L&T nears $2.5 bn deals in West Asia
The contracts would be to supply critical reactors and heat exchangers for refineries, a source familiar with the bidding process said, reports Indulal PM.business Updated: Mar 20, 2008 21:31 IST
Engineering and construction major Larsen & Toubro is close to bagging three major petrochemical contracts worth over $2.5 billion (Rs 10,000 crore) from the Middle East.
The contracts would be to supply critical reactors and heat exchangers for refineries, a source familiar with the bidding process said.
Last month, L&T won a $431 million (Rs 1,725 crore) order from Kuwait National Petroleum Co to supply 22 hydro-crackers and desulphurisation reactors. It was the single largest order to any fabricator.
"L&T is bidding for three more similar refinery projects in the Middle East. The contract would be worth $2-2.5 billion," the source said.
The major chunk of this contract would be from Saudi Arabia, where state-controlled oil firms and a few foreign players are building a $20 billion refinery project. "The company is also in the race for two more similar deals from Qatar and Kuwait," the source said. However, specific details regarding each of these oil projects were unavailable.
"These (contracts) are from refineries and petrochemical firms. They are mainly for high pressure heat exchangers and tubular reactors," he said.
A senior L&T executive confirmed the development and said, "We are bidding for larger petrochemical contracts in the Middle East."
Overseas revenues constitute 20 per cent of L&T's total revenue, and the majority of this comes from the Middle East. The company has plans to increase this business to about 25 per cent of its total revenue. In the last two months alone, L&T has won orders of over $1.3 billion to execute projects across the region. These range from critical reactors for the hydrocarbon sector to electrical substations and factory complexes. The company is eyeing $2 billion revenue from the region by 2010.