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Published on May 22, 2024
San Antonio's Zachry Holdings Seeks Bankruptcy Amid Golden Pass LNG Project StrugglesSource: Google Street View

The construction scene was dealt a blow as Zachry Holdings, a San Antonio-based powerhouse, filed for Chapter 11 bankruptcy. Citing untenable predicaments stemming from its involvement in the Golden Pass LNG terminal venture, the company is bowing out of the $10 billion project.

Difficulties for Zachry spiked amid the pandemic and were exacerbated by, "international geopolitical issues," according to the firm's chairman and CEO, John B. Zachry. These troubles have imposed "significant financial strain" on the company, affecting its performance and staffing capabilities at the Golden Pass project site near Port Arthur. This was a significant factor in the decision to pursue bankruptcy protection, as mentioned in a statement obtained by the San Antonio Report.

Zachry Holdings, also known as Zachry Group, is notable in the engineering and construction sector, boasting a workforce of 20,000 and $5.4 billion in 2023 operating revenues. The Group's portfolio spans the United States and across the globe. However, the financial duress means it will now make a "structured exit" from its major role in the Golden Pass project, a joint venture between Chiyoda International Corporation, McDermott International, and Zachry Holdings itself.

Despite the Chapter 11 filing, activities at Zachry's other job sites will persist uninterrupted. The bankruptcy proceedings, filed in the Southern District of Texas, aim to restructure the company's finances under court supervision, leaving other business operations to proceed as usual, though with noted caution from leadership. In an earlier development, Zachry had furloughed some hourly subcontractors at the terminal site, leading Golden Pass LNG to hint at a potential shake-up within the CCZJV joint venture, as per a report from a Beaumont news station.

Golden Pass LNG has acknowledged the bankruptcy stating, "Work continues on the project with McDermott and Chiyoda, the other two parties to the EPC contract, with thousands of workers on site. The project is already 75% progressed and we are committed to completing the project," a spokesperson remarked, emphasizing the project's advancement and the determination to see it through to completion. This indicates that, despite the setback with Zachry's departure, the massive infrastructural undertaking will push forward.