Venture Global is stated to have breached its obligations by not declaring commercial operations at the Calcasieu Project in a timely manner.
BP has won its arbitration case against Venture Global over the latter’s failure to deliver liquefied natural gas (LNG) under a long-term contract that was set to commence in late 2022.
The International Chamber of Commerce’s International Court of Arbitration issued a partial final award to bp related to LNG sales from the Calcasieu Project, Venture Global stated in a filing with the Securities and Exchange Commission.
This award found that Venture Global breached its obligations by not declaring in a timely manner the commercial operations date of the Calcasieu Project.
Furthermore, Venture Global is stated to have failed to act as a “reasonable and prudent operator” as outlined in the agreement.
BP is seeking more than $1bn in damages, along with interest, costs and attorneys’ fees.
A separate hearing to assess the damages to be paid to bp is expected to take place in 2026. Following this hearing, a final award will be issued.
Venture Global, in its statement, said: “The company is disappointed by the arbitration tribunal’s decision in the proceeding with BP.
“The company is currently evaluating all available options in response to the tribunal’s ruling and will continue to vigorously defend our position.”
BP expressed satisfaction with the results of this phase of the arbitration and is determined to know the amount it will receive due to Venture Global’s breach of contract.
The current bp ruling stands in contrast to a previous arbitration case in August this year, where Venture Global emerged victorious against Shell.
Shell, along with other companies such as bp, Edison and Galp, initiated arbitration claims in 2023, alleging that Venture Global capitalised on higher spot market prices by selling LNG cargoes, rather than fulfilling long-term contract obligations from its Calcasieu Pass export facility in Louisiana, US.
The reasons for the differing outcomes in these two cases remain unclear, according to the Reuters’ report.
Venture Global argued that it was permitted to undertake spot sales due to delays in the start of official commercial operations because of a faulty power island.
Last week, bp started production at the Murlach field in the UK North Sea, its sixth major upstream oil and gas project to start up this year.
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