Lawsuit: Completion of Weld County gas plant marred by payment dispute

DENVER — A Denver area oil and gas operator is suing a Westminster-headquartered subcontractor following an invoice dispute that allegedly caused the construction management firm to abandon a nearly complete gas plant project in Pierce. 

Greenwood Village-based REP Processing LLC, which does business as Rimrock Oil & Gas, hired Westminster-headquartered Kahuna Venture LLC, an engineering and construction management firm that specializes in midstream oil and gas projects, to oversee the construction of a Weld County gas plant and an amine treatment system, used to remove compounds such as hydrogen sulfide and carbon dioxide from gases, court documents show. 

As part of the parties’ agreement, a billing cap of  $3,350,000 was applied for engineering, design, drafting, project management and controls, according to the complaint.

“Kahuna, however, due to its own design delay issues, claimed it could not deliver timely the amine work contemporaneous with finishing the rest of the project,” court documents allege. “In fall 2019, Kahuna also claimed that it required an increase in the project billing caps to complete the amine construction portion of the project.”

After a series of payment structuring and change order discussions in late 2019, Kahuna offered discounts meant “to entice Rimrock to retain Kahuna to finish work for the project,” according to the suit.

In late 2019, Rimrock paid Kahuna more than $900,000 as part of the new payment agreement, the complaint claims. In March, Kahuna invoiced Rimrock for an additional roughly $533,000.

“The only explanation for Kahuna’s conduct is that this is an attempt to extract extra money out of Rimrock as the project nears completion,” Rimrock attorneys with Lewis Roca Rothgerber Christie LLP claim in the suit. 

Representatives for Rimrock and Kahuna did not respond to requests for comment Monday.

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