A London court has ruled that Nigeria LNG Limited, the country’s biggest gas exporter must pay $380 million to global commodity traders Vitol and Glencore over undelivered cargoes.
The ruling, announced on February 25, 2025, stems from a long-standing dispute involving contractual obligations and supply disruptions.
According to the report by Reuters, the London Court of International Arbitration found Nigeria LNG, a joint venture between the Nigerian National Petroleum Company (NNPC), Shell, TotalEnergies, and Eni, in breach of contract for failing to deliver LNG cargoes to Vitol and Glencore.
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The international news network explained that the supply contract was between NLNG and another trading firm, Taleveras, in which the latter was supposed to receive 19 LNG cargoes from NLNG between 2020 and 2021.
The undelivered cargoes were part of long-term supply agreements disrupted by operational challenges and force majeure declarations at Nigeria’s Bonny Island LNG export facility.
Taleveras had reportedly pre-sold some of these shipments to Vitol and Glencore, but when NLNG failed to deliver, the two companies sued Taleveras, setting off a chain of litigation.
The case was reportedly heard in London’s High Court and Court of Appeal and last week, the court rejected NLNG’s appeal, confirming that the company must pay approximately $260 million to Vitol and $120 million to Glencore.
NLNG said it was reviewing the ruling and declined further comment. Shell, Eni and TotalEnergies declined to comment.
Court proceedings focused on 19 cargoes that NLNG had been due to deliver to Taleveras in 2020-2021.
Taleveras had pre-sold some of these cargoes to Vitol and Glencore, according to court documents.
The trading houses took legal action against Taleveras for non-delivery, leading to a chain of litigation.
The lost appeal means NLNG will need to pay Vitol around $260 million and about $120 million to Glencore, the documents said.
Vitol and Glencore did not respond to requests for comment. It was not clear how much Taleveras would receive on top of $380 million. Taleveras declined to comment.
Reuters noted that the lawsuit is part of a broader trend of legal disputes in the energy market, where buyers have taken action against producers for failing to honor contracts.
Gas prices, which plunged during the COVID-19 pandemic, surged dramatically after Russia’s invasion of Ukraine in 2022.
European gas prices fluctuated sharply, dropping to 3.63 euros ($4.14) per megawatt-hour in 2020 due to low demand during the pandemic. However, it soared to 311 euros ($328) per MWh in 2022 after the Ukraine invasion disrupted supplies.
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Operational disruptions and the redirection of gas supplies to the domestic market saw NLNG’s revenue fall 23 percent in 2023.
NLNG, the country’s biggest gas exporter, saw its revenue drop in 2023 for the first time in three years, owing largely to a shortage of feedstock that limited output.
Revenue fell by 23.14 percent to $5.84bn in 2023 compared to a year earlier, when it jumped to an eight-year high of $7.59bn, official data analysed by The Africa Report shows.
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