NLNG is required to pay $380 million to Vitol and Glencore following a lawsuit by Taleveras over non-delivered LNG cargoes. The dispute centers on 19 shipments intended for Taleveras between 2020 and 2021, with NLNG appealing the case unsuccessfully. Market volatility has led to increasing disputes in the gas sector, reflecting ongoing supply challenges amid geopolitical unrest.
Nigeria LNG (NLNG) has been ordered to pay $380 million in total to commodity trading giants Vitol and Glencore after losing a legal dispute with gas supplier Taleveras. Taleveras had sued NLNG in a London court due to non-delivery of LNG cargoes that were pre-sold to Vitol and Glencore four years prior. The judgment follows an appeal by NLNG that was ultimately denied, maintaining the previous ruling.
The legal battle involved 19 LNG shipments that were supposed to be delivered to Taleveras between 2020 and 2021. NLNG is set to compensate Vitol approximately $260 million and Glencore around $120 million. The reasons behind the delays in delivery have not been disclosed publicly. A written judgment is anticipated in the coming weeks, following the court’s announcement.
NLNG plays a critical role in the global LNG market, accounting for about 5% of total supply. The company is currently evaluating the court’s decision, but refrains from issuing any further comments. Notably, major partners in the venture, including Shell, TotalEnergies, and Eni, have also opted not to comment on this financial liability or its implications.
Market conditions affecting gas supplies continue to pose challenges, with volatility exacerbated by events like the COVID-19 pandemic and the Russian invasion of Ukraine. This dispute follows other instances where suppliers have faced legal actions for failing to deliver on long-term contracts. Fluctuations in the European gas market have seen prices jump dramatically, reflecting pressures on supply and contract obligations.
In a related scenario, Shell and BP initiated arbitration against Venture Global LNG due to unmet contractual deliveries, attributing the credit defaults to technical failures at the relevant LNG facilities. Such disputes highlight ongoing tensions in the market and the legal ramifications of contractual obligations amid high price demands.
The ruling against NLNG illustrates the complexities of contractual obligations in the LNG sector and the repercussions of non-delivery amid market volatility. With significant payouts ordered to Vitol and Glencore, NLNG’s operations could be impacted as they navigate ongoing legal scrutiny and operational re-evaluations in a turbulent economic climate.
Original Source: www.offshore-technology.com
