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 case 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 against producers and sellers for non-delivery of goods after gas 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 years ago. The three companies, as well as the Nigerian oil company with 49% ownership in NLNG are minor shareholders. According to a video recording of the court proceedings, 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 was reviewing the decision. Shell and Eni declined comment while TotalEnergies didn't respond to the request for comment. The court proceedings were focused on 19 cargoes which 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.
During the price spike, some producers reduced supply in long-term contracts and instead sold these volumes on the spot markets at higher prices, which sparked a wave complaints about their legality. Shell and BP, two major oil companies, sued Venture Global LNG 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 were unable to establish the delays NLNG attributed.
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)
