Amendment No. 3 to Credit Agreement

Exhibit 10.38

AMENDMENT NO. 3

          AMENDMENT NO. 3 dated as of June 20, 2006 among The Shaw Group Inc. (the “Borrower”), the subsidiaries of the Borrower listed on the signature pages hereto as “Guarantors” and BNP Paribas, as administrative agent (in such capacity, the “Agent”) pursuant to authority granted by the Required Lenders.

          The Borrower, the “Guarantors” party thereto, the “Lenders” party thereto and the Agent are parties to a Credit Agreement dated as of April 25, 2005 (as modified and supplemented and in effect from time to time, the “Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit (by means of loans and letters of credit) to be made by said lenders to the Borrower in an aggregate principal or face amount not exceeding $750,000,000.

          The parties hereto wish to amend the Credit Agreement as hereinafter set forth and accordingly hereby agree as follows:

          Section 1. Definitions. Terms defined in the Credit Agreement are used herein as defined therein.

          Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 5 below, but effective as of the date hereof, the last sentence of Section 2.19.1 of the Credit Agreement shall be amended to read as follows:

“No Facility LC issued on or after the Effective Date shall have an expiry date later than the fifth Business Day prior to the Facility Termination Date.”

          Section 3. Representations and Warranties. The Borrower represents and warrants to the Lenders that the representations and warranties set forth in Article V of the Credit Agreement are true and correct on the date hereof as if made on and as of the date hereof (except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date) and as if each reference in said Article V to “this Agreement” included reference to this Amendment No. 3.

          Section 4. Previously Issued Facility LCs. The letters of credit listed on Schedule 1 hereto shall be deemed to be Facility LCs duly issued under the Credit Agreement provided that the terms and conditions thereof comply with the requirements of the Credit Agreement as hereby amended.

          Section 5. Conditions Precedent. The amendment set forth in Section 2 hereof and the consent set forth in Section 4 hereof shall become effective, as of the date hereof, upon the execution and delivery of counterparts of this Amendment No. 3 by the Borrower, the Guarantors and the Agent pursuant to authority granted by the Required Lenders.

          Section 6. Miscellaneous. Except as herein provided, the Credit Agreement and the Security Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York.

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered as of the day and year first above written.