Vitol, Glencore Win $380 Million Award in Nigerian LNG Supply Dispute
(Reuters) — Trading houses Vitol and Glencore will receive $380 million in compensation after their gas supplier, trading firm Taleveras, won a legal battle in a London court against Nigeria’s sole liquefied natural gas (LNG) producer for non-delivery of cargoes, court documents seen by Reuters showed.
The case heard in London's High Court and Court of Appeal is the latest in a string of lawsuits brought by buyers against sellers and producers for non-delivery of cargoes after gas rallied from lows plumbed during the COVID pandemic when Russia invaded Ukraine in February 2022.
Taleveras sued Nigerian venture, known as NLNG and involving Shell TotalEnergies and Eni as partners, four years ago. These three companies are minority shareholders in NLNG, along with the Nigerian state-owned oil company which has 49%. Last week, Taleveras had NLNG's appeal rejected, according to an official video of court proceedings.
A full written judgment is due to be released in the coming weeks.
NLNG runs Nigeria’s biggest LNG plant, which covers around 5% of global supply.
NLNG said it was reviewing the ruling and declined further comment. Shell, Eni and TotalEnergies declined to comment.
Court proceedings focused on 19 cargoes that NLNG had been due to deliver to Taleveras in 2020-2021.
Taleveras had pre-sold some of these cargoes to Vitol and Glencore, according to court documents.
The trading houses took legal action against Taleveras for non-delivery, leading to a chain of litigation.
The lost appeal means NLNG will need to pay Vitol around $260 million and about $120 million to Glencore, the documents said.
Vitol and Glencore did not respond to requests for comment. It was not clear how much Taleveras would receive on top of $380 million. Taleveras declined to comment.
European benchmark gas prices TRNLTTFMc1 swung between 3.63 euros ($4.14) per megawatt-hour in 2020 as demand fell because of the pandemic and 311 euros ($328) per MWh in 2022 after the invasion of Ukraine disrupted supplies to Europe.
When prices soared, some producers cut supply under long-term deals and sold those volumes at higher prices on the spot market instead, triggering a wave of complaints about legality of such actions.
In one such case, Shell and BP pursued arbitration against Venture Global LNG, a U.S. gas exporter, for failing to supply contracted cargoes. Venture Global cited technical issues at its LNG facilities as the reason for delayed deliveries.
In the case of Taleveras versus NLNG, Reuters could not establish the reasons NLNG cited for delays.
Taleveras was founded in 2004 by Igho Sanomi, one of Nigeria’s independent energy traders. The company is now based in Dubai.
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