Shell's legal battle against Venture Global is centered on communication with the engineer, a court transcript shows

Shell's appeal against its arbitration loss to liquefied gas producer Venture Global centers on possible communications between the U.S. company and independent engineer Lummus Consultants. A draft court transcript, seen by shows, details these potential communications.

The transcript of a New York Supreme?Court?hearing on January 12 includes more details about Venture Global's long-running battle with oil giant Shell and Lummus's appointment as a witness in arbitration proceedings.

Shell lost an arbitration last year over cargoes coming from Venture Global's Calcasieu Pass plant. Shell challenged the arbitration result by claiming that a third-party had testified that Venture Global abruptly decided that it would delay the commercial launch of its Calcasieu Pass LNG plant.

Shell said that it also asked arbitrators for a study of communication between Venture Global, and a?third-party - an independent engineering firm - regarding the progress of Calcasieu pass. Venture Global avoided disclosure because they made misleading statements. Venture Global denies that its counsel made "misleading" statements.

Shell asked for clarification during arguments on January 12, whether Venture Global and the independent engineer who was responsible for overseeing construction of Calcasieu Pass exchanged emails in 2022. Shell also requested that the court determine if any draft reports, comments or emails were sent between Venture Global and the independent engineer.

The transcript shows that a Venture?Global representative stated during the hearing that the independent?engineer is Lummus. Lummus was not named previously as Venture Global's Independent Engineer.

Lummus has not responded to our requests for comment. Shell and Venture Global declined to comment.

Justice Joel Cohen who presided over the case said that there may have been communication between Venture Global, the independent engineer and Calcasieu Pass Plant, but he was sceptical about whether such a document would be able to be used as a basis for overturning an arbitration award based on many other documents.

The transcript of the hearing shows that the judge asked: "Why would it be reasonable to believe that this kind of communication between the consultant and the respondent could wipe out all these independent and alternate grounds for their coming to the conclusion they did?"

Shell claimed that the communication between Venture Global, the engineer and Shell were crucial because the arbitral panel heavily relied on the testimony of the independent engineer to rule in favour of Venture Global.

Venture Global stated during the hearing on January 12, that the arbitration lasted 27 months and involved approximately 130,000 pages of documents. The parties paid over $41,000,000 in fees and costs. The company also said that the arbitrators had "rejected Shell’s request for discovery three times."

Shell asked the court for a retrial of the arbitral panel's ruling, despite the fact that the LNG company had provided all the documents requested.

The decision of the judge is still pending.

Shell claims that Venture Global did not deliver LNG as per long-term agreements, but instead sold on the spot markets when prices rose after Russia's invasion in Ukraine. Venture Global denies the allegations, claiming that it was delayed in moving to commercial operations due to a faulty electrical system which did not allow Calcasieu Pass to operate optimally.

(source: Reuters)