By Vallari Srivastava and Curtis Williams (Reuters) -Venture Global shares plunged 21% on Friday to their lowest level in nearly five months after it lost an arbitration case with BP over the U.S. LNG exporter's failure to deliver on a long-term gas supply contract, stoking worries of similar verdicts in disputes with other customers seeking billions of dollars in compensation. The ruling was a surprise after Venture Global's recent arbitration win against Shell. BP is seeking more than $1 billion in damages plus interest and legal costs, with the final amount to be determined in a separate hearing in 2026. Venture Global, the second-largest U.S. liquefied natural gas supplier, is facing other arbitration claims with customers seeking compensation of more than $4 billion linked to the delayed commercial start-up of the Calcasieu Pass project in Louisiana, according to the company's 2024 annual report. The company previously warned that losing current or future arbitration cases could result in significant financial penalties, the termination of some gas supply contracts, and accelerated repayment of project debt. All of the companies that have filed arbitration are seeking compensation, and none of them have sought to terminate their contracts in their proceedings, Venture Global has said. It is unclear why the result of the BP arbitration was different to the Shell case, and whether the outcome was due to differences in contracts or in the company's legal strategies. PENDING ARBITRATION CASES COULD BRING ADDITIONAL DAMAGES Deutsche Bank said in a note to clients on Friday that the latest outcome pushed it to revise the risk that Venture Global will face negative decisions from the remaining arbitrations to 50%. Venture Global told analysts on Thursday that the BP ruling has no impact on its current sale and purchase agreement with the company, according to two people who recounted the call to Reuters. Gabriel Moreen, a managing director at Mizuho Securities, called the ruling a "negative surprise," saying it introduces uncertainty for the remaining claims. "How two arbitrations over the exact same facts and circumstances led to two different outcomes is perhaps more a comment on the arbitrary nature of unilateral decision-making in arbitration hearings than anything else," J.P. Morgan analysts wrote in a note to clients on Friday. Should the company lose the remaining arbitration cases, it could face damages in the vicinity of $4.8 billion. If it continues to see split results, however, the total damages would be closer to $2.9 billion, the analysts said. The Venture Global share drop looked set to wipe out nearly $6 billion from the company's market valuation, if current losses hold. Since the company's initial public offering in January, its shares have fallen more than 58%. The stock declines also reflect ongoing investor caution over LNG commissioning risks. Venture Global is expanding its production amid surging global demand, with the U.S. becoming the world's top LNG supplier in 2023. CALCASIEU PROJECT IN SPOTLIGHT In addition to BP and Shell, Italy's Edison, Portugal's Galp, Spain's Repsol, and Poland's Orlen have filed arbitration claims accusing Venture Global of profiteering by selling LNG cargoes at higher spot market prices, rather than delivering them under long-term contracts. Edison and Repsol told Reuters they were still pursuing their arbitration cases against Venture Global. Orlen declined to comment, but said it remains in arbitration with the U.S. company. Venture Global has argued that the Calcasieu Pass export facility start-up was unavoidably delayed and could not reach the status of commercial operations for almost three years, even though it was exporting the superchilled gas from the plant. Long-term contracts did not take effect until the plant reached commercial operations in April 2025. Citi said the arbitration result was "unexpected," adding that the tighter language in BP's contract likely contributed to the outcome. The International Chamber of Commerce International Court of Arbitration found that Venture Global had breached its obligations to declare commercial operations had begun at the Calcasieu Pass plant in a timely manner and act as a "reasonable and prudent operator," the company said on Thursday. Venture Global said it is evaluating all options and will continue to vigorously defend its position. (Reporting by Vallari Srivastava in Bengaluru and Curtis Williams in Houston; Additional reporting by Marwa Rashan in London, Francesca Landini in Milan and Marek Strzelecki in Warsaw; Editing by Sriraj Kalluvila, Nathan Crooks and Paul Simao)
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