Steel pipe manufacturer Welspun Tubular LLC is suing carbon pipeline company Summit Carbon Solutions for $15 million for allegedly breaching a purchase agreement for $182.5 million worth of pipe.
The company, a subsidiary of an Indian manufacturing firm, last week filed a lawsuit in Delaware State Court alleging Summit canceled its contract for about 4.1 million feet of pipe after experiencing project delays in North Dakota, South Dakota and Iowa.
Production of pipe for the project was supposed to begin last May under a purchase agreement, but Summit also was given flexibility to delay it for up to six months, "which it did while it tried to obtain project permits in North Dakota, South Dakota, and Iowa, the states in which construction was set to begin," according to the lawsuit.
When that six-month window expired, Summit requested "an indefinite suspension period," which was denied by Welspun Tubular.
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Then Summit, the lawsuit alleges, "refused to purchase the pipe as required by the purchase agreement." Later, it says, the company canceled it altogether.
"Welspun files this lawsuit to hold Summit to its bargain, which includes payment for the materials purchased to manufacture the pipe and a contractually mandated cancellation charge of $15,000,000," the lawsuit says.
Summit Spokeswoman Sabrina Zenor told Agri-Pulse in an email that the current dispute "revolves around timing issues related to pipe production."
"We're committed to resolving this matter swiftly, and our intention to collaborate with Welspun remains unchanged,” Zenor said. "We anticipate a resolution that aligns with our shared goals: building a pipeline to safely and permanently store CO2, opening access to new markets for ethanol."
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