Venture Global wins arbitration case against Shell over LNG cargoes

US liquefied natural gas (LNG) exporter Venture Global has won an arbitration case against Shell concerning allegations of non-delivery of LNG cargoes from its Calcasieu Pass facility in Louisiana. The ruling is the first to be resolved in a series of disputes between the LNG producer and several of its long-term foundation customers.

The dispute centred on Venture Global selling cargoes on the higher-priced spot market while its Calcasieu Pass facility was still in a lengthy commissioning phase, which the company attributed to equipment issues.

Shell, along with other major offtakers such as BP and Repsol, initiated arbitration proceedings, arguing that Venture Global was improperly withholding cargoes that should have been delivered under their long-term contracts. 

Venture Global maintained that because the plant was not yet in full commercial operation, the cargoes sold were "commissioning cargoes" and not subject to the long-term agreements.

In a statement, the company said it was pleased with the tribunal's determination, which it stated, "reaffirms what Venture Global has maintained from the outset--the plain language in our contracts, mutually agreed upon with all of our customers, is clear."

In response to the ruling, Shell said, “We are disappointed with the outcome but respect the Tribunal's decision. Trust in long-term contracts is the bedrock of the LNG industry and essential for continued investment and sustainable growth.”