Shell suffers setback in Venture Global LNG saga

Shell suffered a setback in its stated attempt to hold Venture Global liable for failing to deliver contracted LNG volumes when a court refused access to the very large commissioning documentation of the Venture Calcasieu Pass facility.

Shell and half a dozen other European energy majors have requested commissioning documents about Venture Global’s LNG facility from the Federal Energy Regulatory Commission, and the commission has granted access to some of them. However, an administrative judge appointed by FERC to hear the case denied access to some of that documentation, arguing that Venture Global was only required to turn over non-public documents before January 2022.

The judge’s ruling is the latest scene in an ongoing saga in which Venture Global colluded with the companies that funded the construction of its Calcasieu Pass facility. The company made billions from selling LNG on the spot market, while Shell and company failed to honor their long-term contractual obligations to them, causing them huge losses.

The way Venture Global did this was by using a loophole that meant it could sell its product on the spot market before the production facility was completed. In order to keep the spot market active, Venture Global delayed the official completion of Calcasieu Pass as long as it could. Now that investors are suing, they may run out of reprieve.

Last month, Shell said Venture Global made about $3.5 billion from selling LNG on the spot market when it should have supplied it under its long-term contracts. This, Shell claimed, caused serious LNG supply difficulties for the unnamed company, which had to resort to sourcing gas from five other US producers, incurring additional costs of $1.5 billion. According to an FT report, Poland’s Orlen was the company with the most exposure to Venture Global gas.

By Irina Slav for Oilprice.com

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