Venture Global announced in August the partial final award was issued by the International Chamber of Commerce, International Court of Arbitration in the arbitration proceedings between Venture Global Calcasieu Pass and Shell NA LNG regarding LNG sales from the Calcasieu project under the LNG sales and purchase agreement entered into by the two firms.
In contrast, UK-based energy giant BP recently won an arbitration case against Venture Global over the same issue.
“We have filed an application in the New York Supreme Court to set aside the Tribunal’s liability award,” the Shell spokesperson said in emailed comments.
“The application alleges that Venture Global procured the award by improperly withholding material information from Shell and the Tribunal,” the spokesperson said.
“We are not able to comment further at this time, as the proceedings will be before the Court in due course and we remain bound by the confidentiality requirements of the contract and ICC arbitration rules,” the spokesperson added.
Calcasieu Pass produced its first LNG on January 19, 2022, moving from FID to LNG production in 29 months, while the first commissioning cargo left the facility on March 1, 2022.
In April, Venture Global launched commercial operations at its Calcasieu Pass LNG terminal, some 68 months from its final investment decision and 38 months after production start.
Besides Shell and BP, other Calcasieu Pass offtakers are also in dispute with Venture Global over LNG sales from the Calcasieu Pass terminal.
Portuguese energy firm Galp does not expect a decision in its arbitration proceedings with Venture Global before 2026.
Besides Shell, BP, and Galp, other customers of the Calcasieu pass facility include Repsol, Edison, PGNiG, now part of Orlen, Sinopec’s unit Unipec, and CNOOC.
Venture Global’s response
Venture Global also issued a response later on Tuesday following Shell’s announcement.
“Shell had a full and fair arbitration process, which resulted in a unanimous decision against them,” the company said.
“Their court petition to vacate the award is without merit and is another desperate attempt to exert leverage to achieve a result they couldn’t secure contractually or in arbitration,” Venture Global said.
“While Shell continues their efforts to obstruct Venture Global’s growth, we continue to deliver, build, and sign new customers—helping to keep the global market well supplied with low-cost LNG. We will continue to focus on progress, not distraction, and will be responding appropriately,” the company added.
Remedies
Venture Global said in its third-quarter results report that the remedies originally sought by these customers included damages ranging between $6.7 billion and $7.4 billion.
“Following the positive resolution of two arbitration proceedings, the Calcasieu project remains involved in arbitration proceedings with five of its post-COD SPA customers. The remedies sought by these customers include damages ranging between $4.8 billion and $5.5 billion,” Venture Global said.
The remedies sought by BP include damages in excess of $1 billion, as well as interest, costs, and attorneys’ fees, the firm said.
Venture Global said the remedies sought by the remaining four Calcasieu project post-COD customers in arbitration proceedings include “damages ranging between $3.8 billion and $4.5 billion in the aggregate, rather than the termination of the post-COD SPA.”
“We believe these disputes are subject to the relevant seller aggregate liability limitation under the applicable post-COD SPA, which amount to $765 million in the aggregate,” the company said.
“However, these customers are also disputing whether the liability limitations in such post-COD SPAs are applicable, and therefore are claiming damages in excess of the liability limitations,” Venture Global added.
The company also said in its third-quarter results presentation that it expects “one other customer arbitration to be decided as soon as the end of 2025.”
“The remaining four separate VGCP post-COD offtaker arbitration proceedings are not expected to be decided until 2026 at the earliest,” it said.
(This article was updated to include a response from Venture Global LNG.)
