Zachry Holdings Inc., the construction powerhouse responsible for the Golden Pass liquefied natural gas (LNG) plant, has filed for bankruptcy protection in a startling development. This move comes amid a heated dispute over escalating costs and alleged corporate maneuvers that have jeopardized thousands of jobs and a critical project.
Situated in Sabine Pass, Texas, the Golden Pass LNG project was a joint venture between QatarEnergy and ExxonMobil, designed to capitalize on the global LNG demand surge. Originally slated at $9.25 billion when Zachry took on the project in 2019, costs skyrocketed to $11.6 billion by August 2022—a 25% increase fueled by post-COVID-19 challenges.
The saga began with Zachry repeatedly cautioning Exxon Mobil about rising costs, backed by over a hundred discussions where assurances were supposedly given that all expenses would be covered. However, Zachry alleges it uncovered a covert attempt to sideline them from Golden Pass after they footed additional costs.
In a bold legal maneuver detailed in recent court filings, Zachry demands transparency from ExxonMobil, QatarEnergy, and contractors Chiyoda and CB&I. They seek extensive documentation and financial disclosures related to the project, citing potential fraud concerns and emphasizing their pivotal role as lead contractors.
At the heart of Zachry’s grievances lies the claim that despite informing Golden Pass of cost increases nearing $11 billion in late 2021, their requests for fair adjustments through change orders were delayed. They assert that while pressured to maintain an accelerated schedule, critical decisions were made without their input, leading to a breakdown in trust and a dire financial situation.
ExxonMobil, holding a 30% stake in Golden Pass alongside QatarEnergy’s 70%, has yet to respond publicly to Zachry’s allegations. Despite reaching nearly 75% completion amidst the turmoil, the project serves as a stark reminder of the risks and complexities inherent in large-scale infrastructure projects.
As Zachry navigates bankruptcy proceedings, its focus remains steadfast: holding those it deems responsible accountable and ensuring a path forward that upholds commitments to workers and stakeholders alike. Originally envisioned as a cornerstone of American energy independence and global trade, the Golden Pass LNG project is now entangled in a high-stakes showdown where financial realities clash with corporate assurances.
