Offtake, Contracts and Pricing

In January 2022 Venture Global's Calcasieu Pass terminal, in Cameron Parish, Louisiana, produced its first liquefied natural gas. Its founders, Michael Sabel, a former investment banker, and Robert Pender, an energy and project-finance lawyer, had started the company in 2013 on an industrial idea: instead of a few giant custom-built liquefaction trains, string together many small, factory-built ones, and build faster and, on the company's own claims, more cheaply than anyone else. The plant had been financed the usual way. Shell, BP, Repsol, Edison, Galp, Orlen and other buyers had signed 20-year sale-and-purchase agreements (SPAs) at a Henry Hub-linked price plus a fixed fee, and lenders had lent against those contracts. Under the SPAs, contract deliveries would begin when the plant was declared to be in commercial operation. BP's contract, for example, was due to start at the end of 2022 (reported).

The first cargo sailed on 1 March 2022 (reported), five days after Russia invaded Ukraine. European gas prices were heading toward the record of about €340/MWh that the Dutch TTF benchmark would reach on 26 August. Venture Global did not declare commercial operation. It said the plant could not be called complete because components of its power island, the heat-recovery steam generators, needed to be redesigned and replaced, and that the SPAs allowed it to sell commissioning cargoes for its own account until then (company statements, reported). It sold them at spot prices, while the plant ran, on the buyers' account, at or above its nameplate of about 10 million tonnes a year (claimants, reported). Commercial operation was declared in April 2025 (reported), more than three years after first LNG. The cash from the commissioning period helped fund the equity in Venture Global's next plant, Plaquemines.

The buyers who had financed the plant received no contract cargoes in the largest gas-price shock in European history, and had to buy replacement LNG at crisis prices. They went to arbitration. The results split, because the contracts were worded differently. A tribunal found for Venture Global against Shell in August 2025, and a New York court denied Shell's petition to vacate the award on 2 March 2026. In October 2025 an ICC tribunal issued a partial award finding that Venture Global had breached its obligations to BP to declare commercial operation in a timely manner and to act as a reasonable and prudent operator; BP put its claim at about $3.7 billion to more than $6 billion (March 2026, company filing), with a damages hearing set for May 2027. Edison settled, and its arbitration was terminated on 8 June 2026 (company). Venture Global said it had won two of the three cases decided.