Shell expects Venture Global LNG sale agreement to be honored
(Reuters) - Top LNG trader Shell expects its sale agreement with Venture Global LNG to be honored and 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 honor 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 honored, and we look forward to being able to realizing that through the appropriate channels."
Last month, Venture Global LNG said it was in full compliance with the terms of its long-term contracts and cited a need for extensive commissioning of its modular facility.
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.
The contract is tied to Calcasieu Pass LNG, the first of Venture Global LNG's three planned facilities. In 2016, Shell agreed to purchase 1 million tons per annum (mtpa) of LNG over a 20-year period from the facility.
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