HOUSTON (Reuters) -Venture Global has won a legal battle against Shell over its failure to deliver liquefied natural gas under long-term contracts starting in 2023, the U.S. LNG major said on Tuesday.
Firms, including Shell, BP, Edison and Galp, filed arbitration claims starting in 2023, accusing Venture Global of profiting from the sale of LNG on the spot market while not providing them with their contracted cargoes from the Calcasieu Pass export facility in Louisiana.
The companies accused Venture
Global of profiteering by selling commissioning cargoes at higher spot market prices, rather than at long term contracted prices.
"We are disappointed with the outcome but respect the Tribunal's decision," Shell said in a statement to Reuters.
Trust in long-term contracts is the bedrock of the LNG industry and essential for continued investment and sustainable growth, the company statement said.
The tribunal’s determination reaffirms Venture Global has consistently honored its agreements its customers, the Arlington based company said on Tuesday.
Venture Global denied the claim, saying it delayed moving to commercial operations because of a faulty electric system that did not allow the plant to operate optimally.
Earlier on Tuesday, Venture Global said it estimates a penalty of up to $1.6 billion if it loses the arbitration cases, according to its second-quarter earnings report.
Some of the companies involved in the arbitration were pushing for a higher penalty, the report said.
(Reporting by Curtis Williams in Houston, Tanay Dhumal in Bengaluru; Editing by Mark Porter and Stephen Coates)
