Venture Global is facing unprecedented US$6 billion arbitration claims from its first LNG plant’s buyers and contractor while the US-based producer’s second LNG export project in Plaquemines is in the final stage of starting operations.
Venture Global is facing unprecedented US$6 billion arbitration claims from its first LNG plant’s buyers and contractor while the US-based producer’s second LNG export project in Plaquemines is in the final stage of starting operations.
Venture Global has been in deep dispute with its main LNG buyers, including BP, Shell, Edison, Repsol, Galp Energia and others since nearly 2-year ago over its “deliberately” delaying the commercial operations date (COD) of the Calcasieu Pass LNG project, which the European buyers believe have "detrimental consequences" for energy security in Europe at a “critical time”.
Venture Global has repeatedly rejected the buyers’ claims saying its plant has not been fully operational due to faulty power equipment that was being repaired and it is entitled to sell "commissioning" cargoes for its own accounts under the contracts.
The US Federal Energy Regulatory Commission (FERC) has backed Venture Global LNG and said that the operator has taken "adequate" measures to fix "equipment problems" at its Calcasieu Pass LNG export project as these problems have kept the operator from delivering cargoes to long-term contract customers for two years.
In addition, the project’s EPC contractor Kiewit has filed a claim for arbitration against the company related to the build-out of the plant.
The cases are pending with the International Chamber of Commerce and the London Court of International Arbitration.
Shell has confirmed that it is starting arbitration hearings over the supply of LNG from the Calcasieu Pass facility. "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 CEO Wael Sawan said in October.
The 11.25 MMT/Y Calcasieu Pass facility exported its first LNG cargo to France in March 2022 and remains in the commissioning mode so far as Venture Global has been selling all cargoes in the spot markets and earned billions of dollars.
Meanwhile, Venture Bayou LNG ship has berthed at Plaquemines LNG to ship the plant’s first commissioning cargo from the 13.3 MMT/Y facility.
The US FERC has already given Venture Global permission to introduce natural gas into its new LNG export plant in Louisiana.
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