Australia’s energy player Santos has been declared the winner of a court case it brought against Fluor Australia, a subsidiary of Texas-based engineering firm Fluor Corporation, relating to a liquefied natural gas (LNG) project on Curtis Island.
Upholding the majority of the findings of three referees from 2023, the Queensland Supreme Court ruled that Fluor must pay approximately A$692 million, or around $451 million, to Santos and its co-venturers. Additional amounts to be paid will be determined in the coming weeks.
The case relates to an engineering, procurement, and construction (EPC) contract that Santos signed with Fluor in 2011 for the development of production facilities forming part of the Gladstone LNG (GLNG) project.
As stated in the ruling, Santos sought to recover contract overpayments, damages for breach of a collateral contract or misleading or deceptive conduct in contravention of the Australian Consumer Law, and liquidated damages for the project’s late completion.
The GLNG plant is located on Curtis Island, approximately five kilometers north of the city of Gladstone, Queensland. The LNG plant consists of two trains with a combined nameplate capacity of 7.8 million tonnes per annum (mtpa). Construction took place between 2011 and 2014.
Natural gas, including coal seam gas from the Bowen and Surat Basins, is converted into LNG for export to Asia at Gladstone after being transported there via a 420-kilometer underground gas transmission pipeline. Santos has a 30% interest in the project, with Petronas (27.5%), TotalEnergies (27.5%), and Kogas (15%) as partners.
According to the Australian player, GLNG sells approximately two cargoes of LNG per week and has been supplying two long-term Asian customers since the first cargo was shipped in October 2015.
The Australian player recently opened negotiations for the proposed $18.7 billion non-binding indicative offer for all its shares made by a consortium led by ADNOC’s subsidiary XRG. On August 11, Santos reported that the exclusive due diligence period, which was originally envisaged to last six weeks, has been extended to August 22, 2025.
While due diligence has been substantially completed, and XRG stated that no discovery was made that would cause it to withdraw its proposal, it asked for a two-week extension to finalize the process and progress a scheme implementation agreement (SIA).
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