Shell Falls Short in LNG Arbitration Against Venture Global

Shell plc SHEL recently lost a legal arbitration claim over liquefied natural gas (“LNG”) supply disputes as the ruling prevailed in favor of U.S. LNG operator Venture Global, Inc. VG, defeating the former’s claim that the latter had breached contracts to profit from higher spot market prices.

The case is one of several initiated in 2023 by customers of Venture Global, including major energy giants like Shell, BP p.l.c. BP, Sinopec and Galp Energia, SGPS, S.A. GLPEY, alleging that Venture Global withheld contracted LNG cargoes during a period of soaring prices after Russia’s invasion of Ukraine.

London-based oil supermajor Shell is one of the energy multinationals with operations that span almost every corner of the globe. Shell’s long-term strategy revolves around LNG, considering the likely significant demand rise in the near-to-medium term. The company, along with other industry heavyweights BP and GLPEY, recently got entangled in a high-profile public clash against Venture Global and filed damages claims ranging from $6.7 billion to $7.4 billion against the LNG supplier and pursued arbitration through the International Chamber of Commerce.

Dispute Over Contractual Obligations

At the heart of the dispute was whether Venture Global’s Calcasieu Pass facility in Louisiana had reached commercial operations when it sold LNG cargoes on the spot market. Venture Global argued it was not obligated to deliver under long-term contracts during the commissioning phase, on the grounds that the facility’s power supply equipment needed repair.

However, the major oil companies like BP, Shell, Sinopec, Galp, Repsol and Edison, in the capacity of customer, argued that their client, Venture Global, had sold many cargoes even before Calcasieu Pass officially began full commercial operations in April 2025.

Shell’s Response and Industry Concerns

While respecting the tribunal’s ruling, Shell expressed disappointment, emphasizing that trust in long-term contracts underpins LNG investment and sustainable growth. The outcome has sparked broader industry debate about balancing operational flexibility with buyer confidence in supply commitments.

Wider Impact on the LNG Industry

The International Chamber of Commerce’s decision marks a significant financial win for Venture Global and could set a precedent for similar ongoing cases. Analysts note that foundation customers may now push for stricter contractual terms to protect future LNG-supply agreements.

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This article originally published on Zacks Investment Research (zacks.com).

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