Shell Launches Arbitration Against Venture Global Over LNG Contract Dispute
Shell has filed for arbitration against Venture Global LNG, alleging the company failed to deliver liquefied natural gas (LNG) shipments from its Calcasieu Pass facility in Louisiana. The dispute centers on claims that Venture Global’s delays in fulfilling its contractual obligations have resulted in billions in lost profits for Shell and other major energy firms, including BP, Galp, and Repsol.
Shell CEO Wael Sawan disclosed that no LNG shipments had been received under the agreement, a critical component of the project’s financial framework. Venture Global has cited incomplete commissioning of the Calcasieu Pass facility as the reason for the delivery failures—a justification that has drawn skepticism from industry observers.
In addition to Shell’s legal action, several other energy giants have launched similar arbitration cases in the U.S., claiming that the undelivered shipments over the past two years have caused substantial financial harm. Shell has specifically accused Venture Global of profiting unjustly, earning an estimated $3.5 billion from undelivered LNG cargoes.
This high-profile dispute reflects broader tensions in the LNG industry. Notably, Shell’s subsidiary, Nigeria LNG Limited (NLNG), faced a similar legal battle after failing to deliver 19 LNG cargoes under a 2020 agreement. In July 2024, an arbitration panel and the England and Wales High Court ruled against NLNG, highlighting the increasing scrutiny of long-term LNG contracts and the reliability of suppliers.
Venture Global has previously criticized Shell’s performance in LNG projects, a move some view as an attempt to shift blame. However, this ongoing arbitration underscores growing concerns about the enforceability of LNG contracts and the potential impact on global energy markets.
As Shell and other major players seek compensation for their losses, the outcome of this arbitration could set a significant precedent for future LNG contract disputes and the financial risks tied to operational delays.
