Venture Global breached LNG supply deal with Galp, tribunal rules

Oct 8 (Reuters) - Venture Global said on Thursday an arbitration tribunal found its Calcasieu Pass unit breached an LNG supply agreement with Portugal's Galp, marking the second setback for the firm over cargo deliveries from the project.

BP is the only other company to have prevailed in arbitration proceedings against Venture Global, as the US exporter dealt with a string of disputes with long-term LNG buyers, which also included Shell, Repsol, Italy's Edison and Poland's Orlen.

Venture Global faces potential damages of billions of dollars from the disputes. The company has argued the spot sales were permitted, but two arbitration panels have now disagreed.

Venture Global won its arbitration cases brought by Shell and Repsol, and subsequently defeated a court challenge related to the Shell arbitration award. It settled with Italy's Edison earlier this year, with Venture Global agreeing to supply additional LNG cargoes beyond those required under their long-term contract.

Its only outstanding arbitration is with Poland's Orlen, which is expected to be resolved by the end of the year.

The buyers accused Venture Global of selling cargoes on the spot market at higher prices following Russia's invasion of Ukraine instead of delivering contracted volumes from initial production at the Louisiana plant.

Venture Global argued the spot sales were allowed as faulty power-island equipment delayed the start of commercial operations.

Galp did not respond to a request for comment on the ruling. 

The amount of money Venture Global will have to pay to Galp will be determined in a separate damages hearing expected in 2027 or 2028, with any final award not exceeding $170 million under the seller aggregate cap agreement, Venture Global said in its regulatory filing on Thursday.

Capital One said in a note on Thursday that it views the $170 million liability cap as "relatively immaterial."

Venture Global shares were up more than 2% at $13.34 at midday on Thursday.

Venture Global added that one of the three arbitrators at the International Chamber of Commerce tribunal dissented and that it is evaluating its options while continuing to defend its position.

The company also said the ruling does not affect the agreement currently being performed by the parties and noted it has delivered 20 cargoes to Galp since Calcasieu Pass reached commercial operations.

After BP won its arbitration case in 2025, Venture Global said in its annual report that the British firm is seeking at least $3.7 billion in damages, though the claim could exceed $6 billion before interest, costs and fees.

(Reporting by Varun Sahay in Bengaluru, Stephanie Kelly and Shadia Nasralla in London and Curtis Williams in Houston; Editing by Vijay Kishore and Matthew Lewis)