SHELL SUES VENTURE GLOBAL IN US COURT FOR CONTRACT BREACH
Read Time:2 Minute, 30 Second
Shell PLC has filed an action against Venture Global LNG (VGL), an LNG exporter based in the United States, alleging that it breached a contract to supply LNG cargoes after restricting the supply of liquefied natural gas (LNG) to its clients.
Likewise, Nigeria LNG may face sanctions from a UK High Court for a similar breach of an LNG supply contract.
Both Venture Global LNG and NLNG have been facing hurdles in the United States and in the United Kingdom for their breach of contract in a relatively similar fashion.
AGAIN, NATIONWIDE BLACKOUT AS NATIONAL GRID COLLAPSES TWICE IN ONE MONTH
AGAIN, NATIONWIDE BLACKOUT AS NATIONAL GRID COLLAPSES TWICE IN ONE MONTH
#hotjist
While Shell Plc filed its claim with U.S. regulators, the NLNG breach, has now been advanced to the UK High Court for further litigation.
Nigeria LNG is challenging the enforceability of the arbitral award’s demand order, issued by the arbitration panel.
According to Reuters report, Shell Plc has escalated its dispute with Venture Global LNG.
It accused the liquefied natural gas producer of restricting supply access to it and other customers while exporting over $18 billion in LNG.
In a letter sent to the Federal Energy Regulatory Commission, Shell requested the commission compel Venture Global LNG to disclose plant commissioning data to clarify the cause of delayed commercial operations.
Shell and other European companies say they contracted with Venture Global LNG but did not get their gas cargoes under long-term contracts.
They alleged that Venture Global LNG has been selling gas from the plant for more than a year to others, costing them billions in lost profit.
On its part, Nigeria LNG was held to be in breach of contract by failing to deliver 19 cargoes under a contract it executed in January 2020.
The cargoes, which were due for delivery between October 2020 and October 2021, have not been delivered.
In pleadings made by NLNG in its Particulars of Claims to the High Court of Justice in England and Wales Commercial Court, it’s breach was confirmed by a final arbitration award dated January 30, 2023.
The arbitration tribunal comprised Mr. John Beechey, CBE, Mr. J. William Rowley, KC and Mr. Nevil Phillips.
Nigeria LNG Ltd., is significantly owned by Shell, Total, and Eni.
An industry expert cited similarities between the disputes involving Venture Global LNG and Nigeria LNG. The source attributed the challenge to the unexpected surge in the LNG market.
“The reason for this surge in disputes may be related to the unexpected turn in losses to highly profitable margins, as high as $90 million per cargo, at the beginning of the Russian Ukraine conflict, post Covid market recovery and a huge demand in Asia and European markets. It is seen as a golden era for LNG cargoes.
“This situation may have prompted numerous defaults on agreements, with major LNG suppliers opting to retain higher margins at the risk of lengthy litigation, the source added.”
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0