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Investing.com -- Venture Global Inc. (NYSE: VG) stock fell 15% late on Thursday after the liquefied natural gas (LNG) exporter lost an arbitration dispute with BP Plc (NYSE: BP) over cargo sales from its Louisiana facility.
An arbitration tribunal ruled in favor of BP’s objection to Venture Global selling LNG cargoes on the spot market rather than to customers with long-term contracts, according to a report from Bloomberg News, citing a filing on Thursday. The ruling marks a significant setback for Venture Global, coming just eight weeks after the company had won a similar arbitration case against Shell Plc (NYSE: SHEL).
The decision could have substantial financial implications for Venture Global, as BP is seeking more than $1 billion in damages, the filing noted. This represents a major reversal of fortune for the LNG exporter following its earlier victory against Shell.
The dispute stems from Venture Global’s Calcasieu Pass LNG complex operations that began exports in 2022. Instead of fulfilling deliveries to long-term contract holders like BP and Shell, the company opted to sell cargoes directly into the spot market during a period of historically high prices.
This ruling could potentially impact other pending arbitration claims lodged by various long-term contract holders against Venture Global over similar sales practices at its Gulf Coast export facility.