Exclusive: Vitol, Glencore win $380 million award in Nigerian LNG litigation
Feb 25 (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 (SHEL.L), opens new tab TotalEnergies (TTEF.PA), opens new tab and Eni (ENI.MI), opens new tab as partners, four years ago. These three companies are minority shareholders in NLNG, opens new tab, 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 declined to comment, while TotalEnergies and Eni did not respond to a request for 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 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 (SHEL.L), opens new tab and BP (BP.L), opens new tab 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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
12 minutes ago
- Reuters
Bessent says US may 'roll the date forward' for some after 90-day tariff pause ends
June 11 (Reuters) - U.S. Treasury Secretary Scott Bessent on Wednesday said the Trump administration is prepared to "roll the date forward" with trading partners negotiating in good faith if the deadline marking the end of the 90-day pause on President Donald Trump's reciprocal tariffs is reached with no deal. "It is highly likely that those countries - or trading blocs as is the case with the EU - who are negotiating in good faith, we will roll the date forward to continue the good-faith negotiations," Bessent told the House Ways and Means Committee. "If someone is not negotiating, then we will not." Bessent's remarks, in response to a question from a Democratic lawmaker, marked the first time a Trump administration official has indicated some flexibility around the expiration date for the pause. That date - July 8 - is now just four weeks away, and so far the White House has struck only one preliminary deal with a major foreign trading partner affected by the pause, Britain. A deal struck on Tuesday in London with China to de-escalate that bilateral trade war is proceeding on a separate track and timeline. The White House did not immediately respond to a question about whether Trump shared Bessent's view. Trump announced the pause on April 9, a week after unveiling "Liberation Day" tariffs against nearly all U.S. trading partners that proved to be so unexpectedly large and sweeping that it sent global financial markets into near panic. The S&P 500 Index (.SPX), opens new tab plunged more than 12% in four days for its heftiest run of losses since the onset of the COVID-19 pandemic in early 2020. Investors were so rattled they bailed out of safe-haven U.S. Treasury securities, sending bond yields rocketing higher. The dollar sank. Markets started their recovery on April 9 when Trump unexpectedly announced the pause. A further leg up in the recovery followed in early May when the Trump team reached a preliminary deal to dial back the triple-digit tariff rates it had imposed on goods from China. The events have given rise to what some on Wall Street have parodied as the "TACO" trade - an acronym for Trump Always Chickens Out. "The only time the market has reacted positively is when the administration is in retreat from key policy areas," Democratic Representative Don Beyer of Virginia told Bessent before pressing him on what should be expected at the end of the next deadline next month. "As I have said repeatedly there are 18 important trading partners. We are working toward deals with those," Bessent said before going on to signal a willingness to offer extensions to those negotiating in good faith.
Reuters
22 minutes ago
- Reuters
Japan's JERA agrees to buy US LNG to rebalance supply portfolio
TOKYO, June 12 (Reuters) - JERA, Japan's biggest power generator, has agreed to new supply deals for U.S. liquefied natural gas (LNG) from four projects to diversify its global portfolio away from its reliance on Australia, it said on Thursday. JERA plans to buy up to 5.5 million metric tons per annum (mtpa) of U.S. LNG under 20-year contracts, with deliveries starting around 2030. That total includes some previously reported deals as well as newly announced agreements. The move illustrates Japan's efforts to seek stable and flexible LNG supply to strengthen energy security and meet growing electricity demand driven by expanding data centres. The country is the world's second-largest LNG importer after China. JERA, Japan's biggest LNG buyer, has signed a heads of agreement with Sempra Infrastructure for 1.5 mtpa from its Port Arthur LNG phase 2 project and a HOA with Cheniere Marketing for up to 1 mtpa from Corpus Christi LNG and Sabine Pass LNG. The Japanese utility also signed a 20-year sales and purchase agreement (SPA) with U.S. LNG developer Commonwealth LNG for 1 mtpa from its Louisiana project. On Tuesday, sources