The three supermajors that are suing Venture Global for breach of LNG delivery contracts have attacked again, asking U.S. regulators to be allowed to voice their position on Venture Global's plans to further delay the official launch of its Calcasieu Pass LNG plant.
Venture Global has been allowed to delay the commissioning of the Calcasieu Pass facility for one year by the Federal Energy Regulatory Commission but that permit expires soon. Venture Global wants to renew it for another year. The Big Oil companies appear to be of a different opinion and they want to voice their concerns.
Shell told Reuters that Venture Global's conduct was very concerning and that it "intends to file comments or a protest in response."
BP, Shell, and Repsol all have long-term delivery contracts with Venture Global. However, the U.S. company has claimed its only existing LNG facility is not yet fully operational. This has, according to Reuters, allowed Venture Global to sell cargoes on the spot market instead of delivering them to BP, Shell, and Repsol. It has made billions from this strategy.
This prompted the three to file arbitration suits against Venture Global in response to Venture Global's decision to withhold contracted cargos.
The three supermajors, along with two other European energy companies, were foundation buyers for the Calcasieu Pass facility, meaning they provided Venture Global with the money to build the place in Louisiana in exchange for a commitment from the company to supply them with certain volumes of LNG over a long-term period.
The facility has a capacity of 10 million tons, and it started producing in early 2022-right on time for Europe, which was beginning to experience a shortage. But instead of honoring its contracts with the European buyers, Venture Global chose to sell more LNG on the spot market.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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