Exclusive-Shell challenges Venture Global arbitration decision in New York Supreme Court

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By Francesca Landini and Stephanie Kelly

LONDON (Reuters) -Shell has challenged its defeat in an arbitration case against U.S. liquefied natural gas producer Venture Global in the New York Supreme Court, according to a legal filing seen by Reuters, weeks after rival BP won a similar $1 billion-plus arbitration.

The arbitration cases were over Venture Global’s failure to deliver liquefied natural gas under long-term contracts while selling on the spot market as prices soared after the outbreak of the war in Ukraine.

Shell, in its new filing, argued that, while the legal hurdle to challenge arbitration decisions is high, it believed such an appeal was justified because Venture Global held back crucial evidence.

A Shell spokesperson confirmed the filing, which was dated Monday.

Shell and other firms including BP, Edison and Galp filed arbitration claims starting in 2023.

They accused Venture Global of profiting from the sale of LNG on the spot market while not providing the firms with their contracted cargoes from the Calcasieu Pass export facility in Louisiana.

Shell lost its case in August, while BP won its case in October. 

Venture Global did not immediately respond to a request for comment on Tuesday about Shell’s challenge.

Shell said in the new filing that Venture Global earned more than $20 billion from selling over 400 LNG cargoes on the spot market between 2022-25 before declaring commercial operations – and before deliveries to longer-term contract holders had started in April this year.

Shell referred to BP’s win in the legal filing.

Reuters previously reported that BP won its arbitration case with an argument of unfair behaviour by the U.S. company, citing five sources close to the matter.

Combined claims from customers amounted to $5.5 billion, Venture Global said last January before it won the case against Shell, lost against BP and settled with China’s Unipec.

Venture Global argued that its Calcasieu Pass LNG plant in Louisiana was still in start-up mode and therefore not obliged to sell cargoes under long-term contracts, Reuters previously reported, citing a source.

Venture Global argued that the plant only became fully operational in April this year once it was approved by regulators and lenders to do so, the same source said.

“We are not able to comment further at this time, as the proceedings will be before the Court in due course and we remain bound by the confidentiality requirements of the contract and ICC (International Chamber of Commerce) arbitration rules,” Shell said in an emailed statement.

(Reporting by Francesca Landini, Stephanie Kelly, Marwa Rashad and Shadia Nasralla; Editing by Joe Bavier and Susan Fenton)