Venture Global LNG, a major U.S. liquefied natural gas exporter, reported on Wednesday that an arbitration tribunal has ruled in its favor in a disagreement with Spain's energy company Repsol. The contention concerned Delivery obligations tied to Venture Global's Calcasieu Pass project under a 20-year supply agreement. Venture Global had initially failed to meet the terms of LNG delivery to Repsol, an issue that was contested in arbitration.
This victory for Venture Global contrasts with a previous ruling on October 9, where British energy giant BP prevailed over the U.S. supplier in a similar arbitration claim adjudicated by the International Chamber of Commerce's International Court of Arbitration. With this win against Repsol, Venture Global now possesses favorable outcomes in two out of three arbitration cases initiated against it by international energy players, having first overcome a claim from Shell, another global energy leader.
Following the announcement of the arbitration decision, shares of Venture Global surged notably, jumping approximately 17 percent in after-hours trading. Prior to the disclosure, the stock had already appreciated around 7 percent during regular market hours on the same day. Venture Global issued a statement expressing satisfaction with the arbitration panel's ruling and reiterated confidence in having met all contractual delivery requirements. The company also affirmed its expectation to ultimately win the remaining pending arbitration cases.
As per official disclosures, the arbitration panel awarded legal fees to Venture Global while Repsol has yet to provide a comment on the decision. In a related development, Shell’s previous arbitration loss to Venture Global back in August is currently being contested in the New York Supreme Court, indicating ongoing legal challenges within this sector.
Other European energy firms, including Italy's Edison and Portugal's Galp, have similarly initiated arbitration proceedings against Venture Global. These companies have accused the U.S. supplier of capitalizing on the recent spike in spot LNG prices following Russia’s invasion of Ukraine, opting to sell cargoes on the spot market rather than fulfill long-term contract deliveries signed years in advance. Notably, Repsol and Galp are reported to have engaged the same law firm for their legal actions against Venture Global. Galp has not yet responded to requests for comment.
Venture Global has consistently denied these allegations, attributing the initial delivery delays to technical issues with an electric system that impeded the full operational capacity of its Calcasieu Pass export terminal in Louisiana. These operational hurdles occurred during the transition to commercial-scale production. The company’s stock price had suffered significantly, dropping approximately 62 percent since its initial public offering last year amid investor concerns over legal disputes and looming supply glut risks.
The original purchase agreement between Repsol and Venture Global was formalized in 2018, under which Repsol agreed to procure one million metric tons of LNG annually for 20 years. The transaction aligns with recent commitments between the European Union and the U.S., where Europe pledged to purchase $750 billion worth of American energy, including LNG, through 2028.