B&W Awarded Environmental Equipment Contract for AEP'S Amos Plant in West Virginia.

HOUSTON -- McDermott International, Inc. (NYSE:MDR) ("McDermott") announced today that its deconsolidated subsidiary The Babcock & Wilcox Company ("B&W") has been awarded a contract valued well in excess of $100 million to supply and construct wet flue gas desulfurization ("WFGD") systems at the John E. Amos power plant in St. Albans, W. Va. The plant is owned and operated by Appalachian Power Company, a unit of American Electric Power ("AEP").

B&W will design and install the sulfur dioxide (SO2)-reducing equipment, also known as scrubbers, on the plant's three boilers: Units 1 and 2 are 800 MW each, and Unit 3 is 1,300 MW. At a total of 2,900 MW, the Amos Plant is the largest power plant on the AEP system and one of the largest coal-fired plants in the world.

Units 1, 2 and 3 -- started up in 1971, 1972 and 1973, respectively -- are supercritical, dry-bottom boilers powered by a blend of low-sulfur coal and Northern Appalachian Basin high-sulfur coal. B&W's WFGD systems are designed to reduce SO2 emissions.

"Since our first scrubber installation in 1973, we have supplied WFGD systems for nearly 90 units totaling more than 53,000 MW," said B&W President David L. Keller. "We value the confidence AEP places in our experience, the operating record of our equipment and in our ability to help the Amos plant team meet critical air quality objectives."

The contract calls for the supply of two absorber islands, single absorber towers for Units 1 and 2 that each measure 68.5 feet in diameter and more than 159 feet high, and two absorber towers for Unit 3 that measure 61 feet in diameter and 153 feet high. Also included are three limestone ball mills with silos and classifiers, associated tanks, agitators and pumps for the reagent preparation island; three horizontal vacuum belt filter dewatering trains and associated hydroclones, tanks, agitators and pumps for the dewatering island; and absorber oxidation air compressors, absorber recycle system and tanks, agitators and pumps for the towers.

Design and engineering for the three WFGD systems are currently underway at B&W's headquarters in Barberton. B&W subsidiary Babcock & Wilcox Construction Co., Inc., will erect the equipment. Unit 3 is scheduled to be completed by the end of 2007, and Units 1 and 2 are scheduled to go online by the end of 2008.

Headquartered in Charleston, W. Va., Appalachian Power serves 929,000 customers in West Virginia, Virginia and Tennessee. Appalachian Power is part of the American Electric Power system, which owns more than 36,000 megawatts of generating capacity in the United States and is the nation's largest electricity generator. Based in Columbus, Ohio, AEP is also one of the largest electric utilities in the United States, with more than five million customers linked to its 11-state electricity transmission and distribution grid.

The Babcock & Wilcox Company, headquartered in Barberton, Ohio, USA, and located on the Internet at www.babcock.com, is a subsidiary of McDermott International, Inc. McDermott is a leading worldwide energy services company. McDermott's subsidiaries provide engineering, fabrication, installation, procurement, research, manufacturing, environmental systems, project management and facilities management services to a variety of customers in the energy industry, including the U.S. Department of Energy.

In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott International, Inc. cautions that statements in this press release which are forward-looking and which provide other than historical information, involve risks and uncertainties that may impact McDermott's actual results of operations. The forward-looking statements in this press release include statements related to the dollar value of the AEP contract and the expected work scope of the AEP contract. Although McDermott's management believes that the expectations reflected in those forward-looking statements are reasonable, McDermott can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous uncertainties and risks including, without limitation, that the AEP contract may not be completed on the terms or within time frame described as a result of changes to the contract and other factors. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these risk factors, please see McDermott's annual report on Form 10-K for the year ended December 31, 2004 and its reports on Form 10-Q which are filed quarterly.