What to Know
- An ICC tribunal ruled by majority that Venture Global failed to declare Calcasieu Pass operational on time.
- Galp’s damages will be decided at a hearing in 2027 or 2028, and Venture Global says they are capped at $170 million.
- Galp and BP won liability rulings while Shell and Repsol lost, so LNG contract terms need individual review.
Galp has secured a favourable liability ruling in its dispute with Venture Global over the Calcasieu Pass LNG liquefaction facility in Louisiana. The disputes concern when deliveries should have commenced under long-term LNG sale and purchase agreements (LNG SPAs), an issue we explored in our 2024 chapter, ‘LNG Delivery Disputes’, in the Fourth Edition of Liquefied Natural Gas: The Law and Business of LNG.
Venture Global began producing LNG in 2022 but sold cargoes into the spot market, benefitting from high market prices. It maintained that commissioning of the facility was incomplete, so its long-term delivery obligations had not begun. It attributed the delay in part to problems with power equipment, with commercial operations ultimately declared in April 2025. A number of its buyers (including Shell, BP, Repsol and Galp) alleged that Venture Global had delayed contractual deliveries to benefit from higher spot prices.
Venture Global recently disclosed in an SEC report that an International Chamber of Commerce (ICC) tribunal had issued a partial final award in Galp’s favour. By a majority, the tribunal found that Venture Global breached its obligation under the applicable LNG SPA to declare the facility operational in a timely manner, with one arbitrator dissenting. Remedies remain to be determined following a separate damages hearing, expected in 2027 or 2028. Venture Global says that, based on the award, damages will be subject to the LNG SPA’s $170 million liability cap. Venture Global has said it is evaluating its options in response to the Galp decision.
The result adds to the contrasting outcomes in the Calcasieu Pass disputes. As set out in our previous updates, Shell’s and Repsol’s claims were rejected, whereas BP secured a favourable liability award in October 2025. In BP’s case, the tribunal reportedly found that a $1.6 billion liability cap did not apply. It has been reported that Unipec and Edison also brought claims, but that these have been settled, while a further claim commenced by Orlen is expected to be resolved by the end of this year.
As we noted in our January 2026 update, the extent of the similarities between the LNG SPAs in each of these cases is unknown. Whilst the differing outcomes could be used to argue against international arbitration as a predictable and consistent means of resolving disputes, in reality the differing outcomes likely highlight the need to assess and understand the terms of each contract individually, rather than assume that a decision concerning the same LNG facility will determine another buyer’s claim.
For buyers and sellers, the practical focus remains on clearly defining those terms. In light of these decisions, consideration should certainly be given at the drafting stage to the ‘start date’, commissioning procedures and rights to sell commissioning cargoes on the spot market as well as to applicable liability caps. As discussed in our LNG delivery disputes chapter, contractual limits may leave buyers exposed to replacement-supply costs and liabilities under onward sales commitments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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