This story requires a subscription
This includes a single user license.
On Friday, the Queensland Supreme Court ruled in favour of Santos in proceedings brought by the company against Fluor Australia, according to a statement by Santos.
Santos said the court affirmed that Fluor must pay approximately A$692 million to Santos and its co-venturers, with further sums yet to be determined.
The proceedings arose under an engineering and construction contract that Santos entered into with Fluor in 2011 for the development of production facilities that formed part of the Gladstone LNG project. Construction took place between 2011 and 2014.
Santos argued that Fluor was not entitled to all the costs it had claimed and received payment for under the contract.
“Santos sought to recover those amounts and also made claims to recover liquidated damages associated with the late completion of the project. Further, Santos sought to enforce against a parent company guarantee from Fluor Corporation,” the company said.
The Queensland Supreme Court referred Santos’ claims to three referees who provided their final report on July 14, 2023. In the referees’ opinion Santos was entitled to recover certain costs, Santos said-
“The court has upheld the majority of the referees’ findings, affirming that Fluor must pay at least A$692 million to Santos and its co-venturers, with further sums owing, and the final amount ordered in Santos’ favour (with interest plus legal costs) to be determined in the coming weeks,” Santos said.
The Santos-operated 7.8 mtpa GLNG plant is located on Curtis Island near Gladstone.
GLNG is a joint venture of Santos, Malaysia’s Petronas, France’s TotalEnergies, and Kogas.
Fluor statement
Texas-based Fluor released a statement regarding the ruling later on Monday.
“Although a final judgment is not expected until later this year, Fluor acknowledges the August 8, 2025, decision in favor of Santos by the Supreme Court of Queensland regarding a legal dispute over the Gladstone LNG project in Queensland, Australia,” the company said.
Fluor said the court generally accepted the recommendations of a panel of referees that the court appointed to oversee the case despite Fluor’s objection.
Further arguments and input from both parties will be heard by the court before a final judgment is delivered sometime later this year.
“Fluor maintains the contracting principles addressed by the court have wide-sweeping consequences in the engineering and construction industry,” it said.
“The company is reviewing the court decision and exploring its response including the timing of its appeal. We are also working with our insurance carriers to address the obligations arising from the final judgment,” Fluor said.
XRG extension
Santos also provided an update in a separate statement on the proposal from the XRG consortium, which includes Abu Dhabi Development Holding Company (ADQ) and US-based investment firm Carlyle.
In June, Santos received a non-binding indicative proposal from the XRG consortium.
The proposal is for the acquisition of all of the ordinary shares on issue in Santos for a cash offer price of $5.76 per Santos share via a scheme of arrangement.
Santos announced in a statement on June 27 that it entered into a process and exclusivity deed with the consortium.
According to the statement on Monday, the XRG consortium has now substantially completed due diligence in relation to the potential transaction.
The consortium has confirmed it “has not discovered anything to date that would cause it to withdraw its proposal and has confirmed its commitment to working constructively with Santos to complete the due diligence promptly and agree on a binding transaction.”
To complete due diligence and progress a binding transaction, the XRG consortium has requested a two-week extension to the due diligence and exclusivity period under the process deed.
Santos has consented to the extension until August 22 to enable the XRG consortium to finalise due diligence and progress a scheme implementation agreement (SIA), the company said.
The Australian firm noted that there is no certainty that the XRG consortium will enter into a binding SIA on terms acceptable to Santos or that the potential transaction will proceed.
(This article was updated with a Fluor statement.)