According to court documents, the owners of the $10 billion liquefied natural gas project Golden Pass, Qatar Energy and ExxonMobil (XOM.US), have asked the court to immediately remove the project's main contractor Zachry Industrial from the project, as the bankruptcy of the contractor has caused the project to stall.

Zachry is said to have the largest share in the contract to build the Golden Pass liquefied natural gas terminal. After suffering huge cost overruns, the company filed for bankruptcy protection last month and said it was seeking a "structural exit."

On Tuesday evening, the joint venture Golden Pass LNG between Qatar Energy and ExxonMobil requested the US bankruptcy court to terminate Zachry's $5.8 billion contract within five days, or allow it to take possession and control of the facility - which is about 75% complete. Court documents say,"Zachry has stopped fulfilling its obligations under the EPC (engineering, procurement and construction) contract, has dismissed thousands of workers, stopped paying subcontractors, and abandoned its commitment to build the Golden Pass project at a one-time fixed price."

Zachry said it hoped to receive fair and appropriate compensation for its role in the joint venture. A spokesperson for the company said in a statement,"We recognize that we are unlikely to reach agreement on the modified EPC contract. We believe that the most likely outcome, as Zachry emerges from bankruptcy, is a structural exit." The company previously stated that due to challenges related to the pandemic, order changes and billing schedules, the project's cost had soared by $2.4 billion and that it could not resolve its differences with the owner.

In addition, Zachry said:"Golden Pass and its shareholders have left a series of scars, including thousands of jobless employees, and local suppliers and vendors who have not received compensation. While we seek to address these issues through the legal process, our work continues and we have sufficient funds and personnel for our other projects around the country."

Golden Pass LNG told the court that it needed to take over the contract immediately and resume construction to "prevent further prolonged deterioration of the partially constructed project." The company said,"The scale and complexity of the components partially completed and exposed in the environment of the liquefied natural gas facility cannot be underestimated." The project is expected to begin processing natural gas later this year, but has not yet updated its completion schedule. The company said, "Time is of the essence. As time goes on, the damage caused by Zachry to itself and others will only spread and become more difficult to remedy."