BP seeks over £1 billion pounds after arbitration win against Venture Global in LNG supply row

BP is pursuing damages exceeding £1 billion following a significant arbitration victory against the American liquefied natural gas (LNG) producer Venture Global. The case centres on claims that Venture Global breached long-term supply contracts by delaying the official start of commercial operations at its Calcasieu facility in Louisiana, allowing it to sell LNG on the spot market at vastly inflated prices following the Russian invasion of Ukraine.

Venture Global’s Calcasieu facility began producing LNG in January 2022. Contracts with BP, Shell, Galp and Edison stipulated that deliveries at contract prices would commence once the facility was fully operational. However, Venture Global delayed declaring the commercial start until April 2025, far longer than the industry typical commissioning period, citing technical issues with a ‘faulty power island’. This enabled the company to profit from the sharp increase in global gas prices as Europe scrambled for replacements to Russian gas supplies.

BP and other affected companies initiated legal action, accusing Venture Global of breaching its contractual obligations. Notably, BP has succeeded in a phase of arbitration before the International Chamber of Commerce, which found Venture Global failed to declare commercial operation in a timely fashion. The panel’s findings cleared the way for BP to seek over £1 billion in damages, along with interest, legal costs and associated fees, although the exact award is to be determined at a separate hearing anticipated in 2026.

The market reacted swiftly to the arbitration news, with Venture Global shares dropping nearly 18 per cent to $10.33 in New York. Analysts at UBS highlighted that the 39-month commissioning process for Calcasieu was far longer than the industry average of twelve to eighteen months. Citibank analyst Alastair Syme remarked that this outcome provided a further positive narrative for BP’s turnaround, supplementing other recent successes such as the major oil discovery off the Brazilian coast.

Despite its loss, Venture Global maintains that its conduct was in line with regulatory oversight and continues to dispute the tribunal’s decision, promising to explore all available options. The underlying supply agreement with BP remains in place, and fourteen cargos have been delivered to date.

While the outcome of this case diverges from that with Shell—who previously lost on similar grounds—analysts suggest the defining factor may lie in contract language specificity. The judgement boosts BP’s ongoing efforts to rejuvenate its portfolio after a mixed strategy period, underpinning its competitive stance in the global energy market as other claimants, including Edison and Galp, proceed with their own legal actions against Venture Global.