Cheniere Energy sues former CEO Charif Souki over $46 million loan
A series of loans worth $46 million is at the center of a lawsuit filed by Houston liquefied natural gas exporter Cheniere Energy against its co-founder and former CEO Charif Souki, who launched a rival company.
Cheniere and a subsidiary said in the lawsuit filed in state district court in Houston that Souki, while Cheniere CEO, oversaw a series of loans worth $46 million to Parallax Enterprises of Houston. At the time, Cheniere and Parallax were seeking to form a joint venture to develop a pair of LNG export terminals in Louisiana. The deal fell apart and Cheniere’s board of directors fired Souki in Dec. 2015.
More than three years later, Cheniere alleged in court documents, that Souki conspired and fraudulently used the loans to form Tellurian, a rival LNG company. Launched in Feb. 2016, Tellurian was founded by Souki and former Parallax Enterprises executive Martin Houston. Later, they poached Tellurian’s CEO, Meg Gentle, from Cheniere.
Souki could not be reached for comment. A spokeswoman for Tellurian said the company is aware of the lawsuit, but regarded it as a personal matter for Souki and therefore, could not respond.
The lawsuit is not the first between Cheniere, Parallax and Tellurian.
Parallax and seven subsidiaries sued Cheniere in July 2017, seeking $400 million in damages after the joint venture fell apart. Eric Nichols, an Austin attorney representing Parallax and its subsidiaries, said the companies contend that the $46 million was an advance of equity for the joint venture projects and that there was never an expectation of repayment until now.
“The Parallax entities intend to pursue those claims through trial, if necessary,” Nichols said.
Souki oversaw the transformation of Cheniere from a LNG import company into the leading exporter in United States. Under Souki’s leadership, the company reconfigured its LNG import terminal in Cameron Parish, La. into an export terminal.
Cheniere’s Sabine Pass LNG export terminal has shipped out more 530 cargoes since Feb. 2016. The company reported a $471 million profit on nearly $8 billion of revenue in 2018.
Meanwhile, Tellurian is seeking permission from federal regulators to build its proposed Driftwood LNG export terminal in Calcasieu Parish, La.. Tellurian has yet to post its fourth quarter and end-of-year earnings. The company reported a $33.2 million loss on $799,000 of revenue during the third quarter of 2018.
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