Oil & Gas

Qatar Energy Company, in collaboration with ExxonMobil, has secured a three-year extension for its Golden Pass LNG terminal project in Texas, a crucial development aimed at addressing the challenges that have delayed its progress. This extension, approved by federal regulators, allows the joint venture additional time to complete the construction of the facility, which is poised to significantly boost liquefied natural gas (LNG) exports from the United States.

The Golden Pass LNG project has encountered significant hurdles, notably due to the bankruptcy of its primary construction contractor, Zachry Holdings, which filed for Chapter 11 protection in May. The bankruptcy was primarily attributed to budget overruns exceeding $2.4 billion, which strained the financial viability of the project. In the wake of this setback, the Washington-based Specialty Energy Platform reported that new negotiations were underway to secure alternative contractors, including discussions with McDermott for potential leadership in the project’s completion.

Located on a former gas import terminal site, the Golden Pass facility is designed to have a total capacity of over 18 million tons per year, making it one of the largest LNG plants in the U.S. Initially set to commence operations in the first half of 2025, the project’s timeline has been disrupted by the recent construction challenges. The extension provides a crucial lifeline to Qatar Energy and ExxonMobil as they work to find solutions and mobilize new contractors to resume work effectively.

The recent settlement between Zachry Holdings and project stakeholders has paved the way for other contractors to step in and manage the construction. This agreement allows Chiyoda International to take over as the main engineering, procurement, and construction (EPC) contractor, ensuring an orderly transition as Zachry exits the project. With Qatar Energy holding a 70% stake and ExxonMobil 30%, the joint venture is now positioned to facilitate the completion of the Golden Pass LNG terminal, thus reinforcing its role in the global energy landscape.