Nigeria LNG Limited (NLNG), the country’s largest gas exporter, has been ordered by a London court to pay $380 million in damages to global commodity traders Vitol and Glencore over undelivered liquefied natural gas (LNG) cargoes.
The ruling, delivered on February 25, 2025, follows a protracted legal battle over contractual obligations and supply disruptions.
According to Reuters, the London Court of International Arbitration found NLNG—a joint venture between the Nigerian National Petroleum Company (NNPC), Shell, TotalEnergies, and Eni—in breach of contract for failing to supply LNG cargoes to Vitol and Glencore.
The dispute originated from a supply contract between NLNG and trading firm Taleveras, under which Taleveras was to receive 19 LNG cargoes between 2020 and 2021. However, due to operational disruptions and force majeure declarations at Nigeria’s Bonny Island LNG export facility, NLNG was unable to fulfill its contractual obligations.
Taleveras had reportedly pre-sold some of the shipments to Vitol and Glencore. When deliveries failed, the two firms sued Taleveras, triggering a series of legal proceedings that eventually implicated NLNG.
The case was heard at London’s High Court and Court of Appeal, where NLNG contested the claims. However, the court rejected its appeal last week, affirming the arbitration ruling that mandates the company to pay approximately $260 million to Vitol and $120 million to Glencore.
In response, NLNG stated that it was reviewing the ruling but declined to provide further comments. Shell, Eni, and TotalEnergies also declined to comment.
It remains unclear how much Taleveras stands to receive beyond the $380 million settlement, as the company also declined to comment.
The lawsuit highlights a growing trend of legal disputes in the energy sector, where buyers are increasingly holding producers accountable for failing to meet contract terms.
Gas price fluctuations have added to market volatility. Prices plummeted to €3.63 ($4.14) per megawatt-hour in 2020 due to weak demand during the COVID-19 pandemic but surged to €311 ($328) per MWh in 2022 following Russia’s invasion of Ukraine, which disrupted global energy supplies.
Meanwhile, NLNG has faced significant operational challenges, including a shortage of feedstock, leading to a 23 percent revenue decline in 2023. The company’s revenue fell to $5.84 billion, down from $7.59 billion in 2022—the first drop in three years, according to official data analysed by The Africa Report.
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