Aegion Corporation and Materia, Inc. Partner to Commercialize a New Pipe Insulation Technology for the Shell Appomattox Project

Aegion Corporation, today announced it is on schedule to begin this fall pipe coating and the application of an innovative pipe insulation material for use on the Shell Appomattox project. The insulation material vendor for the project, Materia, Inc. (“Materia”), is also on schedule with respect to the project. Shell Offshore, Inc., a wholly owned subsidiary of Royal Dutch Shell plc (“Shell”), selected Aegion’s subsidiary, The Bayou Companies, LLC (“Bayou”), to provide the pipe coating and insulation for the Appomattox development located in the deep water of the Gulf of Mexico.

Aegion is collaborating with Materia to supply Materia’s Proxima® HTI-1400 subsea insulation system for the project. The newly developed thermosetting cross-linked hydrocarbon polymer system provides a robust thermal barrier between flowlines and seawater. The insulation system is a stable incompressible solid in deep water environments involving water depths greater than 10,000 feet. Materia recently completed the first phase of the required expansion of its Huntsville, Texas facility to produce the new thermal insulation material and is proceeding with the commissioning process. The second phase of the expansion is expected to occur in the second and third quarters of 2016, which would meet the schedule for full-scale production this fall.

A state-of-the-art insulation coating facility designed for the Appomattox project is currently under construction at Bayou’s New Iberia, Louisiana location, where Bayou will provide anti-corrosion pipe coating and ancillary services. Bayou Wasco Insulation, LLC (“Bayou Wasco”), a joint venture between Aegion and Malaysia-based Wasco Energy, Ltd, is a leader in proprietary insulation coatings and is uniquely suited to service the deep water pipeline market in the Gulf of Mexico. In partnership with Materia and Shell, Bayou Wasco has developed the proprietary ACS™ HT-200 pipe insulation coating application process. Bayou is currently receiving specialized equipment for the insulation application as construction on the new facility continues for completion this summer. Bayou expects to begin insulation application production during the fourth quarter of 2016.

Charles R. Gordon, Aegion’s President and Chief Executive Officer, said, “Our collaboration with Materia demonstrates our commitment to work with customers to provide world-class coating, insulation, logistics and prefabrication solutions. The new proprietary pipe insulation application process will permit safe and efficient transportation of crude oil from deep water oil field developments in the Gulf of Mexico. We are proud of our capabilities to provide large-scale project support to Shell and remain committed to providing high-quality pipeline corrosion protection, flow assurance and other services for their pipeline assets in the Gulf Coast region.”

Nitin Apte, Materia’s President and Chief Executive Officer, commented, “Materia’s thermal insulation provides a simple and cost-effective solution to the challenges of deep water oil and gas production. The selection of Bayou, Bayou Wasco and Materia to provide the insulation system for the subsea Appomattox oil reserve operating environment validates Bayou Wasco’s insulating expertise and Materia’s state-of-the-art material science technology, which provides an innovative and robust technology solution for pipeline flow assurance.”

The Shell Appomattox oil reserve is located approximately 80 miles off the coast of Louisiana at a depth of about 7,200 feet. The pipe coating and insulation project, which involves more than 200 miles of production flowlines and transmission pipelines, is expected to be completed 12 to 18 months after the start of pipe coating and insulation application.