Venture Global Sinks After Losing to BP in Fight Over LNG Sales

(Bloomberg) -- Share of Venture Global Inc. plunged the most in seven months after the US liquefied natural gas exporter lost a dispute over the sale of cargoes with one of its key customers, BP Plc.

The stock fell as much as 23%, the most since March, on Friday following a ruling by an arbitration tribunal that Venture Global breached its contract with BP by selling LNG on the spot market from a Louisiana facility rather than to customers that held long-term agreements. BP is seeking more than $1 billion in damages.

“The market is pricing in broader risk of further adverse rulings,” the Schneider Capital Group said in a research note. Unresolved claims could top $5 billion, he said. 

The decision comes just eight weeks after Venture Global prevailed in a similar dispute with Shell Plc, while another customer recently reached a settlement.

The setback heightens uncertainty around Venture Global’s financial exposure as it seeks to become the largest US LNG exporter amid ongoing customer disputes. Other claimants include Poland’s Orlen SA, Portugal’s Galp Energia SGPS SA, Spain’s Repsol SA, Italy’s Edison International, and China’s Sinopec. 

“This always appeared a grey area with the outcome dependent on both the specific wording in the contracts and the arbiter involved,” said Saul Kavonic, an energy analyst at MST Marquee. “A different arbiter and potentially different contract wording saw a different outcome here compared to the similar recent case with Shell that VG won.”

A hearing over damages is expected sometime in 2026, the filing said. Venture Global said it is evaluating all available options, and the ruling does not impact the terms of the contract.

Venture Global’s Calcasieu Pass plant began exports in 2022. Instead of supplying contracted buyers, those customers claim the company sold cargoes on the spot market during a period of record prices. Venture Global cited mechanical issues that delayed full commercial operations. Deliveries to long-term customers began earlier this year.

Shell, Orlen and Repsol are customers of Venture Global’s second export plant, Plaquemines, which is currently commissioning production. Venture Global has signed a flurry of new contracts this year with customers including Germany’s SEFE Energy GmbH and Malaysia’s Petroliam Nasional Bhd from its third plant in Louisiana, known as CP2. The first phase of CP2 has started construction.

“None of the CP1 offtakers want to rip up their contracts – current terms are simply too favorable to walk away from,” said the Schneider Capital Group note.

Uncertainty from arbitration cases cast a pall over  Venture Global’s initial public offering in January. It was the worst-performing major energy market debut in at least the last three decades. The stock fell on its first day, then posted the worst first month of trading out of any new listing in the sector worth over $1.5 billion since at least 1993, falling 39%.

Venture Global shares are now down nearly 60% this year.

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