FILE PHOTO: American flags are displayed on screens on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 22, 2025. REUTERS/Jeenah Moon/File Photo
VIRGINIA: Venture Global shares have plunged nearly 25% last Friday to their lowest level in five months after it lost an arbitration case with BP over the US liquefied natural gas (LNG) exporter’s failure to deliver on a long-term gas supply contract, stoking worries of similar verdicts in disputes with other customers seeking billions of dollars in compensation.
The ruling was a surprise after Venture Global’s recent arbitration win against Shell.
BP is seeking more than US$1bil in damages plus interest and legal costs, with the final amount to be determined in a separate hearing in 2026.
Venture Global, the second-largest US LNG supplier, is facing other arbitration claims with customers seeking compensation of more than US$4bil linked to the delayed commercial start-up of the Calcasieu Pass project in Louisiana, according to the company’s 2024 annual report.
The company previously warned that losing current or future arbitration cases could result in significant financial penalties, the termination of some gas supply contracts, and accelerated repayment of project debt.
All of the companies that have filed arbitration are seeking compensation, and none of them have sought to terminate their contracts in their proceedings, Venture Global has said.
It is unclear why the result of the BP arbitration was different from the Shell case and whether the outcome was due to differences in contracts or in the company’s legal strategies.
Deutsche Bank said in a note to clients last Friday that the latest outcome pushed it to revise the risk that Venture Global will face negative decisions from the remaining arbitrations to 50%.
Venture Global told analysts last Thursday that the BP ruling has no impact on its current sale and purchase agreement with the company, according to two people who recounted the call to Reuters.
Gabriel Moreen, a managing director at Mizuho Securities, called the ruling a “negative surprise,” saying it introduces uncertainty for the remaining claims.
“How two arbitrations over the exact same facts and circumstances led to two different outcomes is perhaps more a comment on the arbitrary nature of unilateral decision-making in arbitration hearings than anything else,” JP Morgan analysts wrote in a note to clients last Friday.
Should the company lose the remaining arbitration cases, it could face damages in the vicinity of US$4.8bil.
If it continues to see split results, however, the total damages would be closer to US$2.9bil, the analysts said.
The Venture Global share drop looked set to wipe out nearly US$8bil from the company’s market valuation if current losses hold.
Since the company’s initial public offering in January, its shares have fallen almost 61%. The stock declines also reflect ongoing investor caution over LNG commissioning risks.
Venture Global is expanding its production amid surging global demand, with the US becoming the world’s top LNG supplier in 2023.
In addition to BP and Shell, Italy’s Edison, Portugal’s Galp, Spain’s Repsol, and Poland’s Orlen have filed arbitration claims accusing Venture Global of profiteering by selling LNG cargoes at higher spot market prices, rather than delivering them under long-term contracts.
Edison and Repsol told Reuters they were still pursuing their arbitration cases against Venture Global.
Orlen declined to comment but said it remains in arbitration with the US company. — Reuters
