Shell has initiated arbitration hearings with Venture Global LNG over the supply of liquefied natural gas (LNG) from the Calcasieu Pass facility, according to CEO Wael Sawan.
The dispute centers around Shell’s claim of not receiving the contracted LNG volumes, which have significantly impacted the financial viability of its long-term contracts.
Sawan confirmed the arbitration process during a call with Reuters analysts, stating, “Frustratingly, we have got no volumes against our term agreement which underpinned the financing for the project. We’re going through arbitration hearings this quarter.”
Shell, along with other companies including BP, Galp, and Repsol, has filed arbitration cases in the U.S. after being unable to obtain contractually promised LNG cargoes for over two years.
The companies claim to have lost billions in potential profits due to the unfulfilled gas shipments, a situation that Shell argues is a result of Venture Global’s failure to fully commission its Louisiana facility.
Meanwhile, Venture Global contends that it is not yet able to meet the supply obligations, pointing to the incomplete status of the plant.
This dispute echoes a similar legal issue involving NLNG, a subsidiary of Shell, which faced arbitration after breaching a contract by failing to deliver LNG cargoes in 2020.
A ruling against NLNG was handed down in July 2024 by the London arbitration panel and the England and Wales High Court of Justice.
In its claim, Shell also accuses Venture Global LNG of wrongfully profiting $3.5 billion due to the non-delivery of LNG as agreed.
This development marks the latest in a series of ongoing legal battles in the LNG sector, highlighting tensions between major players over missed contracts and the financial stakes tied to long-term energy agreements.