Graham Corporation Wins $3.2 Million Singapore Refinery Contract

Business Wire, June 29, 2006

BATAVIA, N.Y. -- Graham Corporation (AMEX: GHM) announced today that it has been awarded a $3.2 million contract for a condenser and ejector system to be installed in one of the largest oil refineries in Southeast Asia. Located in Singapore, the refinery will use Graham's equipment to process a more corrosive crude oil feedstock than the type of feedstock for which the plant was originally designed. The refinery's original ejector system, supplied by Graham in 1980, will be replaced to revamp the vacuum distillation unit. The new surface condenser, which is for a gas compressor turbine driver, will replace the original condenser that Graham supplied in 1997.

Graham's wholly-owned subsidiary based in Suzhou, China, was instrumental in providing the design and engineering concept and in negotiating this contract. Graham will engineer and fabricate the new condenser and ejector system in Batavia, NY, due to an accelerated schedule and material requirements that need specialized fabrication capability.

James R. Lines, President and Chief Operating Officer of Graham Corp., commented, "Our China-based team worked closely with the refinery to identify its key concerns. Reliability, quality, critical delivery timeline, and supplier confidence were important criteria for the refinery. Although we were competing against low-cost Asian manufacturers, we ultimately won the contract based on the excellent performance of the original Graham equipment and our reputation for delivering quality, highly-engineered products."

Revenue for this contract will be paid in U.S. dollars and recognized on a percentage-of-completion basis. Shipment is presently scheduled for the fourth fiscal quarter ending March 31, 2007. Graham's fiscal year 2007 anticipated revenue of $75 to $80 million is inclusive of this contract.

ABOUT GRAHAM CORPORATION

With world-renowned engineering expertise in vacuum and heat transfer technology, Graham Corporation is a designer, manufacturer and global supplier of ejectors, pumps, condensers, vacuum systems and heat exchangers. Over the past 70 years, Graham Corporation has built a reputation for top quality, reliable products and high-standards of customer service. Sold either as components or complete system solutions, the principle markets for Graham's equipment are the petrochemical, oil refining and electric power generation industries, including cogeneration and geothermal plants. Graham equipment can be found in diverse applications, such as metal refining, pulp and paper processing, ship-building, water heating, refrigeration, desalination, food processing, drugs, heating, ventilating and air conditioning.

Graham's reach spans the globe. Its equipment is installed in facilities from North and South America to Europe, Asia, Africa and the Middle East. More information regarding Graham can be found at its website: www.graham-mfg.com

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Graham's Annual and Quarterly Reports filed with the Securities and Exchange Commission, include Graham's ability to successfully execute the contract, that the estimated value of the production contract will be realized, customer preferences and changes in market conditions in the industries in which Graham operates. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.