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Zachry Holdings, Inc. (ZHI), the company contracted to build the $10 billion Golden Pass LNG export terminal project for QatarEnergy, the state-owned hydrocarbon giant, and ExxonMobil, the US-based oil and gas entity, has filed for bankruptcy.
The San Antonio-based ZHI stated the company and certain of its subsidiaries have initiated a voluntary court-supervised Chapter 11 process that will allow them resolve issues related to the LNG plant in Texas, which it started working on in 2019.
“As the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the COVID-19 pandemic and, more recently, international geopolitical issues. These unforeseen disruptions have resulted in significant financial strain while meeting targets and keeping the project appropriately staffed,” John B. Zachry, Chairman and CEO of ZHI said.
Zachry said the company was “forced to take action” after failing to “reach a mutually agreeable resolution to these issues.” He added that the bankruptcy proceedings would allow the company to initiate a structured exit from the GPX project.
In a statement to Reuters, Exxon, which owns a 30% stake in the project, said it would review construction timing and provide an update in the future.
In 2022, QatarEnergy Trading, a wholly owned subsidiary of QatarEnergy, had announced it would offtake, transport, and trade 70% of the LNG produced by Golden Pass LNG, which has a total production capacity in excess of 18 million tonnes of LNG per annum, with the first production expected by the end of 2024.
(Reporting by Bindu Rai, editing by Brinda Darasha)
