Venture Global Wins Spot-Cargo Arbitration Case

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The "plain language in our contracts" is abundantly clear, after U.S. liquefied natural gas (LNG) powerhouse Venture Global (Arlington, Virginia) won a case filed by companies claiming it was profited by spot cargos rather than long-term supply agreements.

Shell plc (London, England) was joined by BP (London), Spanish energy company Repsol S.A. (Madrid), Portugal's Galp (Lisbon) and others in filing claims against Venture Global in 2023. The companies accused Venture Global of profiting from the sale of LNG from its Calcasieu Pass terminal in Louisiana on the spot market, rather than delivering on prices outlined in conventional long-term sales and purchase agreements.

Emerging victorious in the case, Venture Global countered that it was sanctioned to sell its LNG cargoes on the spot market because Calcasieu Pass was still in the commissioning phase.

"We are pleased with the tribunal's determination which 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," the company said in a statement filed Tuesday, after the release of results for the second quarter. "We have consistently honored these agreements without exception."

The initial Calcasieu Pass terminal had been operating in the commissioning phase over the last three years until mid-April of this year, when it started supplying fuel on long-term contracts. Venture Global said it was able to start commercial operations several years after it made its final investment decision (FID), "despite substantial impacts including two hurricanes, the COVID-19 pandemic, and major unforeseen manufacturing issues." Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Plant Database can view a detailed profile of Calcasieu Pass here.

The company added on Tuesday that delivering cargo from the facility before it started commercial operations meant it was able to help address global energy security concerns.

"The world needs more abundant, low-cost energy and our company looks forward to playing a leading role in meeting that demand for years to come," a statement read.

Shell in a statement delivered to the Reuters news service said the result was a blow to long-term industry confidence, though it respected the decision. Shell has a stake in the LNG Canada facility in British Columbia, which delivered its debut cargo in June.

The company expects the Asian economies to take up most of the gas from the facility, particularly as they shift away from coal for power generation, though a July report from Reuters said Shell was running into technical issues with the plant running at about 50% of its peak design capacity.

Subscribers can view a detailed profile of LNG Canada here.

Winning the case could create even further momentum for Venture Global, meanwhile. The company is moving forward with the second phase of its Calcasieu Pass facility (CP2) after making a FID in July. Operations there should begin in about two years.

Subscribers can learn more about CP2 from a detailed plant profile and related project reports.

Combined advances in its portfolio could put the total export capacity for Venture Global at 92 million metric tons per year (MMTPA) by the end of the decade, making it one of the largest LNG exporters in the world.

Venture Global on Tuesday reported net income of $368 million, a 21% improvement over the prior period. Income of $764 million over the six months ending June 30 marked a 20% decline, however, from the same period in 2024.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).