London court has mandated that Nigeria LNG Limited (NLNG), a prominent producer of liquefied natural gas, compensate two commodity trading companies, Vitol and Glencore, to the tune of $380 million due to the company’s failure to fulfil contracted deliveries.
Gatekeepers News reports that the legal action was initiated by Taleveras, a trading firm that secured LNG supply agreements with NLNG but did not receive the 19 cargoes that were to be delivered during the period from 2020 to 2021. NLNG, which is a significant player in the global LNG market, is a joint venture that includes Shell, TotalEnergies, Eni, and the Nigerian National Petroleum Company (NNPC) Limited, the latter of which holds a 49 percent interest.
Documents from the court proceedings reveal that Taleveras had pre-sold some of the undelivered cargoes to Vitol and Glencore, leading the latter companies to take legal action against Taleveras when the deliveries did not occur. This resulted in a series of legal disputes. Last week, the court dismissed an appeal by NLNG, reaffirming the requirement for the company to pay Vitol approximately $260 million and Glencore about $120 million.
In response to the ruling, NLNG indicated that they are evaluating the court’s decision but refrained from making further comments. Shell, Eni, and TotalEnergies also opted not to comment, while Vitol, Glencore, and Taleveras did not provide feedback to media inquiries.
This ruling arrives amidst ongoing tensions in the LNG industry, where certain producers have faced allegations of withholding contracted supplies to capitalize on higher spot market prices. Similar disputes have occurred globally, including arbitration cases involving Shell and BP Plc against U.S. exporter Venture Global LNG. Taleveras, established in 2004 by Nigerian businessman Igho Sanomi, is headquartered in Dubai.
