Vitol and Glencore receive $380 Million award in Nigerian LNG litigation
Court documents obtained by revealed that trading houses Vitol, Glencore, and their gas suppliers, trading firms Taleveras won a legal fight in London against Nigeria's only liquefied gas (LNG), producer, for not delivering cargoes.
The London High Court and Court of Appeal heard the case, the latest of a series of lawsuits filed by buyers and sellers for non-delivery of goods after prices rose from the lows reached during the COVID epidemic when Russia invaded Ukraine on February 20, 2022.
Taleveras filed a lawsuit against a Nigerian venture known as NLNG, which included Shell TotalEnergies, Eni, and other partners, four year ago. The three companies, as well as the Nigerian oil company with 49% ownership in NLNG are minor shareholders. According to an official video, Taleveras rejected NLNG’s appeal last week.
In the next few weeks, a full written judgement is expected to be published.
NLNG operates Nigeria's largest LNG plant which accounts for around 5% global supply.
NLNG declined to comment further and said that it would review the ruling. Shell declined to make a comment. TotalEnergies, Eni and Shell did not reply to requests for comment.
The court proceedings focused on the 19 cargoes that NLNG was due to deliver to Taleveras between 2020-2021.
According to court documents, Taleveras pre-sold these cargoes.
Trading houses brought legal action against Taleveras due to non-delivery. This led to a series of lawsuits.
Documents show that NLNG must pay Vitol approximately $260 million, and Glencore approximately $120 million.
Vitol and Glencore have not responded to any requests for comment. The amount that Taleveras will receive in addition to $380 million is not known. Taleveras refused to comment.
The European benchmark gas price ranged between 4.14 euros per megawatt hour in 2020, when demand dropped due to the pandemic, and 311 euro ($328) in 2022, after the invasion in Ukraine disrupted supply into Europe.
Some producers, when prices rose, cut their supply in long-term contracts and instead sold the volumes at higher prices to the spot market, which sparked a wave complaints about the legality of these actions.
Shell and BP, in one case, pursued arbitration against Venture Global LNG (a U.S.-based gas exporter) for failure to deliver contracted cargoes. Venture Global cited issues with its LNG facilities for the delays.
In the case between Taleveras and NLNG we could not determine the reasons NLNG cited as to why there were delays.
Igho Sannomi, an independent energy trader from Nigeria, founded Taleveras in 2004. The company has its headquarters in Dubai. (Reporting and editing by Tomasz Jánowski. Additional reporting by Marwa R. Rashad, Isaac Anyaogu)
(source: Reuters)
