per-year splitter unit, a 183,000-ton-per-year naphtha hydrotreating unit, a 126,000-ton-per-year isomerization unit, a nitrogen unit and a compressed air system.

This is the second motor spirit quality improvement project IOC has awarded to Punj Lloyd, which had earlier been involved with the motor spirit quality improvement project in the process units at IOC's Haldia Refinery in West Bengal. This is also the fifth EPC contract that Punj Lloyd has secured from IOC.

This deal was signed shortly after Punj Lloyd entered into an agreement with Singapore Technologies Kinetics, the specialty vehicles and land systems arm of Singapore Technologies Engineering Limited (SIN:S63) (Singapore), to jointly pursue orders for the manufacture of military equipment in India. Punj Lloyd has secured a license from India's government to manufacture guns, missile artillery systems, rockets and related equipment. The partners are eyeing two contracts valued at $1 billion to supply 350-mm howitzer and 155-mm, .52-caliber guns to the Indian army.

Punj Lloyd had invested $101 million to secure a 25.1% stake in Pipavav Shipyard Limited (Mumbai). It will undertake the manufacture of jackets, platforms, rigs and single-buoy moorings in addition to fabrication of frigates and the refurbishing of the aircraft carrier for the Indian navy.

Seven percent of India's gross domestic product is reserved annually for defense-related expenditures. Punj Lloyd is aggressively pursuing opportunities arising from India's defense offset policy that requires foreign contractors to procure systems and components from local manufacturers for at least 30% of the total value of deals worth more than $75 million.

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