Venture Global Wins Arbitration Case Against Shell Over Contracted LNG Cargoes

Venture Global denied the claim, saying it delayed moving to commercial operations because of a faulty electric system that did not allow the plant to operate optimally. “We are disappointed with the outcome but respect the Tribunal’s decision,” Shell said in a statement to Reuters. Trust in long-term contracts is the bedrock of the LNG industry and essential for continued investment and sustainable growth, the company statement said. The decision of the tribunal is in keeping with Venture Global’s position that it has always honored its agreements with its customers, the company said.

“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. Earlier on Tuesday, Venture Global said it faced a potential penalty of up to $1.6 billion, according to its second-quarter earnings report. Some of the companies involved in the arbitration were pushing for a higher penalty, the report said.

In just three years, Venture Global has become the second-largest U.S. LNG producer, playing a key role in keeping the country as the world’s top LNG exporter. The company is also poised to become the largest U.S. LNG company by next year if it proceeds with its CP2 project in Louisiana and continues overproduction at its existing plants, according to LSEG data and company statements.

(Reporting by Curtis Williams in Houston, Tanay Dhumal in Bengaluru; Editing by Mark Porter and Stephen Coates)