Former Cheniere CEO Charif Souki will return to the liquefied natural gas business as a partner at the head of Tellurian Investments, he announced Tuesday.
Souki’s relentless push for expansion and ever more liquefaction capacity took Cheniere Energy from the edge of bankruptcy in 2008 to the leader and largest player in a billion-dollar push to export U.S. natural gas.
But his drive for more export capacity even as the global liquefied natural gas markets weakened — and controversy over his large compensation package — put him at odds with his board and activist investor Carl Icahn, who had built up a stake in the company.
Souki was ousted as the CEO of Cheniere in December and relinquished his board seat in February, shortly before the company he founded plans to ship its first cargo of liquefied natural gas.
Souki’s new company, Tellurian Investments, will develop mid-size natural gas liquefaction projects along the Gulf Coast. Souki will found the company with partner Martin Houston, previously of LNG developer Parallax Energy.
“What differentiates us from every other LNG developer is our combination of talent. I see what can be done and Martin knows exactly how to get it done,” Souki said in a written statement.
Souki and Martin had previously worked together on a series of small-scale LNG investments along the Gulf Coast. In mid-2015, Cheniere and Parallax announced they had agreed in principal to team up and develop 10 million tons per annum of LNG capacity through Parallax’s two mid-scale projects, Live Oak LNG and Louisiana LNG.
But the partnership frayed as Souki clashed with his board over the direction of the company. In February, after Souki’s ouster, Cheniere filed suit against Parallax over loans it had made to the smaller company.
Cheniere didn’t immediately return a request for comment Tuesday.
It wasn’t immediately clear Tuesday whether Tellurian would continue to pursue the Live Oak LNG and Louisiana LNG projects. Both projects were originally slated for construction in early 2021, with about 19 million tons per annum of capacity online by 2025.
Both projects will face an uphill fight. The liquefied natural gas markets have shifted toward oversupply as a surge in liquefaction capacity has coincided with weak global demand for the gas. Industry analysts have suggested that little capacity past what’s under construction now will be needed until at least the end of the decade.
In the announcement Tuesday, Souki and Houston stressed that their company was focused on the long term.
“We are thinking about the energy needs of the world from 2020 to 2040,” the company said in a written statement attributed to both partners. “We are absolutely in this for the long haul.”
Tellurian will partner with Bechtel to construct the plants and have selected Chart Industries for liquefaction technology, the company said.