London — Shell has challenged its defeat in an arbitration case against US liquefied natural gas (LNG) producer Venture Global in the New York Supreme Court, weeks after rival BP won a similar $1bn-plus arbitration.
The arbitration cases had to do with Venture Global’s failure to deliver LNG under long-term contracts while selling on the spot market as prices soared after the outbreak of the war in Ukraine.
In its new filing Shell argued that while the legal hurdle to challenge arbitration decisions is high, it believed such an appeal was justified because Venture Global withheld crucial evidence.
A Shell spokesperson confirmed the filing, which was dated November 10.
Shell and other firms, including BP, Edison and Galp, filed arbitration claims starting in 2023.
They accused Venture Global of profiting from the sale of LNG on the spot market while not providing the firms with their contracted cargoes from the Calcasieu Pass export facility in Louisiana.
Shell lost its case in August, while BP won its case in October.
Venture Global did not immediately respond to a request for comment on Tuesday about Shell’s challenge.
Shell said in the new filing that Venture Global earned more than $20bn from selling more than 400 LNG cargoes on the spot market between 2022 and 2025 before declaring commercial operations — and before deliveries to longer-term contract holders had started in April this year.
Shell referred to BP’s win in the legal filing. BP won its arbitration case with an argument of unfair behaviour by the US company, citing five sources close to the matter.
Combined claims from customers amounted to $5.5bn, Venture Global said last January before it won the case against Shell, lost against BP and settled with China’s Unipec.
Venture Global argued that its Calcasieu Pass LNG plant in Louisiana was still in start-up mode and therefore not obliged to sell cargoes under long-term contracts, Reuters previously reported, citing a source.
Venture Global argued that the plant only became fully operational in April this year once it was approved by regulators and lenders to do so, the same source 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 [International Chamber of Commerce] arbitration rules,” Shell said in an emailed statement.
Reuters
