Fluor to pay Santos A$692m to Santos in Gladstone LNG dispute resolution

The Queensland Supreme Court has ruled global EPC firm Fluor must pay approximately A$692m to Santos and its co-venturers over a dispute involving an engineering and construction contract.

The proceedings arose under the contract Santos entered with Fluor in 2011 for the development of production facilities that formed part of the Gladstone LNG project. Construction took place between 2011-2014.

In a statement, Santos said it argued that Fluor was not entitled to all the costs it had claimed and received payment for, under the contract.

Santos sought to recover those amounts and also made claims to recover liquidated damages “associated with the late completion of the project” and sought to enforce against a parent company guarantee from Fluor Corporation.

© Santos

The Queensland Supreme Court referred Santos’ claims to three referees who provided their final report on 14 July 2023. In the referees’ opinion Santos was entitled to recover certain costs.

The court has upheld the majority of the referees’ findings, with further sums owing, and the final amount ordered in Santos’ favour (with interest plus legal costs) to be determined in the coming weeks.

The Gladstone LNG plant consists of two trains with capacity of 7.8 million tonnes per annum and Santos operates the facility under a joint venture with Petronas, TotalEnergies and KOGAS.

Fluor Corporation recently announced its joint venture with JGC Corporation was awarded the contract to update the Front End Engineering and Design (FEED) for a proposed Phase 2 expansion of the LNG Canada facility on the traditional territory of Haisla Nation in Kitimat, British Columbia, Canada.