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BP to defend its rights in dispute with Venture Global LNG; other clients weigh options
Home > Top Stories > BP to defend its rights in dispute with Venture Global LNG; other clients weigh options
Global Banking & Finance Review®
Company
By Ron Bousso, Curtis Williams and Andrei Khalip
LONDON/HOUSTON/LISBON (Reuters) -BP will defend its rights “to the absolute fullest” in an arbitration case against U.S. exporter Venture Global LNG over failing to supply contracted cargoes, Chief Executive Officer Bernard Looney said on Tuesday.
Oil companies Shell and <BP BP.L> have separately filed for arbitration against Venture Global LNG over failing to supply contracted cargoes, even as it sold to non-contract customers while prices were soaring.
“You can expect us to defend our legal rights to the absolute fullest,” Looney told Reuters in response to a question on the arbitration.
Venture Global’s spokesperson Shaylyn Hynes on Tuesday said the LNG exporter is fulfilling the terms of its contracts with customers.
“Venture Global remains in full compliance with our long-term contracts, including with respect to timing,” Hynes said.
Shell and BP filed their cases at the London Court of International Arbitration.
A similar case was brought by Italian utility Edison in May, while another Venture Global LNG contract customer, Spanish energy firm Repsol, has asked U.S. regulators to release confidential records that would shed light on the plant’s startup.
Portuguese oil company Galp Energia, which signed a 20-year contract with Venture Global LNG for 1 million tonnes per year, is weighing options, said Rodrigo Vilanova, Chairman and CEO of its unit Galp Trading.
Vilanova said the company is disappointed, as Venture Global has already produced and sold more than 170 LNG cargoes, according to publicly available information.
“We understand all those cargoes… have been sold in the short-term market to whoever pays more, as opposed to delivering under the long-term contracts signed by foundational customers such as Galp, who helped underpin the project,” he said during a call with investors.
Galp does not expect to receive any cargoes from Venture Global this year, the executive added.
All contracts in dispute were tied to the Calcasieu Pass LNG facility, the first of Venture Global LNG’s three planned plants. It stitched together 18 liquefaction units to produce up to 12 million tons per year of the supercooled gas.
However, the plant’s onsite power supply facility required extensive repairs that will prevent contract deliveries from the first phase until early 2024, Venture Global LNG has said.
(Reporting by Ron Bousso in London, Curtis Williams in Houston and Andrei Khalip in Lisbon; Editing by Louise Heavens, Jonathan Oatis and Gerry Doyle)
LNG stands for liquefied natural gas, which is natural gas that has been cooled to a liquid state for ease of storage and transport.
Corporate governance refers to the systems and processes that direct and control a company, ensuring accountability, fairness, and transparency in a company's relationship with its stakeholders.
Energy technology encompasses the various methods and systems used to produce, store, and utilize energy, including renewable energy sources and energy efficiency technologies.
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