News Release

HOUSTON--(BUSINESS WIRE)--Jan. 25, 2012-- McDermott International, Inc. (NYSE:MDR) (“McDermott”) announced today that its Australian subsidiary has received and signed a letter of award for the Ichthys Gas-condensate Field Development subsea umbilical, riser, flowline (“SURF”) project by INPEX. The contract value is in the order of magnitude of US$2 billion and is the largest subsea contract McDermott has been awarded to date.

McDermott's specialty subsea vessel North Ocean 102 will undertake the installation of subsea hardware, moorings, risers, umbilicals and flowlines for Ichthys SURF project. (Photo: Business Wire)

This project includes engineering, procurement, construction, installation (“EPCI”) and pre-commissioning of production flowline systems, a MEG injection system, plus start-up condensate transfer and fuel gas transfer flowline systems, control systems as well as other associated SURF elements in water depths up to 275 meters. McDermott will also install mooring systems for the Floating Production, Storage and Offtake vessel and Central Processing Facility as well as installation engineering for future flowlines, risers and umbilicals.

McDermott has already begun engineering and procurement work and is expected to start fabrication of more than 16,000 tonnes of subsea equipment, including a subsea Riser Support Structure and installation aids, at its Batam Island, Indonesia fabrication facility beginning in 2013. The complex offshore installation campaign will see McDermott undertake the installation of subsea hardware, moorings, risers, umbilicals and flowlines utilizing its specialty subsea vessels Emerald Sea and North Ocean 102. McDermott is working with Heerema Marine Contractors (“Heerema”) for transportation and installation of a portion of the offshore scope, utilizing the heavy lift, J-Lay and Reel-Lay capability of Heerema’s new-build vessel Aegir.

Stephen M. Johnson, Chairman of the Board, President and Chief Executive Officer, McDermott said, “McDermott has a long track record working on EPCI projects offshore Australia. This major SURF award firmly endorses McDermott’s core EPCI competencies and our competitive subsea construction vessels, combined with Heerema’s installation strength and the team’s alignment with INPEX. This is a large scale and complex development, and we are firmly behind promoting the success of this LNG project.”

The Ichthys LNG Project is a Joint Venture between INPEX (76%, the Operator) and Total (24%). Gas from the Ichthys Field, in the Browse Basin approximately 200 kilometers offshore Western Australia, will undergo preliminary processing offshore to remove water and extract condensate. The gas will then be exported to onshore processing facilities in Darwin via an 889-kilometer subsea pipeline. The Ichthys LNG Project is expected to produce 8.4 million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak.

ABOUT McDERMOTT

McDermott is a leading engineering, procurement, construction and installation group of companies focused on executing complex offshore oil and gas projects worldwide. Providing fully integrated EPCI services for upstream field developments, the Company delivers fixed and floating production facilities, pipelines and subsea systems from concept to commissioning. McDermott’s customers include national and major energy companies. Operating in more than 20 countries across the Atlantic, Middle East and Asia Pacific, our integrated resources include approximately 14,000 employees and a diversified fleet of marine vessels, fabrication facilities and engineering offices. McDermott has served the energy industry since 1923.

To learn more, please visit McDermott’s website on the internet at www.mcdermott.com

FORWARD LOOKING STATEMENTS

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 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, among other things, the expected value, scope, execution, and timing associated with this project. 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 based on various underlying assumptions and are subject to numerous uncertainties and risks, including without limitation, changes in project design or schedules, contract cancellations, change orders and other modifications, and difficulties executing on the project. 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 and other risk factors, please see McDermott's annual report on Form 10-K for the year ended December 31, 2010 and subsequent quarterly reports on Form 10-Q. This news release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.

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Source: McDermott International, Inc.

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