Flowserve Announces Agreement with Saudi Aramco for the Yanbu’ Export Refinery Project

Published on Monday, 02 August 2010 17:41 Written by TradersHuddle Staff

DALLAS-( Business Wire )-

Flowserve Corporation (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, announced it has received final approval from Saudi Aramco on a master purchase agreement to supply pumps, valves and services for the Yanbu’ Export Refinery Project (YERP).

Under the terms of the corporate procurement agreement (CPA) established between Flowserve and Saudi Aramco, Saudi Aramco plans to make significant future purchases of Flowserve pumps, valves and value-added services. Flowserve expects to begin booking orders under the CPA later in 2010.

Flowserve cited its Kingdom of Saudi Arabia manufacturing facility, strong aftermarket support capabilities, broad product portfolio, technology leadership, and long-standing partnership with Saudi Aramco as its key reasons for winning this agreement.

“We are pleased to expand our relationship with Saudi Aramco for the important YERP project, which will help meet expanding global energy demand by increasing refining capacity in the Middle East,” said Tom Ferguson, president, Flow Solutions Group. “Flowserve has made significant investments in the Kingdom of Saudi Arabia, including service, repair and manufacturing facilities to support the oil and gas industry, and to help ensure premium service can be provided in-country.”

Under construction on the west coast of Saudi Arabia, YERP will be a 400,000 barrel-per-day, full-conversion refinery being built in Yanbu’ Industrial City, Saudi Arabia. The refinery is designed to process Arabian heavy crude and will produce high-quality, ultra-low sulfur refined products, including gasoline and diesel fuel. The new refinery is expected to be operational in 2014.

“This agreement reinforces Flowserve’s ongoing commitment to delivering valve products and services in Saudi Arabia through our local facilities,” said Tom Pajonas, president, Flow Control Division. “This overall Flowserve strategy is supported by the fact that the project will require a majority of the Flowserve control valves to be produced at our new Dammam valve and actuator facility, which we plan to open in the third quarter of 2010. When completed, the facility will be one of several sites Flowserve has in the region.”

In addition, Flowserve and its partners operate Quick Response Centers (QRCs) in the Kingdom of Saudi Arabia, which provide service and repair. These operations help support the Saudi Aramco supply chain with access to Flowserve technology and innovative solutions.

About Saudi Aramco

Owned by the Saudi Arabian Government, Saudi Aramco is a fully-integrated, global petroleum enterprise, and a world leader in exploration and producing, refining, distribution, shipping and marketing. The company manages proven reserves of 260 billion barrels of oil and manages the fourth-largest gas reserves in the world, 275.2 trillion cubic feet. In addition to its headquarters in Dhahran, Saudi Arabia, Saudi Aramco has affiliates, joint ventures and subsidiary offices in China, India, Japan, the Netherlands, the Republic of Korea, Singapore, the United Arab Emirates, the United Kingdom and the United States. For more information, go to www.saudiaramco.com

About Flowserve Corp.

Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 55 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company’s Web site at www.flowserve.com.

SAFE HARBOR STATEMENT: This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as, “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.

The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: a portion of our bookings may not lead to completed sales, and our ability to convert bookings into revenues at acceptable profit margins; changes in the global financial markets and the availability of capital and the potential for unexpected cancellations or delays of customer orders in our reported backlog; our dependence on our customers’ ability to make required capital investment and maintenance expenditures; risks associated with cost overruns on fixed-fee projects and in taking customer orders for large complex custom engineered products; the substantial dependence of our sales on the success of the oil and gas, chemical, power generation and water management industries; the adverse impact of volatile raw materials prices on our products and operating margins; our ability to execute and realize the expected financial benefits from our strategic realignment initiatives; economic, political and other risks associated with our international operations, including military actions or trade embargoes that could affect customer markets, particularly Middle Eastern markets and global oil and gas producers, and non-compliance with U.S. export/re-export control, foreign corrupt practice laws, economic sanctions and import laws and regulations; our exposure to fluctuations in foreign currency exchange rates, particularly in hyperinflationary countries such as Venezuela; our furnishing of products and services to nuclear power plant facilities; potential adverse consequences resulting from litigation to which we are a party, such as litigation involving asbestos-containing material claims; a foreign government investigation regarding our participation in the United Nations Oil-for-Food Program; expectations regarding acquisitions and the integration of acquired businesses (including the Valbart Srl acquisition); our foreign subsidiaries autonomously conducting limited business operations and sales in certain countries identified by the U.S. State Department as state sponsors of terrorism; our relative geographical profitability and its impact on our utilization of deferred tax assets, including foreign tax credits; the potential adverse impact of an impairment in the carrying value of goodwill or other intangible assets; our dependence upon third-party suppliers whose failure to perform timely could adversely affect our business operations; the highly competitive nature of the markets in which we operate; environmental compliance costs and liabilities; potential work stoppages and other labor matters; our inability to protect our intellectual property in the U.S., as well as in foreign countries; obligations under our defined benefit pension plans; and other factors described from time to time in our filings with the Securities and Exchange Commission.

All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.

Flowserve CorporationInvestor Contact:Paul Fehlman, 972-443-6517vice president, financial planning & analysis and investor relationsorMedia Contact:Steve Boone, 972-443-6644director, global communications & public affairs