The lead contractor building a Texas liquefied natural gas (LNG) plant for QatarEnergy (QATPE.UL) and Exxon Mobil (XOM.N) on Tuesday filed for Chapter 11 bankruptcy protection, citing challenges at the project.
Zachry Holdings (ZHII.UL), 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 a former gas-import terminal that has converted to process natural gas for LNG exports. It was scheduled to start production of the superchilled gas during the first half of 2025.
"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, said earlier this year that 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.
Golden Pass LNG had warned earlier this month of possible impacts on construction of the first three trains of the project, which was designed to produce up to 18 million metric tons per annum of LNG. The project is one of two large LNG export plants that had been expected to expand U.S. exports in the next 12 months.
The United States is the largest exporter of LNG.
Zachry's share of the project was valued at $5.8 billion.
