MFRI Announces Its Perma-Pipe Middle East Subsidiary Has Received an $8 Million Order to Manufacture a Specialty Pipeline for Qatar Gas.

NILES, Ill. -- MFRI, Inc. (NASDAQ NM:MFRI), announced today that Perma-Pipe Middle East, FZE, ("PPME"), a subsidiary, has received an order to manufacture a sulfur transportation pipeline at PPME's manufacturing plant in Fujairah in the United Arab Emirates, ("UAE") . The $8 million order was placed by Al Jaber Energy Services, a leading Oil and Gas services contractor.

MFRI is a leading manufacturer of factory pre-insulated piping systems for oil and gas gathering, district heating and cooling and other specialty applications; custom-designed industrial filtration products to remove particulates from dry gas streams, and thermal transfer equipment to remove heat from molding, printing and other industrial processes.

The order is for the manufacture of approximately 34 Kilometers, (21 miles) of insulated and heat-traced pipe for the transportation of sulfur, a byproduct of refining sour gas prior to exporting the natural gas to consumers throughout the world. The sulfur will be transported in a liquid state, using the heated and insulated pipeline, to port facilities from which it is exported for the manufacture of fertilizer and other products.

Perma-Pipe announced the opening of its manufacturing facility in Fujairah, UAE during March 2006. The facility is now fully operational and, during the startup, training and commissioning period, produced over $2,000,000 of various smaller projects delivered to Qatar, Oman, Kuwait, and the UAE.

"We are very pleased by our progress at PPME; we have hired and trained our workers and managers who come from many countries in the Middle East, Far East and Europe. We have now secured a large scale order for the very important oil and gas sector in the Middle East" said Fati Elgendy, President and Chief Operating Officer of Perma-Pipe, Inc.

"The oil and gas market is essential to the success of our global strategy. The diversification in the markets and territories we can serve from our PPME facility surely will contribute to the goal of offering our products on a world wide basis." added David Unger, Chief Executive Officer and Chairman, MFRI, Inc.

For more information visit the Company's website <www.mfri.com> or contact the company directly.

Statements and other information contained in this announcement which can be identified by the use of forward-looking terminology such as "anticipate," "may," "will," "expect," "continue," "remain," "intend," "aim," "should," "prospects," "could," "future," "potential," believes," "plans," "likely," and "probable," or the negative thereof or other variations thereon or comparable terminology, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended and are subject to the safe harbors created thereby. These statements should be considered as subject to the many risks and uncertainties that exist in the Company's operations and business environment. Such risks and uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, raw material availability and prices, global interest rates, currency exchange rates, labor relations and other risk factors.