Freeport LNG sues three contractors over defects at Texas plant

U.S. LNG exporter Freeport LNG filed a lawsuit in April against three contractors, alleging that installation defects in electric motors at its $14-B Texas export plant caused prolonged outages and costly repairs. The lawsuit, filed in a Texas district court, alleges that work done by contractors Zachry Industrial, Chiyoda International and CB&I, a unit of McDermott, resulted in major damage to key equipment.
Freeport's Quintana, Texas, facility has experienced roughly a dozen incidents so far this year. The plant can produce more than 15 MMtpy of LNG and consume roughly 2.1 Bft3d of natural gas, enough to roil gas markets when it goes offline.
Zachry Holdings filed for bankruptcy last month and stepped away from work on the Golden Pass LNG plant, owned by ExxonMobil and QatarEnergy, that is under construction in Texas. The Freeport LNG plant was converted from an import facility roughly 15 years ago as the U.S. shale revolution flooded the country with natural gas. It is the first world-scale electric-powered LNG plant in North America, with three trains running on General Electric 75-megawatt motors.
Problems with the motors were identified following an incident in January, according to the lawsuit. A root cause analysis of the incident found an electrical short resulting from loose assembly hardware, including nuts and bolts.
A further investigation found additional issues related to the motors, including a "significant partial discharge" due in part to excessively long cables. Freeport inspected Trains 1 and 2 after identifying problems with Train 3's motors and further halted some operations. Additional workmanship issues were found on Train 2, the lawsuit said.
Freeport did not specify how much it was seeking in damages in the lawsuit, but said that the amount was over $1 million.


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