Golden Pass LNG Terminal LLC has reached an agreement with Chiyoda International Corp and McDermott LLC to amend the engineering, procurement and construction (EPC) terms for the second and third trains of the Texas project owned by QatarEnergy and Exxon Mobil Corp.
Yokohama-based Chiyoda, Houston-based McDermott and San Antonio-based Zachry Holdings Inc (ZHI) won the contract 2019. However, ZHI filed for Chapter 11 bankruptcy last year, leading to a court-approved settlement that allowed ZHI to exit the contract.
The EPC terms for Train 1 had been amended late last year, as announced by Chiyoda November 25, 2024.
Earlier this year Chiyoda and McDermott signed binding terms with Golden Pass for key components of Trains 2 and 3 including payment terms based on the reassessment of the allocation regarding future costs, according to online statements by Chiyoda.
Later the parties agreed on more detailed terms, and the revised EPC contract for Trains 2 and 3 was signed this month, Chiyoda said in a statement this week.
Chiyoda has not disclosed details about the revised contract terms for the three liquefaction trains. Its latest statement said, “We will further examine the details of the revised provisions and impacts on profitability and will make any adjustments for prompt announcement based on disclosure standards for performance forecasts when it becomes possible to calculate profit and loss”.
In 2024 ZHI filed for bankruptcy before the U.S. Bankruptcy Court for the Southern District of Texas to allow it to restructure finances and exit the project. According to the text of the Chapter 11 complaint filed May 21, 2024, ZHI had to shoulder higher costs emanating from demands by Golden Pass to get the project back on track after it had gone beyond schedule and over budget due to “unexpected challenges”.
On July 24, 2024, ZHI said the court had approved a settlement agreement between ZHI and Golden Pass. “The comprehensive settlement agreement fully resolves all financial and legal disputes among the parties”, ZHI said.
“The settlement allows Golden Pass to resume construction on an expedited basis while Zachry will exit the project in an efficient and cooperative manner”.
Golden Pass said in a statement July 29 the approval of the settlement “allows Golden Pass and our construction contractors McDermott and Chiyoda to ramp up site construction activities and progress our LNG terminal”.
On March 5 the U.S. Department of Energy granted Golden Pass’ request to extend the deadline for the start of export operations at Golden Pass LNG by two years to March 2027. Golden Pass cited ZHI’s bankruptcy in seeking more time.
Golden Pass is permitted to export the equivalent of up to 937 billion cubic feet a year of natural gas to FTA and non-FTA countries on a non-additive basis. The DOE issued the authorizations for the non-FTA and FTA exports in April 2017 and September 2017 respectively.
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