Cheniere Energy Drops Lawsuit Against Tellurian
LNG terminal development company Tellurian announced Thursday that a lawsuit brought by Cheniere Energy against two top executives has now been dismissed. Cheniere had alleged that Tellurian's Driftwood LNG project benefited improperly from Cheniere's own investments under ex-Cheniere CEO (and current Tellurian chairman) Charif Souki.
“Although this frivolous lawsuit was clearly an attempt to disrupt the hard work and success we are having at Tellurian, it never distracted us from our focus on building Tellurian’s global natural gas business, beginning with Driftwood LNG," said Souki in a statement.
Driftwood LNG is a proposed 28 mtpa terminal near Lake Charles, Louisiana. Driftwood has signed a full EPC contract with Bechtel for the facility's construction, and it expects to break ground this year. The first liquefaction is slated for 2023.
French energy major Total is an equity partner in the project, and Tellurian has also signed a memorandum of understanding with Indian gas company Petronet which would see Petronet take an 18 percent equity stake. “I look forward to my next trip to India and anticipate finalizing our agreements by the end of March,” Souki said.
In 2015, Cheniere Energy dismissed longtime CEO Charif Souki in a disagreement over expansion plans. After pressure from activist investor Carl Icahn, who controlled a 14 percent stake in Cheniere, the company's board opted to take a more conservative growth strategy and replaced Souki with one of Icahn's board nominees.
As CEO, Souki had pushed for an ambitious building program for LNG liquefaction trains in order to expand the company's market share. “I wanted to do 14 trains by 2025, add one every year . . . They felt it was more prudent to slow down," he told media at the time. “I don’t have an issue with the strategy.”
After his removal, Souki joined with BG Group veteran Martin Houston to found Tellurian and pursue Driftwood LNG, which is set to be the largest LNG facility in the U.S. upon full build-out.