Zachry Out as Lead Contractor for Texas LNG Project in Settlement with Exxon, Qatar Energy
(Reuters) — A bankruptcy court approved a Zachry Holdings and Golden Pass LNG settlement on Wednesday that will allow Exxon Mobil and Qatar Energy, the Golden Pass owners, to hire a new lead contractor to complete its LNG plant.
The order would speed construction of the 15 million metric ton per annum (MTPA) LNG plant by releasing Zachry as lead contractor on project. Chiyoda International Corp. will replace Zachry as the new lead engineering, procurement and construction contractor.
The project, at the Sabine Pass site of a former gas-import terminal that was converted to process natural gas for LNG exports, is one of two large U.S. LNG facilities whose startups were expected to significantly expand supplies from the world's top exporter of the superchilled fuel in the next 12 months.
Failure to approve the order could have left thousands unemployed and negatively impacted one of the largest global construction projects, Judge Marvin Isgur said in the bankruptcy court of the Southern District of Texas in Houston.
"I find that the proposed settlement is clear and convincing evidence... (and) is a compromise that should be approved," Isgur said in his ruling.
The order allows Golden Pass and its construction contractors McDermott and Chiyoda to ramp up site construction activities and progress its LNG terminal, Golden pass said in a statement.
"Going forward, we are focused on getting people back to work, including local workers and vendors, and progressing this critical energy project," Golden Pass added.
Under the order, Zachry Holdings will immediately give up control of the LNG project and cannot direct vendors or workers on what to do, court documents show.
Zachry last Friday filed an emergency motion with the bankruptcy court asking it to approve the settlement with Golden Pass LNG, which would allow it to emerge from bankruptcy.
Judge Isgur said he was happy the parties came to a settlement because there was a real risk to the survival of Zachry given the size of the claims.
"The settlement resolves all of the issues we set out to address regarding the Golden Pass LNG project when we initiated our restructuring," said John Zachry, chairman and CEO of Zachry Holdings.
In filing for Chapter 11 bankruptcy protection in May, Zachry said the Golden Pass project, known as GPX, was at least $2.4 billion over the original budget.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- U.S. Appeals Court Blocks Kinder Morgan’s Tennessee Pipeline Permits
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Marathon Oil to Lay Off Over 500 Texas Workers Ahead of ConocoPhillips Merger
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- Another Major U.S. Oil Refinery Shutting Down as Lyondell Confirms Houston Closure
- Chevron CEO Wirth Under Fire as Hess Deal Delay Drags Down Stock Performance
Comments