Nebraska Examiner

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An Arkansas pipe manufacturer is seeking more than $15 million from a company that wants to build a carbon dioxide pipeline system in Iowa amid delays of their agreement, according to a lawsuit filed this week.

The lawsuit filed by Welspun Tubular says Summit Carbon Solutions commissioned the company to produce about 785 miles of pipe, starting in May 2023, at a total cost of about $183 million.

But Summit’s project — a 2,500-mile pipeline network in five states — has taken longer to get potential approval than the company initially anticipated. It now says construction might begin early next year.

A purchase agreement between the two companies allowed Summit to delay pipe production for up to six months until November 2023, according to the lawsuit complaint filed in state court in Delaware, where Welspun is incorporated.

Welspun was able to further delay the start of production to early 2024 by manufacturing pipe for others, to which Summit agreed, court records show.

But when Welspun notified Summit that it planned to proceed with production in February, Summit sought to delay again, according to the lawsuit.

“Summit asked to discuss the status of the project, and those discussions revealed that the project was dramatically off-schedule,” the lawsuit says.

In February, Summit canceled the agreement, according to the lawsuit. Welspun claims that entitles it to a $15 million cancellation charge and partial reimbursement for materials it obtained to manufacture the pipe.

Summit disagrees that it owes the money and hopes to find a compromise.

“Our current dispute with Welspun Tubular revolves around timing issues related to pipe delivery,” the company said in a prepared statement. “We’re committed to resolving this matter swiftly, and our intention to collaborate with Welspun remains unchanged.”

Summit’s $8.5 billion pipeline system would transport captured carbon dioxide from ethanol plants to North Dakota for underground sequestration.

The Iowa Utilities Board is poised to decide whether to issue the company a hazardous liquid pipeline permit.

State regulators in North and South Dakota rejected the company’s initial pipeline routes. North Dakota is reconsidering a revised plan, and Summit has said it intends to file a new permit request in South Dakota.

This article first appeared in the Iowa Capital Dispatch, a sister site of the Nebraska Examiner in the States Newsroom network.

The post Pipe supplier sues Summit Carbon Solutions for $15 million appeared first on Nebraska Examiner.

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