Key points:
- Vitol and Glencore won a $380M lawsuit over LNG non-delivery
- Nigeria’s NLNG lost its appeal in a London court ruling
- The case highlights supply disputes amid volatile gas markets
VITOL and Glencore are set to receive $380 million in compensation after winning a legal dispute over non-delivery of LNG cargoes against Nigeria’s sole liquefied natural gas (LNG) producer, according to court documents seen by Reuters.
The case, which was heard in London’s High Court and Court of Appeal, involved a legal challenge by Taleveras, the trading firm that supplied Vitol and Glencore. The Nigerian LNG company (NLNG), partly owned by Shell, TotalEnergies, Eni, and Nigeria’s state oil company, had appealed against the ruling, but its case was rejected last week.
A full written judgment is expected in the coming weeks.
Legal battle over LNG supply
Taleveras initiated legal action against NLNG four years ago, citing non-delivery of 19 LNG cargoes due for delivery between 2020 and 2021. Taleveras had already pre-sold some of these cargoes to Vitol and Glencore, leading the two trading houses to sue for losses.
With NLNG losing the appeal, it is now required to pay:
- $260 million to Vitol
- $120 million to Glencore
It remains unclear whether Taleveras will receive additional compensation beyond the $380 million settlement.
Global gas market impact
The case highlights growing disputes in the LNG sector, where producers have faced lawsuits over supply cuts during periods of high gas prices. European gas prices fluctuated from €3.63 per megawatt-hour in 2020 to a record €311 per MWh in 2022, following Russia’s invasion of Ukraine and the disruption of energy supplies.
In response to soaring prices, some LNG producers allegedly withheld contracted cargoes in favor of higher-priced spot market sales, triggering legal actions.
Other major cases include Shell and BP’s arbitration against Venture Global LNG, a U.S. gas exporter, over similar supply contract disputes.
Nigeria’s LNG industry under scrutiny
NLNG, which operates Nigeria’s largest LNG plant supplying about 5 percent of global LNG demand, has not publicly commented on the ruling but has stated that it is reviewing the decision. Shell and Eni declined to comment, while TotalEnergies did not respond to Reuters’ request.
Taleveras, founded in 2004 by Nigerian businessman Igho Sanomi, is now headquartered in Dubai and continues to be a key player in international energy trading.
