Venture Global LNG, a U.S. exporter of liquefied gas (LNG), became this year one of the largest producers in the country of super-chilled natural gas. It also became the most controversial supplier of the industry after six customers filed contract claims.

Co-chairs Michael Sabel & Robert Pender founded the company and have since turned it upside down with strong contracts, great timing, and a plan to build three giant factories quickly.

Sabel, a former banker and investment adviser, and Pender, a financial lawyer, have successfully rebutted accusations of self-dealing from BP, Shell and Repsol SA. Orlen, Galp Energia, Edison SpA and Orlen also made similar allegations. They are in charge of a company that aims to produce more than 100 million metric tonnes of LNG.

A U.S. regulator of energy sided with the customers of its first facility, ordering both plants to be shut down.

Documents to be turned over

Showing why the Calcasieu Pass Plant is still in commissioning more than two year after startup.

The company insists that it doesn't have to provide the six, because its contracts allow it the freedom to decide when Louisiana is ready. Venture Global claims it's not, despite the fact that they have been selling spot shipments since early 2022.

Shell, BP, and other companies claim that the project has produced LNG in excess of its 10 MTPA production capacity and they have profited by billions of dollars. Venture Global is being sued by them and two other parties in contract arbitration.

Securing on a small scale

Venture Global was founded by two entrepreneurs who had no LNG experience. Sabel and Pender tried to build a coal power plant in Sri Lanka in 2009, but failed. They then got the LNG bug.

When they considered how Haiti could import smaller amounts of gas to meet its needs, they seized upon LNG. Sabel thought it would be possible to build small-scale modular gas plants.

The scale was too large, dangerous and expensive. Sabel stated in an interview that "our Eureka moment" was to reduce the scale so it could be built in factories.

Baker Hughes, a manufacturer of LNG equipment, was working on modular trains or chillers, which turn gas into liquid. These are manufactured in factories, then snapped together as Legos, to start exports more quickly.

Lorenzo Simonelli is the CEO of Baker Hughes.

He said that Sabel and Pender were "very motivated professionals" who had achieved their LNG dreams.

In order to bring their vision into reality, they needed customers who were willing to sign contracts for a long time to convince financiers of their plan. This led to deals for processing at around $1.75 per 100,000 British thermal units - about 60% less than the current rate. They made deals with BP Edison Galp Repsol Shell Orlen.

Shell wrote to U.S. regulators in March that Venture Global had flouted the "LNG industry standards" by extending a normal months-long process to years, so it could keep cargoes to its own use.

Shell wrote that it "has abused and continues to abuse the regulatory process in order to achieve its commercial goals," pointing out the sale of 257 loads from an alleged unready plant.

PROFITS OF BILLIONS OF DOLLARS

Shell estimated that the company would have received $48.8 millions per cargo if it had delivered those cargoes under contract. This is $29 million higher than what Shell would have paid if these cargoes had been delivered according to its contracts. Calcasieu Pass reported $7.6 billion of sales by the end 2023. "$4.5 billion higher than average prices" it said.

Venture Global CEO Sabel acknowledged that its contract prices were lower than other companies, but said it would have been "a lot more helpful" if it had been able sign deals at higher price points.

He rejected Shell's claim that Calcasieu pass was built at the expense of long-term customers and believes "the issue relating to CP1" (Calcasieu) will be resolved when Shell delivers gas to these buyers by early in next year.