familiar with the negotiations told Reuters about the deal though both companies declined to comment at the time. The 5.5 mtpa figure also includes its deal announced on May 29 with NextDecade (NEXT.O), opens new tab to buy 2 mtpa from its Rio Grande LNG project. All four are 20-year, free-on-board contracts with no destination restrictions, although the Cheniere deal could go beyond 20 years, JERA said. "We made these decisions because cost-competitive and flexible LNG is essential as we look towards the 2030s," JERA's Global CEO and Chair Yukio Kani told Reuters. He added that LNG has become increasingly important amid rising power demand from data centres and the soaring costs of cleaner alternatives like hydrogen and ammonia. "We were also aiming to secure contracts with the projects already under development and tied to the EPC (engineering, procurement, and construction) agreements before the recent surge in LNG project costs and interest rates," he said. The announcement comes amid ongoing trade talks between Japan and the United States, though Kani stressed there was no government pressure behind the deals which he said were purely private sector decisions. "We are rebalancing towards the global supply mix," he said, to reduce its weighting toward Australia. After the new deals, the U.S. will supply nearly 30% of JERA's LNG mix, up from 10% now. Oceania and Asia, including Australia, currently account for more than half. JERA, jointly owned by Tokyo Electric Power (9501.T), opens new tab and Chubu Electric Power (9502.T), opens new tab, already buys U.S. supply from Freeport LNG and Cameron LNG. In 2023, it signed a 20-year contract to buy 1 mtpa from Venture Global's (VG.N), opens new tab CP2 project.
Telegraph
4 hours ago
- Telegraph
UAE oil giant circling BP gas fields
A state-backed oil giant from the United Arab Emirates is positioning itself for a swoop on BP's energy empire. Adnoc, the Abu Dhabi-owned group, has been considering a move for BP's key assets and looking to partner with another bidder to buy some of the FTSE 100 group 's divisions, Bloomberg reported. The Middle Eastern company, which is run by Sultan Ahmed Al Jaber, the UAE's energy minister, is said to be most interested in BP's liquefied natural gas (LNG) fields, rather than taking over the entire company. Adnoc recently started an international unit, XRG, which is on the hunt for gas and chemicals deals as it targets a big jump in LNG capacity. It is understood that XRG's discussions about a possible bid are at an early stage with no decisions made. No BP assets have been announced as being for sale. Adnoc has been a longstanding suitor for BP, with The Telegraph last year reporting that Adnoc had explored a full-blown takeover of the UK group, which has long suffered from a depressed stock market valuation. Deliberations did not advance after Adnoc concluded that BP was not the right fit for its strategy. The company was also concerned about the politics of any bid. A takeover of BP would almost certainly draw UK government involvement because of its significance to Britain. Sultan Al Jaber, who has run Anoc since 2016, is also the chairman of UAE media company IMI, which has been involved in funding a bid to buy The Telegraph. Adnoc's possible interest comes as BP battles to turn around its fortunes after a string of missteps in recent years. Murray Auchincloss, the chief executive, is trying to reset that with a return to oil and gas, and a plan to sell assets. Elliott, the US activist investor, also recently took a significant stake in the group and has been pushing for changes to improve performance and shareholder value, including spending cuts and asset sales, BP and Adnoc already have a long history of working together on projects. The London-headquartered company helped discover oil in Abu Dhabi more than half a century ago. Last year BP also took a 10pc stake in an LNG plant under construction in the emirate and the companies also struck a deal to form a joint venture focused on production from two vast Egyptian gas fields. Under the deal, BP transferred interests in three gas fields to the joint venture as well as exploration rights. Adnoc put cash into the joint venture helping BP raise funds to further expand in the Middle East. The move was part of BP's attempts to battle a prolonged underperformance stemming in large part from its previous focus on a net zero strategy. Other oil companies have also been exploring opportunities at BP, whose market value has fallen by a third in just over a year to below £60bn. Adnoc referred questions to XRG, which declined to comment. A BP spokesman said the group refused to comment on 'rumour and speculation'.
