Venture Global, the LNG export major, has won an arbitration case brought against it by Shell for failure to honour long-term contracts in favor of spot-market sales.
The tribunal that Shell and half a dozen other energy majors from Europe approached for their dispute with Venture Global ruled that the U.S. company had not violated its contractual obligations with its long-term clients.
Shell, along with companies including BP, Repsol, Edison, and Portugal’s Galp, accused Venture Global in 2023 of profiteering by selling LNG cargos that should have been supplied under their long-term contracts on the higher-price spot market. The U.S. firm used a loophole to do that by extending the deadline for officially commissioning its first LNG plant in Calcasieu Pass.
Venture Global claimed that it was under no obligation to honor its long-term commitments until the plant was officially commissioned, which happened earlier this year. Meanwhile, it managed to build a second LNG facility that produced its first LNG at the end of 2024—before the first one was officially commissioned.
“We are disappointed with the outcome but respect the Tribunal’s decision,” Shell said in comments on the news. The supermajor had accused Venture Global of wrongfully earning as much as $3.5 billion from its spot market sales.
“Our industry and the investors and lenders who underpin it, all rely on respect for both the sanctity of negotiated contracts and the experienced, objective regulatory and legal bodies that govern it,” Venture Global said, as quoted by Reuters.
Meanwhile, another European supermajor, TotalEnergies, earlier this year declared it would not do business with Venture Global because of the profiteering affair, with chief executive Patrick Pouyanne saying that “I don’t want to deal with these guys, because of what they are doing. … I don’t want to be in the middle of a dispute with my friends, with Shell and BP.”
By Irina Slav for Oilprice.com
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