Shell has initiated arbitration against Venture Global LNG, alleging failure to deliver LNG shipments from the Calcasieu Pass facility. Alongside other firms like BP and Repsol, Shell seeks compensation for billions in lost profits. Venture Global cites incomplete commissioning as the reason for delays, escalating tensions in the LNG industry
Shell has initiated arbitration against Venture Global LNG over allegations of failing to deliver liquefied natural gas (LNG) from the Calcasieu Pass facility. Shell’s CEO, Wael Sawan, revealed that no shipments have been received under their agreement, which had been crucial for the project's financial backing.
In addition to Shell, companies like BP, Galp, and Repsol have also filed arbitration cases in the U.S., citing substantial financial losses due to undelivered LNG over the past two years. The firms claim these undelivered shipments have cost them billions in missed profits.
Venture Global argues that the Louisiana facility has not yet been fully commissioned, a justification disputed by many in the energy sector. Previously, Venture Global criticized Shell’s performance in its LNG projects, a move seen as deflecting accountability.
The dispute mirrors a recent case involving Shell’s subsidiary, Nigeria LNG Limited (NLNG), which faced legal action for failing to supply 19 LNG cargoes under a 2020 agreement. In July 2024, an arbitration panel and the England and Wales High Court ruled against NLNG, intensifying concerns over contractual reliability in the LNG industry.
Furthermore, Shell accuses Venture Global of unjustly earning $3.5 billion from unfulfilled deliveries, a claim supported by reports from the Financial Times. This arbitration underscores the growing tension and scrutiny surrounding long-term LNG contracts and operational delays.
