Fluor Corp. It plans to appeal to the ruling of an Australian court, which requires that he pay about $ 450 million to the Santos Ltd oil and gas developer. and members, derived from a long -term payment dispute related to the construction of the Gladstone GNL project in Queensland, which began operating in 2015.
The decision of August 8 of the Supreme Court of Queensland, announced by Santos on August 11, supports the claim of the Sob -porch promoter as a contractor of the EPC project between 2011 and 2014, “with later sums yet to be determined,” said the developer.
Fluor was appointed EPC contractor at the estimated installation of 7.8 million tonnes per year, which extracts and liquefies the natural gas of coal seams for export to Asia and other markets, as he said in his 2010 results was a award of $ 3.5 million. The contractor also won the previous project design contracts and early works. Santos estimated the final cost of Gladstone at $ 18.5 billion in 2014, about 32% of his initial estimate, promoted by the need for the increase in supply and labor, among other issues of the project, said a 2023 study of the Australian Center for Corporate Responsibility.
In an ongoing dispute since 2016, Santos said that Fluor had no right to all the expenses he claimed and that he was paid by virtue of the contract. The developer also sought to recover payments and gain liquidated damage to the completion of the project. The fluorine contract began under a fixed price approach, but it became refundable costs during construction, “not strange” in such complex projects, said Andrew Wittmann, a lead analyst at Baird Equity Research in a search note on August 10 on liquidation. Said that Gladstone has been “operating effectively ”since its completion.
The complexity of the case pushed the court to use the “non -binding referees to order contracts and millions of documentation pages presented,” said Wittmann. The court accepted most of its findings against fluorine, exposed in a final report of 2023 to the court, including the previous payments. A final decision on the amount of the liquidation, which will include the interest and legal expenses, will be issued later this year, waiting for “other arguments and contributions of the two parties” to the court, said Fluor.
In an announcement, Fluor said that he “acknowledges” the court decision in favor of Santos, noting that “the court generally accepted the referees” despite the recommendations ” [company] Objection. “” In a federal presentation of July 31, Fluor said that the recommendations were based on numerous reasons, including [referees’] Lack of applying the project’s liability “and its” apparent bias “. The contractor has asked the court to” set aside the referees’ report to the final sentence “, which could reach the third quarter.
But Fluor says that “the principles of contracting by the court have broad consequences in the engineering and construction industry.”
A company spokesman did not respond to ENR by posting the story for more details on these consequences. Fluor said he is “exploring his response, including the calendar of his attractiveness.”
Santos, the second largest oil and gas company in Australia, is an acquisition goal of a consortium led by the International Arm of Abu Dhabi National Oil Co., which has a majority participation in the tender consortium that also includes Abu Dhabi Developlal Holding Co. and the North -American Private Capital Firm The Carlyle Group.
The United Arab Emirates are the largest commercial and investment partner in Australia in the Middle East, with $ 9.43 billion in goods and services marketed in 2023. The international arm of the country’s national oil company obtained the approval of the Council in June for a five -year plan to expand their non -domestic gas, chemical and energy work.
