Court Orders Fluor to Pay Santos at Least $450 Million in Gladstone LNG Dispute
The Queensland Supreme Court has ordered Fluor to pay Santos at least $450 million in a dispute over the Gladstone LNG project, with both companies issuing sharply contrasting statements on the ruling.
(P&GJ) — The Supreme Court of Queensland has ruled in favor of Santos in a long-running dispute with Fluor over the Gladstone LNG project in Queensland, Australia.
The case involves a 2011 engineering and construction contract under which Fluor built production facilities for the project, completed in 2014. Santos claimed Fluor was overpaid and sought liquidated damages for delays, as well as enforcement of a parent company guarantee.
On Aug. 8, the court upheld most of the findings from a panel of referees, ordering Fluor to pay Santos and its co-venturers at least 692 million Australian dollars (about $466 million), with additional amounts — including interest and legal costs — still to be determined.
Santos said the decision “affirms that Fluor must pay substantial amounts owed under the contract” and reinforces accountability in major energy projects.
Fluor, however, signaled it may challenge the outcome. “The contracting principles addressed by the court have wide-sweeping consequences in the engineering and construction industry,” the company stated, adding it is “reviewing the court decision and exploring its response including the timing of its appeal” and is working with insurers to address potential obligations.
The dispute has been ongoing since 2016, with a final judgment expected later this year following further court proceedings.