South Korea’s Hyundai Heavy Industries Company (HHI) has been challenged with an arbitration suit by Barzan Gas Company, a subsidiary of state-owned energy company Qatar Petroleum.

Barzan Gas is demanding $2.6bn worth of repair and maintenance work in its offshore facilities which was delivered in 2015 by HHI.

HHI said Barzan Gas has filed for an arbitration with the International Chamber of Commerce to demand pipeline replacements that could cost more than $2.6bn.

The South Korean firm said it has formed a team of legal and engineering advisers for defending its case, adding that the Barzan Gas has “low chance of winning the case”.

Simultaneously, HHI has said it will work on striking a “reasonable” out-of-court settlement within its maintenance reserve fund of $233m.

HHI won the $860m worth project to build and install the topside, deck house and pipelines for natural gas facilities for Barzan Gas in January 2011.

After the facilities were delivered in April 2015, Barzan Gas complained of defects in some sections of the pipes and demanded a complete replacement of the structure with better quality ones.

HHI said Barzan Gas is “more or less acknowledging the problem” in its original design of the project and pipeline order by asking for replacement with a different type that is five times more expensive.