The duo atop the biggest and most contentious US LNG exporter
The two industry outsiders upending LNG markets
Venture Global LNG has shot up the ranks of gas exporters
Customers BP, Shell say the pair flout industry norms
By Curtis Williams
HOUSTON, June 11 (Reuters) -U.S. liquefied natural gas (LNG) exporter Venture Global LNG this year became one of the country's largest producers of the superchilled gas and the industry's most contentious supplier, facing contract claims by six customers.
The duo who founded the company, co-chairs Michael Sabel and Robert Pender, have turned the booming business upside down through strong contracts, good timing and a business plan to rapidly build three giant plants.
Sabel, a former investment banker, and financial lawyer Pender, have successfully fended off accusations of self-dealing by BP BP.L, Shell SHEL.L, Repsol SA REP.MC, OrlenPKN.WA, Galp Energia GALP.LS and Edison SpA EDNn.MI. They oversee a business aiming to produce over 100 million metric tons of LNG.
On Monday, a U.S. energy regulator sided with customers of its first plant, ordering the pair to turn over documents showing why their initial Calcasieu Pass plant remains in a commissioning phase more than two years after startup.
At issue is the company's insistence it does not have to supply the six because their contracts allow it to decide when the Louisianaplant is ready. Venture Global contends it is not, even though they have been selling spot cargoes since early 2022.
Shell, BP and others say the project is producing LNG above its 10 MTPA capacity and has profited to the tune of billions of dollars that belong to them. They and two others have contract arbitration claims against Venture Global.
SEIZING ON SMALL SCALE
Neither of Venture Global's owners had any experience in LNG before starting the company. Sabel and Pender had tried unsuccessfully in 2009 to develop a coal plant in Sri Lanka, before getting the LNG bug.
They seized on LNG when considering how Haiti could import small amounts of gas for its needs. Sabel felt it could work if there were small-scale gas plants built from modular components.
"The scale had become so gigantic, risky and too expensive. So our Eureka moment was let's bring the scale down, small enough so you can build it (processing equipment) in factories," Sabel said in an interview last year.
They signed on with LNG equipment maker Baker Hughes BKR.O, which was developing modular trains, or chillers that turn gas into a liquid, and are built in factories and snapped together like Legos to more quickly start exports.
"What they did was a modular design which enabled them, from an execution timeline, to deliver," said Lorenzo Simonelli, CEO of Baker Hughes.
Sabel and Pender are "very driven professionals" who have succeeded with their LNG dream, he said.
To bring their vision to life, however, they needed customers willing to sign long-term contracts to convince financiers to back their plan. That led to processing deals at about $1.75 per million British thermal units, about 60% of the going rate at the time. They struck deals with BP, Edison, Galp, Repsol, Shell, and Orlen PKN.WA.
In a March letter to U.S. regulators, Shell said Venture Global has flouted "LNG industry norms" by turning a routine months-long startup process into years to keep cargoes for its own use.
It "has abused, and is continuing to abuse, the regulatory process to achieve its commercial objectives," Shell wrote, pointing to the pair's sale of 257 cargoes from a plant they claim is not ready for commercial sales.
BILLIONS IN PROFIT
The company sold that LNG on the spot market for what Shell estimated was $48.8 million per cargo, or $29 million more than if those cargoes were delivered under its contracts. Calcasieu Pass collected $7.6 billion in sales through the end of 2023, "$4.5 billion more than if sold at average prices," it told regulators.
Venture Global CEO Sabel acknowledged its contract prices were significantly lower than others, but he said had it been able to sign deals at higher prices, it "would have helped us a lot more."
He rejects Shell's contention that Calcasieu Pass was built on the backs of its long-term contract holders and believes when it delivers gas to those buyers by early next year, "the issue as it relates to CP1 (Calcasieu Pass) goes away."
Venture Global LNG asks US energy regulator to keep documents confidential https://www.reuters.com/business/energy/venture-global-lng-asks-us-energy-regulator-keep-documents-confidential-2024-03-14/
Venture Global LNG explains to US regulator its failure to sell commercial cargoes https://www.reuters.com/business/energy/venture-global-lng-explains-us-regulator-its-failure-sell-commercial-cargoes-2024-01-11/
BP, Edison, Shell ask US, EU to intervene in Venture Global LNG dispute https://www.reuters.com/business/energy/bp-edison-shell-ask-us-eu-intervene-venture-global-lng-dispute-2023-11-11/
Reporting by Curtis Williams in Houston; Editing by Gary McWilliams, Marguerita Choy and David Gregorio
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دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
