51 9 9 9 A N N U A L R E P O R T

Natural gas is the fastest-growing segment of the energy industry. Liquefied natural gas (LNG) is natural gas that has been cooled

to -260˚F into a liquid state, reducing its volume by about 600 times. As LNG, natural gas can be transported by trucks or special

ships over distances uneconomical for pipelines. Hydrocarbon producers have found that LNG is an economical means of monetizing

their large reserves of “stranded” gas that otherwise cannot be brought to market. LNG also enables local distributors to economi-

cally meet winter heating peaks (“peak shaving”).

CB&I has been a pioneer in the LNG industry since its beginning in the late 1950s, participating in early cryogenic materials

research, building the world’s first peak shaving plant in 1965 and developing proprietary liquefaction technology. Today, CB&I has

the proven capability to design, engineer, construct, commission and start up turnkey LNG storage facilities, import terminals and

peak shaving plants. An example is the peak shaving facility pictured, located in the southeastern United States, with a storage

capacity of up to 4 billion standard cubic feet of natural gas. Opportunities for LNG tanks and systems are expected to surge in the

next several years as natural gas becomes the fuel of choice for new power plants, and CB&I is targeting and pursuing projects that

match the company’s unique competencies.

4 C H I C A G O B R I D G E & I R O N C O M P A N Y N . V .

S T R A T E G Y :

Capture a major share of the LNG market

by building on established global capabilities and

continuing to provide turnkey solutions for clients

CAPITALIZEO N I N D U S T R Y T R E N D S

Nevertheless, there remain areas in the world where the company

is not currently active, and CB&I began a major push in 1998 to

expand its presence into new geographies—such as sub-Saharan

Africa, India and the former Soviet republics—and in difficult loca-

tions—such as Algeria and Nigeria. The effort has paid off, with about

$200 million of 1999 new business taken coming from these regions.

Examples include an LNG expansion project in Nigeria, a crude export

terminal in Russia, an LNG tank in India and fuel storage in Equatorial

Guinea. CB&I will continue to seek opportunities to bring value to

customers throughout the world.

S T R A T E G Y :

Execute an effective marketing process

with a focus on customer solutions, major opportunities,

emerging countries, difficult geographies and

expanded services for significant profitable growth

CB&I truly is a global company, and for more than 110 years

its people have worked in some of the most challenging

areas of the world. This unique ability to mobilize crews,

supervision, equipment and material to remote and diffi-

cult locations is a key strength that differentiates CB&I

from its competitors.

I N T O N E W G E O G R A P H I E S

SAFEGUARD

INNOVATE

EXPAND

91 9 9 9 A N N U A L R E P O R T

CB&I’s acquisition strategy is based on acquiring businesses that will help us provide a more complete package of services to our

customers, extending our competencies and strengthening our ability to meet customer needs. XL Technology Systems, a CB&I sub-

sidiary acquired in 1999, designs, manufactures and installs thermal vacuum test chambers and systems, and related components

and subassemblies. These systems are used for the non-destructive, pre-flight testing of satellites and other space-borne hardware.

XL also designs and supplies specialty vacuum coating and process systems for a wide variety of applications, such as the plasma

treatment of medical industry labware.

Founded in 1995 by a group of highly experienced vacuum/thermal process engineers and technicians, XL is a leader in its field

and has developed many technological advances, including higher efficiency vacuum chamber thermal shrouds, variable density

gaseous nitrogen thermal units and fast-response thermal cycling chambers. Combined with CB&I’s existing experience base in field-

erected vacuum chambers, XL will be able to provide turnkey design and construction services for environmental test facilities in the

rapidly growing aerospace industry, as well as custom vacuum systems for the communications, coating and medical industries.

8 C H I C A G O B R I D G E & I R O N C O M P A N Y N . V .

S T R A T E G Y :

Create step-change growth in sustainable revenue,

profitability and shareholder value from acquisitions

and other business opportunities

STRUCTUREA C Q U I S I T I O N S & A L L I A N C E S

C O N S T R U C T I O N M E T H O D S

S T R A T E G Y :

Build excellence in project execution by pioneering

new construction methods and introducing product

improvements while continuing to lead the industry

in safety and environmental compliance

CB&I’s legacy of innovation in engineering technology and

construction know-how enables us to design and build

structures that meet or exceed customer needs for service-

ability, quality and reliability in a safe and efficient man-

ner. CB&I field crews are acknowledged as among the best

in the construction industry, and continual refinements in

construction technology help them reach higher levels of productivity.

The people in CB&I’s Corporate Construction Technology group in

Houston, Texas, find solutions to construction challenges for company

field crews around the world and develop new construction processes

that improve productivity and safety. Experts in rigging, heavy lifting

and other construction disciplines produce procedure manuals to ensure

that consistent, repeatable and reliable construction methodology

is used worldwide. Recent technological developments include the

CoilBuild® process for tank erection from coil rather than plate steel,

and the “scaffoldless tank erection method” that eliminates a safety

hazard and speeds erection in certain flat bottom tank applications.

SAFEGUARD

INNOVATE

EXPAND

ADVANCEI N T O N E W M A R K E T S

12 C H I C A G O B R I D G E & I R O N C O M P A N Y N . V . 131 9 9 9 A N N U A L R E P O R T

Acquisitions are one path to revenue growth; the development of new business opportunities from within the organization is another.

Such is the case with UltraPure Systems, CB&I’s entrée into the high purity piping market for customers in the microelectronics, phar-

maceutical, and food and beverage industries. UltraPure addresses a market niche that will benefit from CB&I’s proven expertise in

project management and worldwide mobilization capabilities. Utilizing the vast resources within the company and with the addition

of veterans from the high purity piping industry, UltraPure has the resources to meet today’s demands for turnkey fast-track projects,

operational flexibility and environmental compatibility.

Manufacturing plants in these high-tech industries must be equipped with ultraclean piping systems for the transport of high

purity water, acids, gases, chemicals and other liquids. UltraPure has established an office and Class 100 cleanroom manufacturing

facility in the United States, and is in the process of setting up similar facilities in Puerto Rico and Singapore. The successful

global construction history of CB&I combined with the experience of the UltraPure Systems team will allow the company to provide

unmatched services to targeted high-tech industries.

S T R A T E G Y :

Create step-change growth in sustainable revenue,

profitability and shareholder value from

acquisitions and other business opportunities

S T R A T E G Y :

Continue to improve our safe work practices

with a goal of zero injuries to our employees and

subcontractors, and help protect the environment

through innovative design

From the day they join Chicago Bridge & Iron, new employ-

ees are taught four key elements of the company’s safety

philosophy: (1) working safely protects their life and well-

being; (2) working safely protects the life and well-being of

their co-workers; (3) working safely is one element that

assures a quality product for our customers; and (4) our

safety record is an important factor in determining whether the com-

pany is awarded future contracts. CB&I is committed to a goal of zero

injuries and believes ongoing training in safe work behavior—for both

new and veteran employees—is crucial to achieving this goal.

CB&I also is committed to strict compliance with environmental rules

and regulations at its fabrication facilities and project sites around the

world. The company introduced the first floating roof tank to the

petroleum industry in 1923, vastly improving safety and reducing

emissions of volatile airborne compounds. CB&I continues to lead the

industry in the development of emission control technology that enhances

the environmental performance of flat bottom storage tanks.

E M P L O Y E E S & E N V I R O N M E N T

SAFEGUARD

INNOVATE

EXPAND