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Charif Souki, a pioneer of the US liquefied natural gas industry, will receive a payout of more than $8mn after being ousted from project developer Tellurian as the company struggles to get a costly gas export project off the ground.
Tellurian, co-founded by Souki in 2016, said in a regulatory filing on Wednesday that he had resigned from its board of directors effective this week. The announcement came after he was terminated as executive chair earlier this month “without cause”, according to the company.
His departure scuttles an attempted second act for Souki, a former banker and restaurateur credited with establishing the American LNG export industry less than a decade ago, which has since boomed into the world’s biggest.
Souki had established his reputation at Cheniere Energy, which he co-founded and built into the country’s first LNG exporter outside Alaska. Cheniere’s success catapulted him into the limelight and made him the best-paid executive in the US at one point, before he was sacked following a bruising clash with investor Carl Icahn just before its first cargo set sail.
But he has failed to repeat that performance at Tellurian, which floundered in its push to develop its $25bn Driftwood export project in Louisiana. The company warned in November of “substantial doubt” about its ability to continue as a going concern.
“Souki had been steering Tellurian’s strategy for years. But as the going concern warning showed, he was actually steering the company into a ditch,” said Clark Williams-Derry, an analyst at the Institute for Energy Economics and Financial Analysis.
Souki, aged 70, departs Tellurian with a cash severance of $6.4mn, a $1mn lump sum payment and a series of other salary, bonus and travel-related payments.
The company declined to comment on his exit beyond the filing. Souki did not respond to a request for comment.
Souki started Tellurian in early 2016 with Martin Houston, a former BG Group executive, with an aim to develop the Driftwood project on a 1,200-acre site along the Calcasieu river. If completed it would be one of the country’s largest export terminals.
Driftwood has hit repeated obstacles, losing key buyers and struggling to raise funds, despite a surge in demand for US gas since Russia’s full scale invasion of Ukraine last year.
Souki remained defiant, however, telling the Financial Times as recently as August that he was confident he would see the project through to construction.
“For me, the glass is always half full,” he said in an interview then. “Do I have an appetite for risk that most people don’t have? Of course, if not, I wouldn’t be doing what I’m doing.
“I am responsible for half of the LNG industry in the United States. So yes, my new project is ambitious, but . . . for me, it’s not a big deal.”
Tellurian’s market capitalisation has plunged from a high of almost $3bn in 2017 to less than $500mn. Shares rose 1 per cent on Wednesday after news of Souki’s departure from the company.
The company’s difficulties have also hit Souki’s personal finances. A stand-off with banker UBS O’Connor over loans secured against his Tellurian stock over the past year stripped him of much of his shareholdings, as well as his yacht and a sprawling luxury ranch in the Colorado ski town of Aspen.
“Charif Souki’s legacy within the LNG space has grown increasingly complicated over the past decade, however, there’s no denying that he’s been one of the defining figures of the US LNG buildout over the past two decades,” said Michael Webber, managing partner at Webber Research & Advisory.
