London — Top LNG trader Shell expects its agreement with Venture Global LNG to supply liquefied natural gas to be honoured, but does not see this happening at the moment, CEO Wael Sawan said on Thursday.
Earlier this month, Reuters reported that Shell and BP have separately filed for arbitration against U.S. exporter Venture Global LNG for failing to supply contracted cargoes, even as it sold to non-contract customers as prices soared, four people familiar with the matter said.
“We have an existing agreement and a contractual obligation on both sides. We expect both sides to honour that agreement, at the moment we don’t see that happening,” Sawan said during Shell’s news conference to present second-quarter earnings.
“We’re taking the appropriate measures to be able to protect our rights,” he said. “In particular in times like this when we are trying to make sure that LNG is flowing around the world to meet the needs of many, I think we need to be able to make sure that all agreements are honoured, and we look forward to being able to realizing that through the appropriate channels.”
Shell agreed in 2016 to purchase 1 million tonnes per annum (mtpa) of LNG over a 20-year period from the Calcasieu Pass LNG in Louisiana, the first of Venture Global LNG’s three planned facilities.
“Venture Global remains in full compliance with our long-term contracts, including with respect to timing,” the company’s spokeswoman Shaylyn Hynes said in an emailed statement.
Venture Global LNG has previously said the plant’s on-site power supply facility required extensive repairs that will prevent contract deliveries from the first phase until early 2024.
Shell and BP missed out on billions of dollars in sales that went to Venture Global LNG because they were unable to get their contracted fuel, one of the people familiar with the arbitration filings told Reuters earlier this month.
(Reporting by Marwa Rashad, additional reporting by Curtis Williams, Shadia Nasralla and Ron Bousso; Editing by Susan Fenton and Marguerita Choy) – Reuters
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