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Shaw Expands Pipe Fabrication Capacity By 30% to Meet Industry Demand for Fabricated Industrial Pipe and Piping Systems

February 5, 2007

The Shaw Group Inc. (NYSE: SGR) today announced that it has taken decisive steps to expand its pipe fabrication capacity by approximately 30% to support significant current and anticipated future increases in industrial demand for fabricated pipe and piping systems, particularly from the power, refining and petrochemicals sectors. Already the largest pipe fabricator in the United States, Shaw’s strategic expansion program includes the expansion and reopening of existing facilities, acquisitions, as well as potential development of new-build facilities in the U.S. or internationally.

As part of this strategic initiative, Shaw has acquired Mid States Pipe Fabrication, Inc., one of the top five pipe fabricators in the U.S. The acquisition includes a modern 150,000 square foot pipe fabrication shop with radiographic and painting facilities on a 48-acre site in El Dorado, Arkansas. Mid States Pipe Fabrication specializes in fabrication of complex piping systems from raw materials including carbon steel, stainless steel, chrome, titanium, aluminum and other metals. Mid States is fully staffed and operating and is expected to immediately increase Shaw’s pipe fabrication capacity. Shaw also expects that production at the Mid States facility potentially could be increased significantly in the near future. Financial terms of the Mid States acquisition were not disclosed.

Shaw also announced that it is currently expanding operations at its Sunland facility in Walker, Louisiana, one of the nation’s single largest pipe fabrication and manufacturing sites. The expansion at the Sunland facility will include an additional 20% of enclosed fabrication shop space and an additional 10 acres of lay down and pipe storage yard. The expansion is expected to increase the facility’s production capacity by approximately 30%. The expansion at Sunland is expected to bring total employment at the facility to over 650. As previously announced, Shaw also recently reopened its 130,000 square foot pipe fabrication facility in Tulsa, Oklahoma.

J.M. Bernhard, Jr., Chairman, President and Chief Executive Officer of Shaw, said, “The addition of Mid States, combined with the expansion at Sunland and the reopening of our Tulsa facility, are important initial steps in our overall strategy to meet current and forecasted pipe fabrication and manufacturing demand from our valued customers. These initial steps are expected to add approximately 30% to our overall pipe fabrication production capacity. This expansion strategy will be integral to sustaining our position as the world’s premier pipe fabrication and manufacturing company and in supporting our mission to provide our clients with a single source for value-added solutions.”

Mr. Bernhard continued, “We welcome Mid States to the Shaw team. Known for their quality workmanship and outstanding customer service, Mid States is one of the top five pipe fabricators in the country and is a natural fit with our operations. We are also particularly pleased to expand our Sunland facility and reopen our Tulsa location. We look forward to providing additional opportunities to the skilled workforces in those communities and strengthening our position as the world leader in pipe fabrication and manufacturing expertise.”

The Shaw Group Inc. is a leading global provider of engineering, procurement, construction, technology, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the energy, chemical, environmental, infrastructure and emergency response markets. Headquartered in Baton Rouge, Louisiana, with nearly $5 billion in annual revenues, Shaw employs approximately 21,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit Shaw’s website at www.shawgrp.com.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that the Company or its management “believes,”"expects,”"anticipates,”"plans,” or other similar expressions) and statements related to revenues, earnings, backlog, or other financial information or results are forward-looking statements based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company’s reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q reports, and on the Company’s web-site under the heading “Forward-Looking Statements”. These documents are also available from the Securities and Exchange Commission or from the Investor Relations department of Shaw. For more information on the company and announcements it makes from time to time on a regional basis visit our web site at www.shawgrp.com.




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