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Aegion & Materia Collaborate on Pipe Insulation Technology

Aegion Corporation AEGN and Materia, Inc. (Materia) are collaborating to provide pipe coating and the application of an innovative pipe insulation material for use on the Shell Appomattox project located in the Gulf of Mexico. The alliance will provide customers with world-class coating, insulation, logistics and prefabrication solutions.

Shell Offshore, Inc., a wholly owned subsidiary of Royal Dutch Shell plc (Shell), selected Aegion’s subsidiary, The Bayou Companies, LLC (Bayou) for the project. A state-of-the-art insulation coating facility designed for the Appomattox project is currently under construction at Bayou’s New Iberia, LA location, where Bayou will provide anti-corrosion pipe coating and ancillary services.

Per this partnership between Aegion and Materia, the latter will supply its Proxima HTI-1400 subsea insulation system, the newly developed thermosetting cross-linked hydrocarbon polymer system for the project. Materia recently completed the first phase of the required expansion of its Huntsville, TX 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.

Bayou is currently receiving specialized equipment for the insulation application as construction on the new facility continues for completion this summer. It expects to begin insulation application production during the fourth quarter of 2016.

Aegion remains committed to provide high-quality pipeline corrosion protection, flow assurance and other services for pipeline assets in the Gulf Coast region. 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.

In another development, Aegion received a $6.8 million contract from the City of West Palm Beach, FL for its Insituform Technologies, LLC subsidiary. The City of West Palm Beach evaluated dig and replace, sliplining and cured-in-place pipe (CIPP) solutions before selecting Insituform’s CIPP technology as the method to rehabilitate this pipeline.

A flow bypass system will be set up throughout the project in order to minimize disruption to the community as Insituform crews install the InsituMain system. This large-diameter pipeline transfers all wastewater from the Town of Palm Beach and the City of West Palm Beach to the East Regional Wastewater Treatment Plant in West Palm Beach.

Insituform is expected to begin the project in May 2016 with the rehabilitation of approximately 6,000 feet of 48-inch diameter force main sewer pipelines. The project is anticipated to be completed by Sep 1, 2016.

Aegion is pursuing strategic initiatives to grow its presence in the rehabilitation of pressure pipelines, while investing in new tools and processes to expand its capabilities in midstream pipelines. The company is also adding higher margin services to broaden its portfolio of solutions for customers.

Aegion currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the sector include Gibraltar Industries, Inc. ROCK, Headwaters Inc. HW and NCI Building Systems Inc. NCS. All three stocks sport a Zacks Rank #1 (Strong Buy).

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