Venture Global responds to Shell's fraudulent claims in LNG arbitration

Venture Global responded late Tuesday night to Shell's legal challenge over the oil major losing an arbitration case involving liquefied gas cargoes. They rejected Shell's allegations of fraud and accused Shell of violating arbitration confidentiality.

The legal documents filed in New York Supreme Court are the latest in a long saga about Venture Global's alleged failure to deliver LNG in accordance with long-term contracts, while selling LNG on the spot market at a time when prices were soaring after Russia's invasion in Ukraine.

Shell, BP and Edison are among the companies that have filed arbitration cases against Venture Global. These claims will begin in 2023. Shell lost in August while BP won their case?inOctober. Unipec settled its case. Sources told us that this was the case.

Shell challenged the arbitration decision last month, claiming that a "third party" had testified that Venture Global abruptly delayed the start of the Calcasieu Pass plant. Shell claimed it had asked arbitrators to "study" that communication but Venture Global avoided disclosure through misleading statements.

In its filing of Tuesday, Venture Global stated that Shell did not provide any evidence to support the fraud allegations. The third party was not named, but it said that the written communication between Venture Global and this person "was not corroborated by any other witness". It also stated that Venture Global's legal counsel had not made misleading statements.

In the filing, Shell also claimed that it had violated arbitration confidentiality by sharing information with Venture Global and its counterparties.

Shell did not respond immediately to a comment request.

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Shell's arbitration case centered around cargoes coming from Venture Global Calcasieu Pass. Shell has also signed a long-term agreement with Venture Global Plaquemines.

Venture Global filed a legal document in which it included an email purportedly from a Shell executive whose name had been redacted. The email indicated an interest to reach a?commercial resolution.

Shell's executive said in an email sent to Venture Global on the day that the oil giant filed its lawsuit, "We are still interested in finding a solution for the CP (Calcasieu pass) and Plaquemines cases. I would welcome a discussion at your earliest opportunity."

In the email, the Shell executive told Venture Global that the outcome of the arbitration between BP and the LNG producer raised serious concerns about the evidence that was presented and that Shell's arbitration would have been better decided using the same criteria.

Venture Global shares have also fallen 22% since Shell filed the challenge last month. The shares are now hovering around $6.56, a record low. They were $24 per share when they first began trading in January.

It was reported previously that Venture Global had acted unfairly in its argument to win BP's arbitration case. This information came from five different sources.

Legal experts said that Shell's challenge was based on BP winning the arbitration in October.

Claudio Steuer, Oxford Institute for Energy Studies said that Shell referencing BP’s victory (in its challenge), signals that similar fact patterns led to different tribunal results. This strengthens Shell's case that full access to evidence is important. (Reporting and editing by Nia Williams, Stephen Coates and Curtis Williams. Marwa Rashad provided the reporting; Curtis Williams edited it.)

(source: Reuters)