KBR Announces Valero's Successful MTBE to Iso-octene Conversion Project

Houston, Texas - April 3, 2008 - KBR (NYSE:KBR) today announced the completion of a methyl tertiary butyl ether (MTBE) to Iso-octene conversion project at Valero's Corpus Christi, Texas refinery.

The conversion project is based on the NExOCTANE^TM process, developed by Neste Oil Corporation of Finland and licensed exclusively in the Americas through KBR. The process selectively converts isobutylene to iso-octene or optionally iso-octane, which are high octane, high quality gasoline blendstocks that also offer benefits in addressing challenges with ethanol blending. The process is especially attractive for refiners wishing to discontinue MTBE production since much of the MTBE unit can be utilized in the conversion to a NExOCTANE plant. The Energy Policy Act of 2005 eliminated the use of MTBE in US gasoline making the conversion a priority for Valero.

"This project represents the fourth application of the NExOCTANE technology and further demonstrates KBR's capabilities in the petrochemicals and refining technology markets," said Tim Challand, President of KBR's Technology Business Unit. "Our partnership with Neste Oil provides KBR the opportunity to offer the NExOCTANE technology among its slate of third party technology offerings to complement our own suite of technologies."

KBR is a global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors. The company offers a wide range of services through its Downstream, Government and Infrastructure, Services, Technology, Upstream and Ventures business segments. For more information, visit www.kbr.com.

CONTACT:
KBR, Houston
Director, Communications
Heather Browne, 713-753-3775
heather.browne@kbr.com
or
Director, Investor Relations
Rob Kukla, Jr., 713-753-5082
investors@kbr.com