Summit Carbon Faces $15 Million Lawsuit Over Canceled Contract with Pipe Maker Welspun

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Summit Carbon Solutions has been sued by Welspun, a major pipe manufacturer based in India, for $15 million in damages related to canceling a contract to produce pipe for its proposed “Midwest Express” CO2 pipeline that would span more than 2,400 miles across five states.

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According to an April 16 regulatory filing made in India by Welspun Corp., Welspun Tubular LLC, the company’s U.S. subsidiary, filed suit on Feb. 21 in the state of Delaware against its customer – Summit Carbon’s subsidiary SCS Carbon Transport LLC.

Welspun states that it entered into an agreement with Summit on Sept. 17, 2022 for supply of high-frequency induction welding (HFIW) pipe. Then on January 31, 2023, according to Welspun, Summit “suspended the performance of the agreement for an indefinite period,” adding, “the maximum duration of suspension allowed under the agreement is six months.”

Welspun said it “sent several notices to Summit for revoking the suspension and ordering the resumption of production. Finally, Welspun sent a notice to cure the breach on account of Summit’s failure to purchase the pipes.”

Then on February 19, 2024, Summit sent a notice of cancellation to Welspun and terminated the agreement. Summit’s action caused Welspun to be “aggrieved,” and two days later Welspun filed a $15 million lawsuit against Summit in Delaware “to recover inter-alia the cancellation charges, material cost to manufacture pipes and other costs legitimately due under the contract resulting from cancellation of the project.”

Welspun, based in Mumbai, India, also has a large pipe production operation in Little Rock, Arkansas and is among the largest welded line pipe manufacturers in the world, with customers including TC Energy (Keystone 1, Gulf Coast Express, Keystone XL), Energy Transfer Partners (Dakota Access), Chevron and ExxonMobil.

Welspun isn’t the only entity that has taken action against Summit for breach of contract and nonpayment. As of February, Summit owed approximately $75,000 in unpaid bills to county inspectors and officials just within Iowa. The company has accrued nearly $60,000 in unpaid bills that are several months old owed to more than half a dozen counties across Iowa, mostly related to preparatory work completed by county inspectors, which Summit is required to repay. In one example, Summit had an outstanding bill of $15,000 to Webster County, Iowa.