Qatar company demands defect repair compensation from Hyundai shipyard

By Lim Chang-won Posted : March 26, 2018, 13:09 Updated : March 26, 2018, 13:09

[Courtesy of Hyundai Heavy Industries]


SEOUL -- A Qatar oil and gas company has brought South Korea's Hyundai Heavy Industries to an international panel for arbitration over its demand for defect repairing and compensation worth more than 2.6 billion US dollars, the shipyard said Monday.

Under an $860 million contract, Hyundai Heavy Industries, the world's largest shipbuilder, built offshore wellhead facilities and pipelines in 2015 for Barzan Gas involved in a $10.4 billion gas project designed to meet rising demand in Qatar.

The first phase of the project was to start in November 2016 but it suffered repeated delays because of a gas leak in an upstream pipeline. Hyundai Heavy said Barzan Gas filed for arbitration through the International Chamber of Commerce as negotiations on compensation for repair work faltered.

Bazan Gas has demanded excessive compensation, although the design provided by the Qatar company caused defects, the shipyard said, calling for a reasonable deal.  Hyundai Heavy has already set aside some 220 billion won in provision for defects.
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