Peace In The Valley: Tellurian says all claims by Cheniere against Souki and Houston dropped

Tuesday, 11 February 2020
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LNG Journal editor

Tellurian Inc., the developer of the Driftwood LNG plant in Louisiana, said that Cheniere Energy, the largest US exporter, had permanently dismissed all claims against Tellurian Chairman Charif Souki, the former Cheniere Chief Executive, and Tellurian Vice Chairman Martin Houston.

The claims against the Tellurian executives had initially been heard at the 61st District Court of Harris County in Texas.

Four years

The dispute involved multiple claims and counterclaims stretching back to 2016 after former Cheniere CEO Souki was forced out of Cheniere the previous year by billionaire activist investor Carl Icahn.

Souki went on to co-found Tellurian, which is developing the proposed Driftwood plant in Louisiana and multiple pipelines.

The court case related to projects in Louisiana proposed by Cheniere and Parallax Enterprises, a predecessor entity to Tellurian that was a business partner of Cheniere.

Parallax was founded by Martin Houston, the former UK BG Group executive, and became involved in a business relationship with Cheniere.

“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.

Cheniere had accused Parallax of failing to pay back a $46 million loan for developing LNG projects that Cheniere said Tellurian would ultimately benefit from.

Tellurian argued that those efforts, the proposed Live Oak LNG and Louisiana LNG facilities, were separate from its own Driftwood LNG venture.

Souki was ousted from Cheniere followed disagreements over his expansion plans, including the Parallax projects.

Within months of leaving Cheniere, Souki announced the founding of Tellurian with Martin Houston.

Parallax was founded by the UK executive in late 2014 following discussions with the then-Cheniere CEO Souki about LNG projects.

Souki’s Driftwood plant is proposed for the west bank of the Calcasieu River, south of Lake Charles, and will have output of just over 26 million tonnes per annum when completed in 2023.

This comprises five liquefaction Trains built in two phases and with each having output of 5.25 MTPA.

Tellurian has expectations of delivering free-on-board (FOB) cargoes to buyers at between $3.00 per MMBtu and $4.00 per MMBtu.

The associated 96-mille Driftwood Pipeline has received all its regulatory permits. The pipeline has Gulf Coast interconnects with Transco, TETCO, TGP and Trunkline.

Tellurian also signed an accord in September 2019 with the leading Indian LNG importer for the purchase of up to 5 MTPA from Driftwood, concurrent with an equity investment by the New Delhi-based company.

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