Shell accuses US firm of ‘wrongfully earning’ $3.5bn

Shell has accused US gas company Venture Global of wrongfully earning $3.5bn after delivering liquefied natural gas (LNG) shipments to higher-priced spot markets.

The Financial Times reports that Shell’s accusation comes following a commodity price spike after Russia invaded Ukraine in February 2002.

“Shell says Venture Global wrongfully earned $3.5 billion by breaching an LNG supply contract,” FT reports.

“Shell LNG is a major shareholder of Nigeria LNG, which is involved in a similar dispute.

“Incidentally, Shell’s partner, NLNG, was also sanctioned by a London arbitration tribunal and the high court of justice of England and Wales for a similar breach of an LNG supply contract.

“NLNG is accused of failing to deliver contracted cargoes owing to unprecedented and historical improvement in LNG spot prices.

“The British multinational is alleging that Venture Global LNG, the US gas giant, redirected gas shipments to higher-priced spot markets instead of keeping its long-term contracts with European customers.”

According to the Financial Times, Venture Global LNG had earlier condemned Shell for its poor performance track record at its LNG facilities.

It added that industry watchers are drawing a parallel between Venture Global’s allegation with NLNG’s London arbitration and court cases, where it was found that it breached a contract for failing to deliver 19 cargoes of LNG, a contract it executed in January 2020.

According to FT’s report, the arbitration panel was made up of John Beechey, J William Rowley and Nevil Phillips.