A heavily redacted report released by the U.S. Pipeline and Hazardous Materials Safety Administration later that year found that an improperly isolated pressure relief valve allowed warming and expansion of LNG inside piping, which increased pressure and resulted in a rupture that released the gas in both vapor and liquid form. The LNG vapor then ignited, causing a fireball that breached other piping nearby and caused a secondary fire. The report cited human error and highlighted large amounts of overtime plant staff were working.

After Zachry filed for federal bankruptcy protection this past May related to a dispute on the Golden Pass LNG project, a Texas LNG plant now under construction, insurers Allianz Global Risks US Insurance Co., Great Lakes Insurance SE, Guideone National Insurance Co., Tokio Marine Insurance Co., certain underwriters at Lloyd’s of London, as well as FLNG Liquefaction LLC, filed a pair of lawsuits claiming the contractor and its partners McDermott International and Chiyoda were responsible for the explosion. The suits said the firms failed to install safeguards that could have alerted operators before the explosion. The insurers sought reimbursement, known as subrogation, from the contractors for the damages they paid to Freeport LNG's owner for the damage.

Attorney John Thomas, representing Zachry, argued before U.S. bankruptcy Judge Marvin Isgur in Texas last month that the engineering, procurement and construction agreement between the project owner and contractors had risk-allocation provisions that included a waiver of subrogation claims against the construction firms.  

Thomas said the risk allocations are essential to safeguarding EPC contractors involved in projects like the Freeport LNG facility. 

“Imagine the situation of trying to get financing when you potentially face a long-term tail of billions of dollars of potential consequential loss,” Thomas said, according to a copy of his comments. “You just couldn’t do these projects. These EPC companies couldn’t do these projects, and companies like [Freeport LNG] and Golden Pass would not have these very profitable facilities without these types of provisions that prevent a long-term liability tail following them for decades into the future.”

The judge agreed, dismissing the cases on Nov. 21 and saying in court that the insurers “have no standing here,” according to a transcript attached to the insurers’ appeal. However, Isgur also said he did not want to rule on whether the insurers might have a liability claim under other provisions of the contract. 

An attorney representing the insurers did not immediately respond to inquiries, and Thomas shared no comment beyond his remarks from court. 

Zachry Group ranks No. 28 on the ENR Top 400 Contractors with more than $5.4 billion in 2023 revenue. A Zachry subsidiary, along with Chiyoda International Corp. and CB&I LLC, a McDermott unit, worked on three total LNG processing “trains” at the Freeport facility that came online between 2019 and 2020. 

After the fire, Freeport LNG hired Kiewit Construction to restore the plant and was able to resume operations about eight months after the incident. The company plans to expand the plant with a fourth LNG train, already gaining approval from the Federal Energy Regulatory Commission in 2019 for the project and raising more than $1 billion to fund it.