A project for a syngas separation unit (SSU) at the BASF campus in Geismar, La. still owes $804.5K to at least one contractor on the project. Meanwhile, the general contractor on the job has filed for bankruptcy.
The project is owned by Praxair, Inc. Praxair is the largest industrial gas company in North and South America, and it’s the third largest worldwide with a revenue of $11.4B in 2017.
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In 2018, Praxair merged with Linde AG to form Linde plc, currently the largest industrial gas company in the world by market share and revenue.
The Geismar SSU Project, as referenced in the mechanics lien filings, was planned for the BASF campus located at 8404 River Rd. in Geismar, La. The project carried a price tag of more than $150M, and it was to be completed in 2020.
Under Praxair’s management, the plant will produce high-quality carbon monoxide and hydrogen.
Primoris Energy Services Corporation was contracted by Praxair to provide mechanical, electrical, and instrumentation (MEI) construction services for the Geismar SSU Project. After going unpaid on the project, Primoris filed a mechanics lien that claims $3.2M. The lien was filed with the East Baton Rouge Parish County Clerk on July 1st. 2020.
The original lien was later amended on August 31st, 2020, reducing the claim amount to $804.5K.
A mechanics lien is a property claim available to contractors for use when struggling to collect payment. When the property owner or general contractor pays a portion of the debt, the mechanics lien can be amended to reflect the remaining balance. If the debt is paid in full, the lien is released.
General Contractor Files for Bankruptcy on Geismar SSU Project
The Geismar SSU Project is the second production plant in Geismar. KP Engineering (KPE) was awarded a fixed price EPC contract from Praxair to expand on the first plant in 2016, a project which ended in 2018.
KPE was chosen again in 2017 to supply procurement, engineering, fabrication, and construction services for the Geismar SSU Project referenced in this article.
Little seems to have gone to plan for KPE, however.
KPE’s case is still in progress since the company filed chapter 11 papers in 2019. According to case documents filed on April 6th, 2020, KPE also ran into some disputes with Praxair on the Geismar SSU Project:
“After KPE LP performed some, but not all of the work and obligations arising under the Geismar SSU Agreement, disputes and disagreements arose between KPE LP and Praxair. To resolve the disputes, on or about July 30, 2019, KPE LP and Praxair entered into a Settlement Agreement.”
The settlement between KPE and Praxair included:
- Praxair taking over KPE’s obligations to complete the project
- Praxair taking responsibility for paying the subs and suppliers
- Praxair to release KPE from the performance of agreed-upon obligations
- KPE to provide Praxair with support to perform their assumed duties
Under these terms, Praxair would be responsible for paying the other contractors on the project, including Primoris.