ExxonMobil, QatarEnergy urges bankrupt contractor to walk away from Texas’ Golden Pass LNG project

(Bloomberg) – The developers of the Golden Pass LNG export facility that’s under construction in Texas warned of additional costs and delays due to the bankruptcy of contractor Zachry Industrial Inc.

“Construction of a project of this magnitude, capable of employing nearly 10,000 workers, cannot be restarted without additional substantial costs and delays, which only become more significant the longer construction is impeded,” according to an emergency motion filed on June 18 for the US Bankruptcy Court for the Southern District of Texas Houston Division.

Exxon Mobil Corp. and QatarEnergy LNG are joint developers in Golden Pass LNG, which was initially expected to produce its first LNG by early 2025. Exxon Mobil and QatarEnergy didn’t immediately respond to requests for comment.

Golden Pass, in its motion, urged the court to force Zachry — which filed for Chapter 11 proceedings in May and laid off thousands of workers from the Golden Pass site — to walk away from its contract and allow the joint venture to hire replacement workers. According to Golden Pass’s filing, about 140 workers were left in a “skeletal crew” from Zachry, which had reduced its original workforce from 6,000 workers.

Zachry said Wednesday that the company has never quit a job in its history and has never planned to do so at the Texas export project.

“We have always intended to finish the Golden Pass project, and in doing so we expected to receive fair and appropriate compensation in light of unforeseen global events,” the firm said in an emailed statement.