Major Golden Pass LNG player files for bankruptcy

Golden Pass LNG under construction. A major contractor on the project has filed for bankruptcy. (Image: ExxonMobil)

Zachry Holdings, the major contractor on the Golden Pass LNG project, said that it and certain of its subsidiaries have initiated a voluntary court-supervised Chapter 11 bankruptcy process.

The move was made to provide time and flexibility to resolve issues related to the Golden Pass LNG export terminal project in Sabine Pass, Texas, the company said. Zachry Holdings holds the lion’s share of the $10 billion construction project.

“This action is intended to strengthen the company’s overall financial position as it continues to serve its customers across the energy, chemicals, power, manufacturing, and industrial industries,” the company said in a news release. “Work at all remaining jobsites is continuing without interruption, and ZHI remains committed to delivering outstanding execution while upholding the highest standards of safety and quality.”

John B. Zachry, Chairman and CEO of ZHI said, “We have built a strong business over the last 100 years by providing our customers the highest quality turnkey engineering, construction, maintenance, turnaround, and fabrication services. Since beginning work on the Golden Pass LNG project in 2019, we have maintained our usual high standards of excellence and gone above and beyond to accommodate the schedule and demands of GPX and its shareholders, QatarEnergy and ExxonMobil. 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.

He continued, “We have been transparent with GPX and its shareholders as we have attempted to reach a mutually agreeable resolution to these issues. Because we have been unable to find a path forward, we have been forced to take action to protect our business. The process we are starting today provides us mechanisms to initiate a structured exit from the GPX project. It also enables us to take certain actions that will improve our performance and better position our business for the future.”

Mr. Zachry concluded, “All other projects and company efforts continue to perform in line with expectations, and we will continue serving our customers while maintaining our commitment to quality and safety as we move through this process. We thank our customers, vendors, partners, and community stakeholders for their continued support. We are also grateful to our employees for the excellent work they perform on a daily basis and for how they represent our company.”