Pennecon Limited

New State-of-the-Art Hydraulics Facility for Pennecon

St. John’s, June 19, 2007 – Pennecon Limited is boasting a new state-of-the art hydraulic services shop, the largest of its kind in Newfoundland and Labrador. The new 11,500 square foot facility sits on two acres of land in Octagon Pond, Paradise. It will be officially opened tomorrow by Don Noseworthy, Vice President of Pennecon’s Energy Division, and Paul Stanley, President of Hydraulic Systems Limited (HSL), a Pennecon subsidiary, to coincide with the annual NOIA oil and gas conference underway in St. John’s.

The HSL facility was designed to meet customer needs more effectively in this province, and has a 25,000 square foot laydown area to complement the facility itself. Its high pressure test bay, parts storage, significant crane capacity, floor treatment and environmental drainage elements unique to the hydraulic business, and doors for heavy equipment entry all make the building unique in this market.

HSL is a major equipment distributor in the hydraulic industry and carries the largest inventory of hydraulic products in Atlantic Canada. Hydraulic equipment is used in hundreds of industries from oil and gas to aerospace, steel mills to food processing plants.

The new facility will provide many services including: installation and servicing of fluid power equipment, pressure testing, on-site chemical treatment and inspections.

HSL has a long history in the Atlantic region, having been established for nearly four decades on the mainland. Its presence in Newfoundland and Labrador spans 10 years. According to Stanley, it was time to upgrade to improved facilities.

“We invested in the new HSL building so that we would be able to provide better service to our clients,” said Stanley. “It’s that simple. We now have more facility space, improved equipment and ideal specifications to enhance our quality of performance and exceed our clients’ expectations whenever possible.”

The new facility is also indicative of the parent company’s growth agenda. “Pennecon Limited has expanded tremendously since its establishment in the 1970s,” said Noseworthy. “Though our early construction sector interests continue to be a mainstay of our business, Pennecon’s Energy Division has positioned itself as a leading force on the east coast of Canada, with growing interest on the west coast. Our experience and commitment in the hydraulics field in particular is top notch, hence our investment in the new facility in Paradise.”

HSL represents a number of the world’s major hydraulics distributors, including Parker Hydraulics, Danfoss, Stauff, Pullmaster winches, Effer Marine Cranes and CC Jensen. Its technicians are experienced in handling “turnkey” projects in offshore, petro-chemical, marine and forestry markets, incorporating centralized hydraulic power systems, hydrostatic drives, deck machinery, pneumatic and mechanical systems, filtration systems, piping installations and integrated control systems.

Pennecon Limited is a very diverse organization and is also a member of the Penney Group which comprises over 60 companies and employs more than 3,000 people. Founded in the 1970s with a focus on the construction sector, Pennecon’s commitment to customer service has allowed it to diversify over the years. The $200 million company is headquartered in Newfoundland and Labrador and has operations and projects throughout the world.

Today Pennecon has over 30 companies, one of which is Hydraulic Systems Limited, operating under its four divisions (heavy civil, energy, concrete and real estate) and employs 1200 staff. It is one of the largest companies in Atlantic Canada and most diversified in skilled trades in Canada.

The new HSL facility was built by Capital Precast, also a Pennecon subsidiary, with concrete tilt-up panels. It previously operated from Sudbury Street in St. John’s. Local HSL managers include Eddy Knox, VP, Offshore Services, Don Murphy, Operations Manager and Steve Mercer, Service Manager.

BACKGROUNDER

HYDRAULIC SYSTEMS LIMITED (HSL)

General Information

Established for Thirty-Five (35) years in the Atlantic Provinces (Dartmouth) and for ten (10) years in Newfoundland and Labrador.

Major Hydraulic Equipment distributor; Hydraulic Systems Limited carries the largest inventory of Hydraulic Products in Atlantic Canada.

HSL represents:

Parker Hydraulics for whom they are a Hydraulic Technology Center for Newfoundland and Labrador and for Nova Scotia.
Parker Process filtration; hydraulic, air, gas, water and production fluid filtration.
Danfoss; fluid control products, controls and refrigeration products.
Stauff; test equipment, valves, clamps and supports, hydraulic accessories and filtration.
Pullmaster winches.
Racor diesel, gas aviation fuel fitration and water separation products.
Lantec winches.
C C Jensen; hydraulic and lubrication off-line filtration and water separation products.
Bifold Fluidpower hazardous area pneumatic and hydraulic control valves and systems.
Dynex severe duty hydraulic pumps.
Marshalsea hydraulics hazardous area control valve and water glycol and water, high-pressure pumps.
Atos directional control valves.
Effer Marine Cranes.
KYB rotary piston motors.

HSL is experienced in handling “turnkey “ projects in offshore, petro-chemical, marine and forestry markets, incorporating centralized hydraulic power systems, hydrostatic drives, deck machinery, pneumatic and mechanical systems, filtration systems, piping installations and integrated control systems.

They provide integrated pipework conditioning services comprising, chemical cleaning, retro-jetting, line pigging, pressure testing, hot oil flushing and onsite certification for piping systems.

HSL is the Atlantic Canadian representative for Hydratight and all HSL technician staff are fully certified Hydratight bolting technicians (www.hydratight.com)

They provide the complete range of DL Ricci on-site /I—place machining services without hotwork from their Paradise base with trained technicians available from Paradise or Dartmouth base locations (www.dlricci.com)

HSL provides the full range of Boyle Energy specialist pre-commissioning services through its Paradise base. This includes the specialist workscopes such as high pressure steam blows, vapour phaze cleaning, froth flushing, chemical cleaning (www.boyleenergy.com)

HSL provides hydraulic engineering, commissioning and maintenance services for clients.

Paradise Location

11,500 Sq Ft facilities.
3,500 Sq Ft offices.
25,000 Sq Ft laydown area.
Large drive through bay, 16 ft x 16 ft overhead doors.
Full oil interceptor system to ensure no possibility of oil contamination to water system.
200 HP hydraulic test bed, capability as below:
200 HP diesel drive closed loop transmission drive.
30 HP electric drive open loop drive.
Webster data logging capability for testing. (Upgrade to computer logging capability in 2007).
Pressure test capability to 60,000 psi in house.
Pressure test bay within workshop for all testing activities. This test bay ensures safety of all workshop personnel during pressure test activities.
Fluid certification to NAS, ISO, BS and MIL standards. This certification is completed in our in-house laboratory.
Flushing capability up to 6” line size. In-house permanent flushing units as below:
75HP 400gpm flushing rig (oil based).
25 HP, 100 gpm flushing rig (oil based).
25 HP, 20 gpm flushing rig (Castrol Transaqua HT, high pressure).
3 x re-circulation systems for fluid pre-cleaning, 2 x oil based, 1 x Castrol Transaqua HT).
12 ft stroke x 24 in diameter cylinder hone.
Full hydraulic cylinder bench.
10-ton overhead crane.
Power tube and pipe bender to 3” pipe capacity.

Quality Assurance

ISO 9001:2000 quality system currently in place for Dartmouth, Paradise and for site services.

Joint Venture Partnership

For twelve years Hydraulic Systems Limited has had a joint venture partnership with Norson Services Limited from Aberdeen, Scotland. This partnership enables HSL to draw upon the resources of Norson Services for Site personnel, equipment and, if required, project management services. This Joint Venture has worked successfully on multiple project workscopes during the twelve-year association, the most recent being the 2006 turnaround scope of work for Terra Nova project.