British oil and gas giant Shell has accused US gas company Venture Global of wrongfully earning $3.5bn, after delivering liquefied natural gas (LNG) shipments to higher-priced spot markets following a commodities price spike after Russia invaded Ukraine in February 2022.
The allegations are surfacing ahead of arbitration hearings Shell and several other energy companies have initiated against Venture Global, a newcomer that has disrupted the global LNG market, as reported by the Financial Times.
These claims mark the most recent development in an uncommon dispute among some leading participants in the LNG sector.
Shell’s claim was based on a study commissioned by Compass Lexicon consultancy, which aimed to determine the extra revenue Venture Global had seemingly wrongfully earned by denying certain European customers their contracted cargoes.
A spokesperson from Venture Global rejected the consulting report as “paid propaganda”, as reported by the FT. There is also no comment about the allegations on Venture Global’s website and it has yet to make any further statement.
The British multinational company also alleged that Venture Global had caused significant LNG sourcing challenges for a specific company, with Shell needing to obtain the gas from five other US producers, incurring additional costs of $1.5bn (£1.14bn) from October 2022 to May 2024.
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By GlobalDataBP and Shell are in a legal dispute with Venture Global LNG, claiming that Venture Global LNG has limited customer access to supplies while exporting more than $18bn worth of LNG, Reuters reported.
In response to the initial filings, Venture Global stated in November that its initial gas transactions had significantly increased the LNG supply to Europe.
According to data from the US Department of Energy, the letter said that approximately 70% of all shipments produced and sent by Venture Global had been transported to Europe and traded with various partners including three of its six long-term clients.
