This matter involves an ICC dispute between Korean Hyundai Heavy Industries (HHI) and Qatari Barzan Gas Company. In 2011, HHI was awarded a US$900 million contract to build the offshore part of the Barzan Gas Project located 80 kilometers northeast of the Ras Laffan Industrial City in Qatar. The contract involved the installation of 300 kilometers of subsea pipelines, 100 kilometers of subsea cables, and three offshore platforms. Following completion in 2015, Barzan’s offshore facilities were found to have leaks in the pipeline welds. Barzan Gas Company, a subsidiary of the state-owned Qatar Petroleum, subsequently filed a claim to the ICC requesting damages for repairs to the subsea pipelines and lost profits in excess of US$8 billion.

HHI retained NERA to provide expert testimony on damages. The NERA team consisted of Senior Managing Director Richard Hern and Directors Sean Gammons and Zuzana Janeckova. NERA was asked to assess lost profits to Barzan Gas arising from construction delays to the project and respond to the lost profit analysis presented by Barzan’s expert.

NERA estimated lost profits using a discounted cash flow model comparing Barzan Gas’ cash flows in two scenarios—one with and one without the construction delays. Key areas of analysis included gas demand, gas and associated product prices, and taxes.

Following negotiations between the parties, the case settled prior to hearings.