Tribunal rules in favor of Venture Global in Shell contract dispute

An arbitrator has ruled that Venture Global Inc. did not violate its contract to supply Shell plc with liquefied natural gas when it sold product from its Calcasieu Pass plant at spot prices before the facility had started commercial operations.

The Calcasieu Pass project began exporting cargoes in March of 2022 but only marked its commercial operations date this past April, with Venture Global leaders pointing to problems with the construction of its energy infrastructure. But executives with Shell as well as other customers, including China Petroleum & Chemical Corp. and Spain’s Repsol SA, claimed Venture Global was profiteering from high spot rates rather than fulfilling its contracts with them.

“We are pleased with the tribunal’s determination which reaffirms what Venture Global has maintained from the outset—the plain language in our contracts, mutually agreed upon with all of our customers, is clear,” Venture Global said in an Aug. 12 statement. “We have consistently honored these agreements without exception. Our industry and the investors and lenders who underpin it all rely on respect for both the sanctity of negotiated contracts and the experienced, objective regulatory and legal bodies that govern it. These principles will ensure our industry remains dynamic, fair and competitive.”

In a statement of its own, Shell—which loaded its first cargo from Calcasieu Pass roughly three months ago (OGJ Online, Apr. 15, 2025)—said it is disappointed by the ruling but will respect the tribunal’s decision.

“Trust in long-term contracts is the bedrock of the LNG industry and essential for continued investment and sustainable growth,” the company said.

Venture Global quarterly filing

The ruling disperses a big cloud over Venture Global’s finances: In their quarterly filing with the Securities and Exchange Commission, submitted just hours before word of the arbitrator’s decision, executives said the company faces a potential liability of $1.6 billion under its sales and purchase agreements but that some customers were claiming even greater damages. In all, they said, “the remedies sought by these customers include damages ranging between $6.7 billion and $7.4 billion.”

On a conference call with analysts and investors, Venture Global chief executive officer Mike Sabel called the Shell arbitration proceeding “unnecessary distraction” and said he’s confident in similar rulings on the company’s contracts with other customers.

“It’s the same contracts and the facts around construction an the facts around the completion of the facility are all the same,” he said.

The Shell news helped lift shares of Venture Global (Ticker: VG): Around midday on Aug. 13, they were up more than 8% to $13.19. Over the past 6 months, though, the stock is still down about 13%, which has cut its market capitalization to about $32 billion.

Venture Global's second-quarter results showed that the company shipped a record 89 cargos during the 3 months ended June 30, more than double the 36 of the same period in 2024, and sold 329 trillion btu during the quarter.

Operating profits nearly tripled to $1.04 billion and revenues rose to $3.1 billion from $1.1 billion but net income growth was stymied by a $112 million loss on interest-rate swaps compared to that line item contributing $176 million to profits in second-quarter 2024.

For the current quarter, Sabel and his team have contracted to ship 95 cargos from Venture Global’s operations at Calcasieu Pass and Plaquemines. The latter is expected to achieve COD in two phases, late next year and in mid-2027. In all, they are forecasting that the two plants will export 371-389 cargos for all of 2025.