Poland's Orlen prepares arbitration claim against Venture Global LNG
Reuters
Published Nov 15, 2023 20:05
Updated Nov 15, 2023 21:05
By Marek Strzelecki and Curtis Williams
WARSAW/HOUSTON (Reuters) -Polish oil and gas firm Orlen is preparing to file for arbitration against U.S. exporter Venture Global LNG for failing to supply contracted cargoes, three sources familiar with the matter told Reuters. "I know that this is being considered, I know that there were preparations to file a claim," one person said on condition of anonymity. Two other people confirmed that Orlen is considering a claim. Orlen's press office declined to comment on the matter. A Venture Global spokesperson was not immediately available for comment.
Shell (LON:RDSa), BP (LON:BP), Edison and Repsol (BME:REP) earlier this year filed arbitration cases against the U.S. developer over its failure to supply cargoes from a plant that has been running since March 2022. Venture Global LNG has rejected the claims and said the Louisiana plant is not fully operational due to faulty power equipment that is being repaired. It is allowed to sell "commissioning" cargoes for its own accounts under the contracts. The U.S. company has sold more than 200 cargoes into the spot market at higher prices than would be provided under the long-term contracts. That has Shell and other customers saying the firm has used the equipment problems to capitalize on the rally in global gas markets since Russia’s invasion of Ukraine for its own sales.
Orlen has 20-year agreements with Venture Global to acquire 5.5 million metric tons per annum (MTPA) of LNG between the U.S. firm's Calcasieu Pass and Plaquemines LNG export facilities.
The Polish company agreed to purchase 1.5 MTPA from the Calcasieu Pass facility and 4 MPTA from Plaquemines LNG when it completes construction in late 2024, making it one of Venture Global's largest customers.
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Written By: Reuters
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