Shell Plc and Edison SpA say a major US natural gas exporter’s decision to sell winter cargoes for short-term delivery shows that the company is failing to honor its contracts.
(Bloomberg) — Shell Plc and Edison SpA say a major US natural gas exporter’s decision to sell winter cargoes for short-term delivery shows that the company is failing to honor its contracts.
Venture Global LNG Inc.’s Calcasieu Pass liquefied natural gas plant in Louisiana is offering spot cargoes for November 2023 to March 2024, according to a spokesperson for Italian utility Edison. Buyers including Edison and Shell have lodged arbitration cases against Venture Global for delays in supplying contracted shipments from the plant, people familiar with the matter said last month.
Calcasieu Pass began producing LNG in January 2022 and shipped its first cargo by March of that year. Venture Global has said it hasn’t yet sent out shipments under long-term contract because of operational issues with the startup phase, known as commissioning. The company now plans to begin commercial operations at the end of 2024, people familiar with the matter said last month.
Calcasieu Pass continues to honor its contractual commitments and its teams are working to commission the facility as quickly as possible, Venture Global spokeswoman Shaylyn Hynes said in an emailed statement. Some of the company’s customers have misrepresented their confidential long-term contracts and those claims are inconsistent with the deals they signed, Hynes said.
Based on public reports, Venture Global has already sold more than 170 cargoes on the spot market and continues to do so, despite “making no cargoes available to Shell under our long-term contract,” a Shell spokesperson said in an email. “We believe in the sanctity of contracts and expect others to honor their contractual commitment.”
LNG cargoes “should be sold to the foundation customers under the long-term contracts and not to the spot market,” Edison said in a statement. “By these sales VG continues to be in breach of our long term contract and this will be considered within our arbitration proceedings.”
The commissioning stage normally takes weeks or months. Other contractual customers for Calcasieu Pass include BP Plc, Galp Energia SGPS SA, Repsol SA and PKN ORLEN.
(Updates with company comment in fourth paragraph)
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