Shell challenges arbitration loss to Venture Global in New York court

Shell has filed a petition in the New York Supreme Court to overturn its defeat in an arbitration case against U.S. liquefied natural gas producer Venture Global, according to documents reviewed by Reuters. The move comes just weeks after BP won a similar $1 billion arbitration against the same company.

Both cases stem from Venture Global’s failure to deliver LNG under long-term contracts while selling cargoes on the spot market at soaring prices after Russia’s invasion of Ukraine.

Shell accuses Venture Global of withholding key evidence

In its new filing, Shell argued that Venture Global withheld crucial documents during arbitration and misled the panel about why it delayed the commercial start of its Calcasieu Pass facility in Louisiana. The oil major said a third party testified that Venture Global abruptly decided to postpone operations, but the company blocked access to communications that could have clarified the decision.

Shell said the missing evidence “goes to the reliability and integrity of witness testimony.” Legal experts told Reuters that the petition does not reopen the case on its merits but asks the court to vacate the award on procedural grounds.

“While a post-award challenge may seem paradoxical, it remains a standard step for a losing party seeking to quash an unfavorable ruling,” said Agnieszka Ason of the Oxford Institute for Energy Studies.

Venture Global dismisses challenge as “desperate”

Venture Global responded that Shell had a “full and fair arbitration process” and called the appeal “another desperate attempt to gain leverage after failing to win through contract or arbitration.”

The company said it will continue signing new customers and expanding its LNG operations, adding that it remains financially strong despite legal disputes. CEO Mike Sabel told investors the firm has enough cash flow to fund growth and handle any arbitration outcomes.

Venture Global’s shares fell 11.3% on the news, dropping close to their April 2024 low. The company has lost about 70% of its market value since going public in January 2024.

Background: a broader LNG industry dispute

Shell’s arbitration loss in August followed several similar claims by energy firms, including BP, Edison, and Galp, over Venture Global’s failure to deliver contracted cargoes from the Calcasieu Pass plant. Venture Global argued that the facility was still in start-up mode and not yet required to supply long-term customers.

Shell’s filing also mentioned BP’s recent victory, in which arbitrators found that Venture Global had acted unfairly. Combined claims from multiple buyers reached $5.5 billion, according to Venture Global’s earlier disclosures.

Shell said it will make no further comment while the matter proceeds in court, citing confidentiality rules under the International Chamber of Commerce’s arbitration framework.