QatarEnergy and ExxonMobil will ramp up construction activities at the Golden Pass LNG export terminal in Texas after a bankruptcy court approved a settlement agreement with Zachry Holdings.
State-owned QatarEnergy owns a 70 percent stake in the three-train Golden Pass LNG project with a capacity of more than 18 mtpa and will offtake 70 percent of the capacity, while US energy firm ExxonMobil has a 30 percent share.
A joint venture of Chiyoda, McDermott’s CB&I, and Zachry won the contract to build the tree Golden Pass trains worth more than $10 billion next to the existing LNG import terminal.
However, Zachry said on May 21 it has filed for bankruptcy, initiating a structured exit from the Golden Pass LNG export project due to “financial challenges” related to the construction of the facility.
Japan’s Chiyoda said in a statement that Golden Pass LNG has filed motions on June 18 requesting Zachry’s withdrawal from the project and for lifting the automatic stay to resume construction work of the first train.
Dispute resolved
Zachry Holdings said on Wednesday in a statement that that the U.S. Bankruptcy Court for the Southern District of Texas has approved its settlement agreement with Golden Pass and joint venture partners CB&I and Chiyoda International.
“The comprehensive settlement agreement fully resolves all financial and legal disputes among the parties related to the Golden Pass export terminal project in Sabine Pass, Texas,” it said.
Also, the settlement allows Golden Pass to resume construction on an “expedited basis” while Zachry will exit the project in an “efficient and cooperative manner”, the company said.
The settlement, which has been approved by the court on an interim basis, creates a path for ZHI to complete its court-supervised restructuring process on an “expedited basis”, it added.
Golden Pass “focused on getting people back to work”
Golden Pass told LNG Prime in an emailed statement the company “acknowledges the court’s approval of the interim order associated with Zachry Holdings, Inc.’s motion in bankruptcy court.”
“This allows Golden Pass and our construction contractors McDermott and Chiyoda to ramp up site construction activities and progress our LNG terminal,” the company said
“Going forward, we are focused on getting people back to work, including local workers and vendors, and progressing this critical energy project. We are committed to a safe and successful completion of this world class facility,” the company said.
Golden Pass did not say when it expects to launch LNG production and complete the terminal.
The JV recently said that the project is 75 percent complete.
Golden Pass recently sought approval from the FERC to increase the peak workforce to speed up the construction of the pipeline project.
According to a recent report by the FERC, the anticipated in-service timing for the pipeline expansion project is expected “sometime in the first half of 2025”.
The regulator said in a previous report that the anticipated in-service timing for the pipeline expansion project “is expected sometime prior to the second half of 2024”.
However, the FERC did not provide the timing for the liquefaction trains in the newest report.
ExxonMobil previously said that “train 1 mechanical completion is expected at the end of 2024 with first LNG in first half of 2025.”