Japan’s engineer Chiyoda has released an update regarding the construction of the Golden Pass LNG export project in Texas, owned by QatarEnergy and ExxonMobil, after US construction company Zachry Holdings filed for bankruptcy.
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.
Chiyoda said in a statement released on Wednesday that Golden Pass LNG Terminal (GPX) 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.
The court will make a final decision regarding Zachry’s withdrawal from the project after hearings, it said.
Discussions about a short-term execution plan and a long-term execution plan of the project among Golden Pass LNG, CB&I, and Chiyoda’s unit CIC have been continuing in preparation for Zachry’s official withdrawal from the project, according to the firm.
Chiyoda said that Golden Pass LNG has already been carrying forward payment procedures for safety-related tasks or infrastructure development tasks required for continuing local construction work as well as other tasks specific to CB&I and CIC.
“No financial burden on such tasks has been imposed on CIC,” the company said.
Chiyoda did not provide further information.
75 percent complete
Golden Pass LNG previously told LNG Prime that work continues on the project with McDermott and Chiyoda, the other two parties to the EPC contract, with thousands of workers on site.
“The project is already 75 percent progressed and we are committed to completing the project,” it said.
Golden Pass LNG said that it does not have updates at this time regarding the construction timeline of the project.
According to a recent report by the US FERC, the anticipated in-service timing for the pipeline expansion project is expected “sometime in the first half of 2025”.
“The lead construction contractor for the export terminal project declared bankruptcy on May 21, 2024, which may impact completion timelines,” it said.
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”.
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.”
LNG Prime previously also contacted Zachry to provide additional info regarding reports that it has laid off more than 4,000 Golden Pass LNG workers following the recent Chapter 11 process, but we did not receive a reply.
According to a list of WARN notices with the Texas Workforce Commission, Zachry Industrial will lay off 4,410 workers.