Fluor Wins Engineering Contract for Canadian Mega-Project

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Wednesday, June 14, 2006

Engineering and construction giant Fluor Corporation (NYSE: FLR) today announced that it has been selected to provide front-end engineering and design (FEED) services for a $2 billion expansion project for Husky Energy Inc., a leading integrated energy and energy-related company headquartered in Calgary.

Fluor's FEED work is necessary for Husky to proceed with plans to double the capacity of its heavy oil upgrader -- located in Lloydminster, Saskatchewan, Canada — from approximately 80,000 barrels per day to a potential capacity of 150,000 barrels per day. According to officials, the expansion will prepare Husky to process the forecasted growth from its heavy oil operations in the Lloydminster area and from its Tucker Oil Sands Project in Cold Lake, Alberta. The facility processes heavy oil into high quality, low sulphur synthetic crude oil to be used as feedstock for refineries in Canada and the United States.

"The expansion is a key part of Husky's continuous strategic investment and leverages our existing upgrader and pipeline infrastructure in the Lloydminster region," said John C.S. Lau, Husky's president and CEO. "We choose Fluor to perform the FEED work on this project because we feel that they will help us reach our goals of strengthening our integrated status and enhancing our shareholders value."

The contact's value to Fluor is $88 million and was booked in the company's first quarter. Work will be led by Fluor's office in Calgary and is expected to be completed in 2007, at which time Husky will proceed with project approvals and, then, construction.

"Fluor is eager to support Husky on this important mega-project," said Jeff Faulk, Fluor's group president of Energy & Chemicals. "We have been involved in various small studies at the Husky Lloydminster Upgrader over the past several years and we look forward to using our expertise to make the dream of expansion a reality for Husky."

The proposed expansion will bring Husky's Lloydminster area processing capacity to 175,000 barrels per day including 25,000 barrels per day from its asphalt refinery. Upon completion of the expansion, Husky's anticipated heavy oil production combined with the volumes from the Tucker Oil Sands Project makes Husky a fully integrated oil producer.

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