Venture Global has consolidated its position in the liquefied natural gas sector. liquefied natural gas after obtaining a favorable ruling in a new LNG arbitration against Spanish company Repsol. This is the second legal victory for the U.S. firm against European energy majors, amid questions about its compliance with long-term supply contracts.
LNG arbitrage and contractual dispute in the spot market
The dispute stemmed from Venture Global’s strategy of selling LNG cargoes on the spot market during the period leading up to the official commissioning of its Calcasieu Pass plant in Louisiana.plant in Louisiana. Companies such as Shell, BP and Repsol argued that these volumes should have been used for contractual commitments already signed.
However, the arbitral tribunal found that Venture Global acted as a “reasonable and prudent operator” and that, according to the contractual terms, the actual delivery obligation began only after the plant was formally commissioned. This allowed the company to market cargoes at higher prices in a context of global energy volatility.
Impact on Plaquemines and investor confidence
The decision comes at a key moment for the company, which is moving forward with its second major project: the Plaquemines plant. Although the arbitrations generated doubts in the market, Venture Global informed its customers that it will not start exports before the official commissioning of this facility.
The intention is to mitigate the concerns of those who have already invested in Calcasieu Pass and are also participating in this new infrastructure.
How the gas crisis has affected decisions
During the European energy crisis that began in late 2021 and was exacerbated by the conflict in Ukraine, Venture Global achieved significant revenues from the price of LNG on the international market. This situation influenced its decision to take advantage of contractual flexibility while completing the regulatory certification process.
This new court victory strengthens Venture Global’s legal position and also reopens the debate on the interpretation of contracts in energy infrastructure projects. As the European European demand for LNG remains high, the case could set precedents on delivery terms in the development of new terminals.
In the meantime, Venture Global’s performance in this area could influence future commercial negotiations, both with European clients and with regulatory authorities in the United States.
Source: Venture Global
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