Shell Joins BP in Escalating Dispute With Major US Gas Exporter

Shell Plc has joined forces with rival BP Plc in intensifying their dispute with Venture Global LNG Inc., taking the matter to the Federal Energy Regulatory Commission (FERC) and urging regulatory intervention in the ongoing feud with the natural gas exporter. In a filing dated Tuesday, Shell called on the FERC to initiate a legal proceeding aimed at disclosing privileged documents that would shed light on the reasons behind Venture Global's delayed full commercial startup of its export plant in Louisiana. This move follows a similar complaint lodged by BP with the FERC last month. Additionally, both Shell and BP, alongside other customers of Venture Global, have previously filed arbitration cases against the gas supplier in both New York and London.

Despite Venture Global commencing operations at its Calcasieu Pass liquefied natural gas (LNG) plant in Louisiana nearly two years ago, the company has yet to fulfill its long-term contracts, opting instead for spot market transactions. Operational issues have been cited as the cause for the delay in providing full service. Both Shell and BP have alleged in their filings that Venture Global has generated more than $18 billion from LNG cargoes that were contractually bound for customers.

Venture Global spokeswoman Shaylyn Hynes criticized the actions of BP and Shell, characterizing them as "unseemly behavior." Hynes emphasized that the regulatory process was not intended to exert commercial pressure on contractual matters. She reiterated Venture Global's commitment to transparency and compliance with contractual and regulatory obligations, dismissing BP's claims as "baseless and demonstratively false" in a filing on January 2. According to Venture Global, they have consistently kept the FERC informed about technical issues, and the unique design of their plant necessitates a more extended commissioning process compared to other export terminals.

In its filing, Shell also included a comparison of commissioning cargoes shipped from U.S. LNG facilities since 2016. The data presented alleged that Venture Global has exported more commissioning cargoes than any other U.S. facility, surpassing the closest competitor by nearly a factor of 10.

The escalating dispute underscores the complexity and challenges within the LNG industry, where major players such as Shell and BP are seeking regulatory intervention to address issues related to contractual obligations and operational delays. Venture Global, on the other hand, maintains its commitment to transparency and compliance, emphasizing the unique challenges associated with the commissioning process for its LNG plant. As the regulatory process unfolds, the LNG landscape is likely to witness further developments that will impact the dynamics between gas exporters and major energy companies.