Shell-Venture Global LNG Clash: Arbitration Defeat Sparks New Battle

Shell plc SHEL recently suffered a significant arbitration defeat related to LNG supply contracts with U.S. producer Venture Global, Inc. VG. The International Chamber of Commerce ruled in favor of Venture Global, ordering Shell to cover the company’s legal fees. The case stemmed from Venture Global’s failure to deliver contracted LNG while selling cargoes on the lucrative spot market during the 2022-23 price surge triggered by Russia’s invasion of Ukraine. Venture Global, which is still ramping up operations at its Calcasieu Pass facility in Louisiana, sold more than 400 LNG cargoes into the spot market rather than fulfilling deliveries under long-term contracts signed with major buyers such as Shell, BP p.l.c. BP and others.

Shell Pushes Back in Court

Despite the setback, Shell, currently carrying a Zacks Rank #3 (Hold), has challenged the ruling in the New York Supreme Court. The company argues that Venture Global withheld crucial evidence during arbitration — specifically documents relating to the delayed commercial start-up of the Calcasieu Pass LNG facility. Shell claims that undisclosed communications with a third party may have influenced testimony and compromised procedural fairness, prompting the appeal.

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Venture Global’s Response & Market Impact

Venture Global maintains that the arbitration process was fair and rejects Shell’s claims as an attempt to overturn a unanimous decision. The company asserts that Calcasieu Pass remained in start-up mode until April 2025, and thus was not obligated to fulfill long-term contracts earlier. Meanwhile, Venture Global’s stock dropped sharply, reflecting investor concerns amid ongoing litigation and past market volatility.

Shell’s Challenge in Supreme Court Follows BP’s Recent Win

In October 2025, the International Court of Arbitration ruled in favor of BP in the arbitration proceeding and determined that Venture Global had breached its contractual obligations. The ruling in favor of BP came as a surprise after Shell recently faced a defeat in a similar arbitration case against Venture Global in August. However, BP’s win raises concerns regarding other arbitration claims pending against the LNG operator. The U.K.-headquartered energy major is reportedly seeking over $1 billion in damages, along with interest and legal costs.

Broader Implications for LNG Contracting

The Shell-Venture Global dispute is unfolding alongside similar battles with BP and other global buyers, with total claims previously estimated at $5.5 billion. BP’s recent win in its arbitration case against Venture Global added further pressure. As the case proceeds through the courts, it highlights growing tensions between LNG producers and buyers over delivery obligations and transparency — issues likely to shape future long-term LNG agreements.

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

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