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HOUSTON (Reuters) -The lead contractor building a Texas liquefied natural gas (LNG) plant for QatarEnergy and Exxon Mobil (NYSE:XOM) on Tuesday filed for Chapter 11 bankruptcy protection, citing challenges at the project.
Zachry Holdings, which held the lion's share of the $10 billion construction project called Golden Pass LNG, said it was pursuing a "structured exit." Exxon said it would review construction timing and provide an update in the future.
Golden Pass LNG is being built at the site of a former gas-import terminal that has been converted to process natural gas for LNG exports. It is one of two large U.S. LNG terminals whose startup will significantly expand exports in the next 12 months.
"We, along with the other stakeholders, are considering all available options to implement a smooth transition and minimize any impacts," an Exxon spokesperson said. "We plan to continue to fully support Golden Pass LNG through completion."
Exxon, which owns a 30% stake in the project, earlier this year said it expected first LNG production in the first half of 2025.
"Because we have been unable to find a path forward, we have been forced to take action to protect our business," John Zachry, CEO of the San Antonio, Texas-based company, said in a statement on Tuesday.
Zachry Holdings said it faced cost challenges over a change order and billings schedule, and it engaged in negotiations with Golden Pass LNG for additional funding without success, according to its filing in U.S. Bankruptcy Court for the Southern District of Texas.
Zachry's share of the project was valued at $5.8 billion.
Prior to April 2024, Zachry said it was incurring weekly expenses of $30 million to $40 million for payroll, vendor payments, equipment and other costs, but was receiving approximately $70 million per month from Golden Pass LNG
