Golden Pass LNG work continues despite EPC contractor Zachry’s bankruptcy

Golden Pass LNG is continuing work on its 18-million/tonne year (tpy) liquefaction project with McDermott International Ltd. and Chiyoda International Corp., the remaining parties to its engineering, procurement, and construction (EPC) contract, following a Chapter 11 bankruptcy filing by Zachry Industrial Inc. Golden Pass said the project is 75% progressed and that it remains “committed” to its completion.

Zachry said in addressing the filing that “as the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the COVID-19 pandemic and, more recently, international geopolitical issues. These unforeseen disruptions have resulted in significant financial strain while meeting targets and keeping the project appropriately staffed.”

The contractor is seeking a “structured exit” from its work on Golden Pass. It also said that all of its other projects continue to perform in line with expectations and that it would continue serving its customers—which include Venture Global Inc. for its 20-million tpy Plaquemine’s LNG plant—through the bankruptcy process.

Zachry has filed a separate suit against Golden Pass owners ExxonMobil Corp. and QatarEnergy to recover outlays of more than $1 billion it says it had to make to keep the project on track. “By mid-2022, over $2.4 billion in additional funding was needed to complete the project on the schedule Golden Pass wanted,” the Zachry suit states. “The cost was extraordinary, but so was the payday ExxonMobil and QatarEnergy would receive once the facility was complete.”