ByIrina Slav– Feb 06, 2025, 2:40 AM CST
TotalEnergies passed on the opportunity to sign up for long-term liquefied natural gas from U.S. Venture Global because it did not trust the company, the French supermajor’s chief executive told Reuters.
“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,” Patrick Pouyanne told the publication.
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Venture Global is currently embroiled in a dispute with Shell, BP, and several other European energy majors after it refused to start deliveries to them under long-term contracts in favor of selling its LNG on the spot market, making billions, according to the clients.
The LNG exporter used a legal loophole that allowed it to delay the official commissioning of its Calcasieu Pass LNG facility, which was when the long-term contracts would come into effect.
BP, Shell, Repsol, and Eni are suing Venture Global, with Shell last September accusing Venture Global of earning some $3.5 billion from selling LNG on the spot market while it should have supplied it under its long-term contracts. This, Shell alleged, caused serious LNG sourcing difficulties for one unnamed company that had to resort to sourcing the gas from five other U.S. producers, incurring additional costs of $1.5 billion.
BP, Shell, and Spain’s Repsol, along with two other European energy companies, were foundation buyers for the Calcasieu Pass facility, meaning they provided Venture Global with the money to build the place in Louisiana in exchange for a commitment from the company to supply them with certain volumes of LNG over a long-term period.
The facility has a capacity of 10 million tons, and it started producing in early 2022—right on time for Europe, which was beginning to experience a shortage. But instead of honoring its contracts with the European buyers, Venture Global chose to sell more LNG on the spot market.
By Irina Slav for Oilprice.com
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