Wednesday, 15 October, 2025 / Edition 80

I am truly happy to see that peace has returned to Gaza with the release of the hostages and the negotiated ceasefire. A job well done to President Trump and his team!

Now, let’s get into a must-read energy news story.

P.S. You can find even more of my recent thoughts on upstream energy news and trends at the bottom of this newsletter.

Shangyou Nie

Editor, Well Read

BP Wins Arbitration Over Venture Global LNG

Sven Hansche/ Shutterstock.com

The International Court of Arbitration made a ruling last week in favor of BP over Venture Global (VG) LNG regarding LNG sales from the Calcasieu Pass (CP) project. BP is seeking damages in excess of $1 billion. This ruling went in the opposite direction from an early Shell vs VG arbitration.

Background:

• BP alleged that VG profited by selling its LNG cargos to the spot market for higher prices after the Russian invasion of Ukraine in February 2022 instead of honoring its commitment to supply its long-term contract holders.

• VG argued that the spot cargoes were sold before declaration of Commercial Operations Day (COD), as the company did not enter into a fully operational stage.

• According to VG’s filing, BP sought damages “in excess of $1.0 billion, as well as interest, costs, and attorneys’ fees.”

• In the same filing, VG said that it reached a resolution with an unnamed customer also related to arbitration over the CP facility, but the settlement “has no material impact” on VG.

• According to the WSJ, VG said that its customers knew from the beginning that there would be an extended period to get its CP plant fully operational. Selling cargoes on spot market before delivering to long-term contract holders was part of VG’s business plan.

• In April 2025, three years after first production, VG said that it had completed the “commissioning phase” at its CP plant and started to send cargoes to its long-term contract holders.

• Less than two months ago, a New York-based arbitration court ruled in favor of VG against Shell in a previous arbitration case. Shell said it was “very disappointed” but accepted the ruling.

What’s new:

• According to an SEC filing by VG, the International Court of Arbitration informed VG that a partial final award was issued in favor of BP.

• The arbitration tribunal found that VG “had breached its obligations to declare a COD for the Calcasieu Pass project in a timely manner.”

• The factors that caused opposite outcomes in the two arbitrations are unknown. Contract wording, the two sides’ approaches to arbitration, and the arbitrators involved could each have played a role.

About VG:

• VG is a relative newcomer to the LNG industry. It became a publicly traded company in January.

• The company has an ambitious plan to become the top U.S. LNG exporter by growing its total capacity to 100 million tonnes per annum of capacity by 2030.

  • According to VG, it has 67 million tonnes per annum of LNG production capacity from plants already in operation or under construction.

• Initial support from long-term customers such as Shell and BP was considered critical to helping VG raise funds to build LNG plants.

The impact:

• According to the Financial Times, the monetary damage could be higher than the liability limit of $1.6 billion defined in the share purchase agreement.

  • VG said in its filing that it “does not anticipate that the final award will be subject to the seller aggregate liability cap in the SPA.”

• VG’s share price has dropped 25 percent since the negative news last Thursday.

• According to the Financial Times, VG is among the “top 100 most shorted U.S. stocks,” based on data from S3 Partners.

• As of 13 October, VG’s share price stood at $9.45 per share—62 percent down from its January IPO price of $25/share.

What’s next:

• Remedies will be determined in a separate damages hearing, likely in 2026.

• According to the Financial Times, there are still several arbitrations pending against VG with damage claims between $6.7 and 7.4 billion.

  • China’s Sinopec, Poland’s Orlen, Portuguese energy leader Galp Energia, Spanish oil leader Repsol and neighboring Edition have filed lawsuits against VG.

What they’re saying:

• “With multiple cases to follow, the risk of financial damages will rise, putting stress on the balance sheet and potentially slowing expansion plans,” said Andrew Gillick, managing director and strategist at Enverus.

• “The different arbitration outcomes… highlight how billions of dollars of uncertainty can now hang over LNG contracts entered into with new U.S. LNG players,” said Saul Kavonic, senior energy analyst with MST Financial.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.