Graham Corporation Awarded $2.7 Million Saudi Arabian Order

Business Wire, May 16, 2006

BATAVIA, N.Y. -- Graham Corporation (AMEX: GHM) announced today that it received an order valued at $2.7 million from a Japanese turbomachinery manufacturer for four steam surface condensers. The condensers are slated to be installed in a Jubail, Saudi Arabia ethylene plant owned by Eastern Petrochemical Company (SHARQ), a joint venture of Saudi Arabia Basic Industries (SABIC). Known as the SHARQ Third Expansion project, the facility will be one of the largest petrochemical complexes in the world upon its completion in 2008. Revenue for this contract will be recognized on a percentage-of-completion basis, and shipment is presently scheduled for the fourth fiscal quarter ending March 31, 2007. Graham's previously announced fiscal year 2007 anticipated revenue of $72 million is inclusive of this contract.

William C. Johnson, Graham's President and CEO, commented, "We expect the build-up of capacity in the Middle East to continue since the low cost of natural gas resources make the region economically advantageous for petrochemical facility expansion. Although we faced stiff competition from European and Asian competitors on this contract, once again our reputation for quality as well as our ability to custom engineer solutions gave us the competitive edge. We are pleased that our equipment will be a part of this world-class operation."

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.