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Venture Global, the US liquefied natural gas exporter at the centre of a storm over its alleged failure to fulfil contracts, has lashed out at European buyers including Shell and BP for attempting to impair a “major disrupter” by politicising the dispute.
The oil majors are among a host of European energy groups that have launched arbitration proceedings against Venture Global for withholding supplies promised under long-term contracts and instead selling the LNG on the spot energy market.
The company is one of a handful that have rushed to build plants to condense and ship US natural gas overseas, as demand booms in the wake of Russia’s invasion of Ukraine. It claims its modular plant design allows it to liquefy gas at less than half the cost of competitors.
Mike Sabel, Venture Global’s chief executive, said the backlash from some customers was driven by fears of a “historic price change” it was bringing to the market.
“We are a catastrophe for them,” Sabel told the Financial Times. “This is a reaction to this competitive threat and they — as in any market — need to figure out how to be competitive.
“First they ignore you — and we had many years of being ignored. And they ridicule you and call you all sorts of names. And then, when they see you start to execute and have success, then they have to figure out how to slow you down. And we’re at that stage.”
BP said Venture Global’s actions were “a wilful breach of our contract”. Shell said it had been the first to sign a long-term LNG agreement with Venture Global, “allowing them to gain the financing they needed to construct the facility . . . Venture Global’s tarnished name and reputation is the result of a solo act, written and performed by them.”
The spat between Venture Global and European buyers, which also include Spain’s Repsol and Italy’s Edison, has quickly become one of the biggest disputes to hit the US LNG export industry, which has become the world’s biggest supplier since its first shipments seven years ago.
Venture began producing LNG at its Calcasieu Pass plant in Louisiana in 2022 after undergoing rapid construction. But the company has declared “force majeure,” invoking the right to renege on contractual commitments, on the grounds that the plant’s power supply equipment needs repair.
That has spiralled into an increasingly public dispute, with Shell alleging Venture’s actions have allowed the company to reap an $18bn windfall because of a surge in gas prices following Russia’s 2022 full-scale invasion of Ukraine. Sabel said that sum was “overstating it”, but he declined to supply an alternative figure.
Last month the European groups called on Washington and Brussels to intervene, arguing Venture Global had undermined confidence in the US LNG industry and damaged Europe’s energy security.
Sabel dismissed the allegations as “absurd”, noting that the majority of cargo the company had shipped had gone to Europe anyway. He said customers had not lost trust in it as evidenced by recent contracts Venture signed with groups including ExxonMobil, Chevron and the German government.
If it completes its Plaquemines and CP2 projects, also in Louisiana, Venture Global will have an export capacity of more than 65mn tonnes of gas a year, second only to the nation of Qatar, which can produce 77mn tonnes annually with plans to boost volumes to 126mn tonnes by 2027.
That has perturbed market incumbents, said Sabel.
“The supermajors have not successfully executed development and construction of a large-scale project maybe ever,” he said. “So in order for them to grow their portfolio, they’ve been having to grow the trading books, not the production.
“The sportsman response should be: you figure out how to contend better on price,” he added. “That’s the sporting way to do it. Not to say: you guys are violating contracts without giving evidence of contracts.”
