Summit Carbon sued for $15 million over canceled pipe contract

Nancy Dugan lives in Altoona, Iowa and has worked as an online editor for the past twelve years.

Disclosure: Dugan has filed several objections into the Summit Carbon Iowa Utilities Board dockets in opposition to the CO2 pipeline. She has neither sought nor received funding for her work.

Welspun Tubular LLC, a U.S. subsidiary of Mumbai-based pipe manufacturer Welspun Corp. Ltd., filed suit on April 15 against SCS Carbon Transport LLC (doing business as Summit Carbon Solutions) in Delaware Superior Court.

The Pipeline Fighters Hub was first to report on the lawsuit on April 17. Jared Strong covered the story for Iowa Capital Dispatch the next day.

The complaint reads as follows:

Two relevant excerpts from the complaint:

Summit Carbon and Welspun Tubular entered a Purchase Agreement dated as of September 16, 2022, under which Summit agreed to purchase and Welspun agreed to manufacture $182.5 million of steel pipe according to Summit’s custom specifications.

The Purchase Agreement further allowed Summit Carbon to “cancel this Purchase Agreement, in whole or in part, without cause, at any time,” and that in the event of cancellation, Welspun Tubular would be entitled to recover a cancellation charge of ten percent of the price of the cancelled pipe up to a maximum cancellation charge of $15,000,000, provided the cancellation occurred after the pipe was scheduled to commence manufacture. Further, Welspun would be entitled to recover the price of materials purchased to manufacture the cancelled pipe, less the net salvage value of the materials.

According to an April 16 Disclosure by the Welspun Corp. addressed to three Indian stock exchanges, Welspun is seeking to recover $15 million following the cancellation of a contract to purchase high frequency induction welded pipes for the Summit Carbon pipeline project. Item 5 of the Disclosure reads as follows:

Welspun has raised a claim for cancellation charges amounting to USD 15 million along with a claim to recover the raw material exposure and other costs legitimately due under the contract resulting from cancellation of the project.

Welspun first announced that it had secured an order for a “Carbon Capture Pipeline project in the United States” in September 2022 according to Market Screener. The announcement did not specifically identify Summit Carbon Solutions.

In November 2022, American Steel Pipe said Summit Carbon had placed orders for “$440 million of carbon steel line pipe from four American-based companies, including American Steel Pipe, a division of American Cast Iron Pipe Company (ACIPCO).” No other companies were named in the American Steel announcement.

Also in November 2022, L.B. Foster announced a partnership with ACIPCO to produce “2.5 million feet of 24-inch fusion bond epoxy coated pipe and an additional quantity of 24-inch abrasion resistant overcoat coated pipe” for the Summit Carbon project.

The Iowa Capital Dispatch story revealed that Summit Carbon issued the following prepared statement in response to the lawsuit: “Our current dispute with Welspun Tubular revolves around timing issues related to pipe delivery. We’re committed to resolving this matter swiftly, and our intention to collaborate with Welspun remains unchanged.”

The company’s position may conflict with American Steel Pipe’s contention that Summit Carbon had placed orders for “$440 million of carbon steel line pipe from four American-based companies” in light of the fact that Welspun Corp. is based in India. The status of all pipeline contracts with Summit Carbon is unknown.

The primary attorney for Welspun is Catherine A. Gaul, president and managing partner of Ashby & Geddes in Wilmington, Delaware. White & Case LLP is listed as “of counsel.”

Welspun Tubular is located in Little Rock, Arkansas. The parent organization of Welspun Corp. is the Welspun Group, which is also based in Mumbai.

The April 16 Welspun Disclosure reads as follows:

Top image: The Dakota Access Pipeline being installed between farms, as seen from 50th Avenue in New Salem, North Dakota. Photo by Tony Webster from Minneapolis, Minnesota, CC BY-SA 2.0, via Wikimedia Commons.

About the Author(s)

Nancy Dugan

  • Bruce Rastetter is not one of the featured people...

    …in the new book “Barons: Money, Power, and the Corruption of America’s Food Industry” by Austin Frerick. But if someone ever writes a book about the Big Ag carbon-pipeline scam, Bruce will have his chance at wider fame.

  • Thanks again, PrairieFan

    I always enjoy reading your comments. I hope that Austin may some day return to Iowa and once again run for public office.

  • Thank you again, Nancy Dugan

    You are doing something that really needs to be done.