The global LNG market is watching closely as tensions escalate between Venture Global and Shell.
A battle is brewing between US and European energy companies about the future of the global LNG market.
Today (November 26), we learned that Venture Global (VG), the fastest-expanding company in the U.S. LNG sector, is accusing Shell of waging a “three-year campaign” to hurt the company’s business.
In August, Shell lost an arbitration case against VG for the Calcasieu Pass case. Now, even if the tribunal ordered Shell to pay legal fees to the counterpart VG, the company has nonetheless decided to appeal the arbitration in the New York Supreme Court. This follows another European company, BP, winning a similar case and a $1 billion compensation from VG.
The founders of the American company, Michael Sabel and Robert Pender, described Shell’s decision as “misguided.” They also say Shell’s employees should be very concerned about the company’s behavior, and explicitly accusing the British major of using contractual arrangements signed for Calcasieu Pass’ exports to demonise VG’s current and future projects.
“There’s no question the competition in our industry is fierce, and it’s clear Venture Global is outcompeting the rest,” reads an email sent by VG management to employees.
There is no doubt that Venture Global’s business is a disruptive one in the global LNG sector, as it has outcompeted other American LNG players who have adopted far more conservative and slow-paced developments of export projects.
It might be useful to remind all players that the memory of the energy crisis is still fresh for policymakers and that prolonged commercial spat could have significant political implications, both in the U.S. and Europe.
After all, we are living in the era of the Geopolitics of Natural Gas.
Source: Giovanni Bettinelli (LinkedIn)
The post Commercial tensions add fuel to geopolitical risks in the global LNG market first appeared on Global LNG Hub.