Shaw Signs Letter of Intent with SABIC for High Density Polyethylene Plant in Saudi Arabia.

BATON ROUGE, La. -- The Shaw Group Inc. (NYSE: SGR) today announced that its Shaw Stone & Webster unit has signed a letter of intent with Saudi Basic Industries Corp. (SABIC) for engineering, procurement, construction and commissioning of a 400,000 metric ton per annum high density polyethylene (HDPE) plant. The new HDPE plant will be located within SABIC's YANSAB affiliate petrochemical complex in Yanbu, Saudi Arabia and is expected to be completed in 2008. Under the letter of intent, Shaw has begun engineering and procurement activities. The value of the HDPE project was not disclosed.

J.M. Bernhard, Jr., Chairman and Chief Executive Officer of Shaw, said, "Shaw is extremely pleased to have been selected by SABIC to provide its engineering and construction expertise for this very important project. Our expert polymers team in Toronto, Ontario will lead this SABIC project and is already fully engaged in initial engineering and planning work. This award further strengthens Shaw's leadership position in the rapidly expanding petrochemical and polymers market in the Middle East."

Shaw Stone & Webster is an established leader in ethylene technology and down stream ethylene and propylene-based products, having provided technology, design, engineering and/or construction on more than 120 ethylene plants worldwide. Approximately 35 percent of the world's incremental production since 1990 has been based on Shaw's technology. Ethylene plants using Shaw Stone and Webster proprietary technology have established a worldwide reputation for exceptionally high operational reliability, rapid startup and superior performance. Shaw has recently completed a 600,000 metric ton-per-year ethylene plant that it engineered and constructed in Nanjing, China for BASF-YPC and has begun construction on a 1.3 million metric-ton ethylene plant in Saudi Arabia for SHARQ.

The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for the energy, chemicals, environmental, infrastructure and emergency response markets. With over $3 billion in revenues, Shaw is headquartered in Baton Rouge, Louisiana, and employs approximately 20,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. The Company was recently named for the second consecutive year to Fortune magazine's annual list of "America's Most Admired Companies". 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 website 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 website at www.shawgrp.com.