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    UPDATE 1-U.S. says GE jet engine failure a contained incident

    * NTSB says investigation into GEnx engine failure continues

    * Incident occurred during testing of Boeing 787 Dreamliner

    * GE says not aware of any risk to other GEnx engines

    Aug 8 (Reuters) - The U.S. National Transportation Safety

    Board said on Wednesday that the failure of a General Electric

    Co jet engine on a Boeing Co 787 Dreamliner last

    month was a contained incident of the sort that does not

    normally pose an immediate safety risk.

    The NTSB said that a shaft in the GEnx engine fractured,

    leading to the incident in Charleston, South Carolina, in which

    debris fell from the engine and sparked a grass fire near the

    runway. The jet in question was being tested before Boeing

    shipped it to a customer.

    "A contained engine failure is a specific engine design

    feature in which components might separate inside the engine but

    either remain within the engine's cases or exit the engine

    through the tail pipe," the NTSB said in a statement. "This

    design feature generally does not pose immediate safety risks."

    The agency said it will continue to investigate the engine

    failure, including a metallurgical analysis of the properties of

    the shaft that failed.

    GE spokesman Rick Kennedy said the roughly 80 GEnx engines

    installed on aircraft around the world remain in use.

    "We're not aware of any issue that would hazard the safe

    flight of aircraft powered by these engines," Kennedy said.

    "We're continuing to ship engines to Boeing."

    He noted that of 25,000 engines wholly or partly made by GE

    that are in use, there have been six failures of shafts over the

    past decade.

    Boeing spokesman Doug Alder said the company was "working

    very closely with investigators and GE," but declined further

    comment.

    GE's jet engine business competes with United Technologies

    Corp and Rolls-Royce Holdings PLC