London Court Rejects NLNG’s Appeal Regarding Taleveras Deal

The London Court of Appeal, on April 17, rejected NLNG’s non-liability claim in a high-profile case involving Taleveras.

The appellate court ruled in favour of oil trading firms Vitol SA and Glencore Energy UK, upholding a lower court’s decision that ordered Nigeria’s largest LNG producer to pay $380 million.

The court ruling means that NLNG must honour the indemnity provision in line with an arbitral tribunal’s earlier declaration.

The lost appeal means NLNG will need to pay $380 million, of which $260 million will go to Vitol and $120 million to Glencore.

NLNG – Taleveras Court Case

The dispute arose from a 2020 sales agreement between NLNG and Taleveras, which required NLNG to supply Taleveras with liquefied natural gas cargoes. Taleveras agreed to purchase gas cargoes from NLNG for resale to Vitol and Glencore.

However, Taleveras failed to deliver several cargoes to Vitol and Glencore. As a result, both oil trading companies sued Taleveras. In response, Taleveras blamed NLNG for the non-delivery and sued it.

In other words, as agreed by the parties, NLNG failed to deliver 19 cargoes between 2020 and 2021.

European benchmark gas prices surged from €3.63 ($4.14) per megawatt-hour in 2020 to around €311 ($328) per MWh in 2022 after Russia’s invasion of Ukraine disrupted gas supplies to Europe.

In response to soaring prices, some LNG producers allegedly withheld contracted cargoes for higher spot market prices.

NLNG’s supply shortfall resulted in substantial losses for Vitol and Glencore, which had pre-purchased LNG cargoes from Taleveras. Due to skyrocketing gas prices at that time, they missed a significant opportunity for profit.

After extensive legal disputes and arbitration proceedings, Taleveras was awarded a decision in its favour.

On February 25, 2025, Taleveras won its legal battle in a London court against NLNG for non-delivery of LNG cargoes. The arbitrator awarded $380 million total: $260 million to Vitol and $120 million to Glencore.

Impact on NLNG

The London court’s ruling against NLNG in the Taleveras lawsuit will have significant financial, operational, and reputational consequences for Africa’s top LNG producer.

The most immediate consequence is the significant financial burden of the $380 million award. The payout may impact cash flow, shareholder dividends (NNPC, Shell, TotalEnergies, and Eni), and Train 7 project budgets.

However, NLNG could opt for phased or delayed payments to reduce potential reputational fallout and ease financial pressure. In addition, its loss to Taleveras may provoke a review of all its agreements on indemnity, liability, and third-party risks. The goal is to protect itself against likely future lawsuits.

In recent times, NLNG has seen its fortunes decline. Revenue decreased by 23.1% to $5.84 billion in 2023, compared to an eight-year high of $7.59 billion in 2022.

Crude oil theft, pipeline vandalism, and underinvestment in Nigeria’s critical oil and gas sector have worsened NLNG’s financial challenges.

NLNG is a joint venture of four companies: the Nigeria National Petroleum Company (NNPC) at 49%, Shell at 25.6%, and TotalEnergies and ENI at 15% and 10.4%, respectively. It produces about 5% of global LNG output.

At the Nigeria International Energy Summit in February, NLNG reported that only two of its six gas trains were operational due to attacks on its gas pipelines.

Taleveras’s recent court victory against NLNG underscores the complex legal and financial strategies that characterize Nigeria’s oil trade.