HOUSTON (CN) – The founder of an Australian ammonia plant claims he paid $343 million out of pocket to build the plant in Western Australia, based on Apache Energy’s false claims that it had enough natural gas, the main ingredient in ammonia production, to supply the plant for 25 years.
Pankaj Oswal, a citizen of India and founder of Burrup Fertilisers, says that before he formed the company and began building the plant, he sought a long-term source of natural gas for it in Western Australia.
“Apache expressed interest in the project and represented to Mr. Oswal that: (1) Apache’s Australian affiliates had adequate reserves to supply the plant for 25 years at a fixed price from a gas field in Western Australia referred to as the Harriet Joint Venture (‘HJV’); and (2) Apache could and would supply gas from other sources at the same price if the HJV reserves proved inadequate to supply the plant,” Oswal says in his complaint in Harris County Court.
Relying on Apache’s representations, Oswal says, he provided guarantees and other securities for his company to secure financing, and “also contributed $343 million (USD) to cover additional, unexpected construction costs.”
“Only after construction of the plant was complete did Apache reveal that, in fact, its Australian subsidiaries lacked adequate reserves in the HJV to supply the plant for the agreed-upon term and that it had no intention of supplying gas from other sources at agreed-upon prices,” Oswal says. “As a result of Apache’s deceptive and misleading conduct, Mr. Oswal’s entire investment is now at risk.”
Oswal, in his personal capacity and as trustee for the Burrup Trust, seeks actual and consequential damages from Apache, a Delaware corporation operating out of Houston. He claims it violated three sections of the Australian Trade Practices Act.
He claims Apache’s “deceptive and misleading conduct” induced him to provide guarantees for the plant’s construction, and spend $343 million of his own money, along with $148 million from his affiliate companies.
Oswal is represented by Scott Humphries with Gibbs & Bruns.