AUnited Kingdom court in London has ruled that Nigeria LNG Limited (NLNG), the country’s largest gas exporter, must pay $380million to global commodity traders Vitol and Glencore over undelivered cargoes, ending a long-standing contractual dispute.
The ruling, issued on February 25, 2025, by the London Court of International Arbitration, found NLNG — a joint venture between the Nigerian National Petroleum Company (NNPC), Shell, Total Energies, and Eni — in breach of contract for failing to deliver liquefied natural gas (LNG) cargoes as agreed.
The dispute originated from a supply contract between NLNG and trading firm Taleveras, which was supposed to receive 19 LNG cargoes between 2020 and 2021.
Taleveras had pre-sold some of these shipments to Vitol and Glencore, but NLNG’s failure to deliver led to legal action.
Following a chain of litigation, London’s High Court and Court of Appeal upheld the arbitration ruling, rejecting NLNG’s appeal and confirming that the company must pay approximately $260million to Vitol and $120 million to Glencore.
“The lost appeal means NLNG must fulfill its financial obligations,” a legal source familiar with the case said.
In response, NLNG stated that it was reviewing the ruling but declined further comment. Shell, Eni, and Total Energies also refused to comment on the case.
However, Vitol and Glencore did not immediately respond to inquiries.
Reuters reports that the lawsuit reflects a broader trend of legal disputes in the energy sector, where buyers are suing producers for failing to fulfill contractual obligations.
Gas prices, which plummeted during the COVID-19 pandemic, surged after Russia’s 2022 invasion of Ukraine.
European gas prices saw extreme volatility, dropping to 3.63 euros ($4.14) per megawatt-hour in 2020 due to weak demand but skyrocketing to 311 euros ($328) per MWh in 2022 as the war disrupted supplies.
Operational disruptions and a shift in gas supplies to the domestic market led to a 23 percent revenue decline for NLNG in 2023.
NLNG, Nigeria’s largest gas exporter, recorded its first revenue drop in three years due to feedstock shortages that curbed production.
Official data analysed by The Africa Report shows that NLNG’s revenue fell by 23.14 percent to $5.84 billion in 2023, down from $7.59 billion the previous year, when it hit an eight-year high.
