Toyo Engineering Corporation (TEC), with the help of Nissho Iwai Corporation, has won a refinery modernization project, planned by Brazil' s sate-owned petroleum corporation, PETROBRAS(headquartered in Rio de Janeiro), to modernize its Refinaria Alberto Rasqualini (REFAP) in the State of Rio Grande do Sul of south Brazil.

After years of negotiations which have been conducted by Nissho Iwai and TEC together since 1997, an agreement has been reached for this large refinery modernization project which calls for a Residual Fluid Catalytic Cracking (RFCC) Unit (44,000 bpd), a Hydrotreater Unit (25,000 bpd), a Delayed Coker Unit (12,600 bpd), and related utility facilities & peripheral accommodations. This contract, which is worth about 35 billion yen, is due to be completed by the end of 2003.

To finance this project, buyer's credit is to be provided by Japan Bank for International Cooperation, which Nissho Iwai has been instrumental in arranging as well as syndicated banker loans, having effectively facilitated TEC's successful winning of the contract.

Nissho Iwai has a long-standing friendly business relationship with PETOBRAS which goes back to more than 30 years ago, having participated over the years in many of Brazil's development projects ranging from offshore resources development in the upstream to refinery projects in the downstream, such as the BC-4 and the Frade mining areas and Albacora oil field. Nissho Iwai would like to maintain and even improve the high reputation and trust it enjoys from PETROBRAS so that its business relationship with PETOBRAS will be an even closer and more rewarding one in years ahead.

The scope of TEC's duties and responsibilities under this new contract is the machinery & equipment procurement, and the detailed plant designing after the basic plant designing, which TEC had already completed in May 2000 under its December 1999 contract with PETOBRAS. Since then, TEC has been pursuing this new modernization contract. The Residual Fluid Catalytic Cracking (RFCC) Unit to be supplied under this contract as the second such unit from TEC to PETROBRAS is of the world's largest refining capacity. TEC has an excellent track record in this area across the world, having also won a contract last December to supply a fluid catalytic cracking unit to Tosco Corporation of the U.S.