Japan's Chiyoda and US-based McDermott have revised and signed the engineering, procurement, and construction (EPC) contract for Trains 2 and 3 at the $10 billion Golden Pass LNG project in the United States. This action follows the derailment of the project after the original EPC consortium lead contractor, Zachry, filed for bankruptcy, leaving Chiyoda and McDermott as the two remaining contractors.

Project Background and Partnership

The Golden Pass LNG project is a 15 million tonnes per annum joint venture between state-owned QatarEnergy and US supermajor ExxonMobil. The project's progress was disrupted by the bankruptcy of the lead consortium member, Zachry. In response, the two remaining contractors, Chiyoda and McDermott, have now formalized their partnership to complete the work.

Contract Revision and Terms

In June, Chiyoda, McDermott, and Golden Pass LNG signed binding terms that addressed key components for completing Trains 2 and 3. These terms included revised payment structures based on a reassessment of the allocation of responsibilities for future cost burdens. A more detailed agreement was subsequently reached, and the revised EPC contract was officially signed on 13 November.

Financial Provisions and Impact

Chiyoda has already recorded a provision for the estimated costs to complete the project in its financial results for the fiscal year ended March 2024. The company stated it will continue to examine the details of the revised provisions and their impacts on profitability. It plans to make adjustments and announcements regarding performance forecasts as soon as it is possible to calculate the profit and loss implications.

Commitment to Project Completion

Chiyoda committed to leveraging its problem-solving capabilities and project management skills, working in close collaboration with Golden Pass LNG and McDermott to ensure the successful completion of the project. It was also noted that the amended EPC contract for Golden Pass LNG Train 1 was closed in November 2024. The financial terms and other specific details of the revised EPC contracts have not been disclosed.