Plants line the lounge at the booth of British multinational oil and gas company BP during the LNG 2023 Energy Trade Show on July 13, 2023 in Vancouver, British Columbia, Canada.REUTERS/Chris Hellgren/File Photo Obtaining license rights
HOUSTON, Nov 11 (Reuters) – BP (BP.L), Edison (EDNn.MI) and Shell (SHEL.L) have announced plans to sell liquefied natural gas exporter Venture Global LNG to U.S. and EU energy groups. pressure to intervene in the conflict. A U.S. company failed to deliver contracted fuel.
The companies filed a complaint with the US-EU Special Committee on Energy Security last month, with Shell executives asking Venture Global LNG to “immediately begin performance” under the signed contract.
The three are among at least four customers of the Arlington, Va., company seeking contract arbitration claims over gas supply shortages. Venture Global LNG announced that its Louisiana plant is not fully operational due to a power equipment defect that is being repaired.
Their complaint aimed to force The Hague and Washington to pressure Venture Global LNG over the contract. In his letter, Shell accused Venture Global LNG of diverting resources to construct a second LNG export plant rather than completing repairs to the first plant.
In a separate letter, BP executive Carol Howle wrote that the action “shaken confidence in the reliability of U.S. LNG suppliers.” He added that authorities should consider whether the power plant should be allowed to operate and export under the rules governing its construction.
No action by special forces
A spokesperson for Venture Global LNG said on Saturday that EU and US officials consider the dispute to be a “contractual matter between commercial parties.” At the task force meeting on October 30, no action was taken in response to Shell’s request.
A Shell spokeswoman said on Saturday that the company did not expect an immediate response from the task force and wanted to alert officials to the potential loss of confidence in U.S. LNG. BP declined to comment beyond the letter. Electric power giant Edison did not immediately respond to a request for comment over the weekend.
Venture Global LNG has told U.S. regulators that its Calcasieu Pass plant is operating at full capacity. It has sold more than 200 shipments worth about $18.2 billion, according to a Reuters tally. These sales resulted in higher prices than those available under long-term contracts with the four companies.
Shell and others claim the company is profiting from rising global gas markets while downplaying changes in Europe’s energy security. They are said to not receive the contract amount until the end of 2024.
Venture Global LNG said BP and Shell bought gas from the plant and sold it outside Europe, citing Europe’s energy security in a letter to the US-EU task force. The company says it is “working diligently towards complete completion.” He did not say when full-scale commercial operations would begin.
According to a document dated November 10, “Shell purchased seven trial cargoes from Venture Global, three of which were traded outside Europe for higher profits. Similarly, BP also purchased six trial cargoes.” “We purchased a trial cargo of 2,000, and 2 were traded to destinations outside Europe.” Letter signed by Venture Global co-chairs Michael Sabel and Robert Pender.
The letter said the exporters had complied with the terms of the contract and the criticism by BP and Shell was an attempt to “litigate this through regulators and the media”.
The appeal to the U.S.-EU Special Committee also follows a proposal by Repsol to ask the U.S. energy regulator, the Federal Energy Regulatory Commission, to reinstate approval for the Calcasieu plant in light of start-up issues. That request was denied.
Reporting by Gary McWilliams.Editing: Diane Craft
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