An Arkansas pipe manufacturer is suing Summit Carbon Solutions for over $15 million due to delays in their agreement to build a carbon dioxide pipeline system spanning several states, including South Dakota.
Welspun Tubular filed the lawsuit, claiming that Summit Carbon Solutions commissioned them to produce approximately 785 miles of pipe, starting in May 2023, with a total cost of around $183 million. However, Summit’s project—a 2,500-mile pipeline network across five states—has faced unexpected delays in gaining approval. Construction, initially anticipated to commence sooner, is now projected to begin early next year.
According to court documents filed in Delaware, where Welspun is incorporated, a purchase agreement between the two companies allowed Summit to postpone pipe production for up to six months until November 2023. Welspun was granted further delay until early 2024 by producing pipe for other projects, a condition agreed upon by Summit.
However, when Welspun informed Summit of its intention to proceed with production in February, Summit sought further delay. Allegedly, discussions between the parties revealed significant delays in the project’s timeline. Subsequently, in February, Summit terminated the agreement, prompting Welspun to claim a $15 million cancellation charge and partial reimbursement for materials procured for pipe manufacturing.
Summit contests the claim, stating its disagreement over owing the money and expressing a desire to reach a resolution swiftly. The company reiterated its commitment to collaborating with Welspun despite the dispute.
Summit Carbon Solutions aims to establish an $8.5 billion pipeline system to transport captured carbon dioxide from ethanol plants to North Dakota for underground sequestration. The Iowa Utilities Board is currently evaluating whether to issue a hazardous liquid pipeline permit for the project.
Initial pipeline routes proposed by Summit were rejected by state regulators in North and South Dakota. However, North Dakota is reviewing a revised plan, and Summit intends to submit a new permit request in South Dakota.
