Nigeria LNG Limited (NLNG), the leading gas exporter in Nigeria, has been ordered by the London Court of International Arbitration to compensate global commodity giants Vitol and Glencore with a total sum of $380 million.
The ruling, issued today, concludes a protracted legal battle over 19 undelivered LNG cargoes.
The dispute, rooted in contractual obligations and operational disruptions at Nigeria’s Bonny Island LNG export facility, saw NLNG found in breach of contract for failing to fulfill its delivery commitments to Vitol and Glencore.
These commitments were part of a supply agreement originally brokered with trading firm Taleveras, which had subcontracted a portion of the deliveries to the litigating companies.
Court proceedings revealed that Taleveras had pre-sold several LNG cargoes to Vitol and Glencore, contingent upon NLNG’s timely delivery.
However, amidst operational challenges and force majeure declarations, NLNG was unable to fulfill these obligations, prompting legal action against Taleveras and subsequent litigation that culminated in today’s ruling.
In response to the court’s decision, NLNG expressed intentions to review the ruling while refraining from further comment. Similarly, Shell, TotalEnergies, and Eni, co-owners of NLNG, declined to provide statements on the matter.
The financial ramifications of the court’s decision require NLNG to disburse approximately $260 million to Vitol and $120 million to Glencore.
The broader implications of this legal precedent underscore ongoing tensions in the global energy market, where contractual disputes have become increasingly common.
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