Charif Souki, the man credited with revolutionizing the US liquefied natural gas (LNG) industry, is facing challenges from Swiss bank UBS that threaten his financial stability. Souki founded Cheniere Energy, the company that pioneered the shipping of US shale gas overseas, turning the US into a significant LNG supplier. Despite his success with Cheniere, Souki has struggled to replicate it with his second gas export venture, Tellurian, and is now embroiled in a dispute with UBS.
UBS has stripped Souki of his Tellurian shareholdings due to a defaulted loan, and his prized sailboat and other assets have been seized. UBS is also seeking to liquidate more of his assets, including his luxury compound in Colorado. Forced sales of these assets would have detrimental effects on Souki and his family, leaving them without a privately held business, unemployed children, and potentially rendering Souki homeless.
Tellurian’s Driftwood LNG project in Louisiana, costing $25 billion, is Souki’s latest venture. However, the project has faced challenges since its inception. After being fired from Cheniere, Souki went into business with Martin Houston, a former BG Group executive, to develop the liquefaction plant at the same location. Cheniere and Houston engaged in lawsuits, which were settled in 2020, allowing Souki and Houston to pursue the project under Tellurian.
While Total initially invested in Tellurian and promised to buy LNG from Driftwood, potential customers later backed out due to the economic effects of the pandemic and falling gas prices. UBS, which had previously lent money to Souki and Tellurian, now seeks to collect the outstanding loans. Souki sold parts of his assets, but claims that UBS blocked the sale of others. UBS has liquidated Souki’s Tellurian shares at a low point in the market, causing further financial distress.
Souki believes UBS mishandled the situation, resulting in a loss of value. However, UBS argues that it cannot be blamed for unforeseen circumstances. Souki is now fighting to regain control over the sale of his remaining assets, but recent bankruptcy filings may shift the decision-making process to a federal judge.
Despite these challenges, Souki remains hopeful about securing the necessary funds to complete the Driftwood project. He is confident that he can convince potential investors to support his strategy. However, some industry experts suggest that Souki himself may be hindering Tellurian’s progress, making it a possible target for activist hedge funds.
While Souki faces the possibility of losing his ranch in a forced sale, he minimizes the potential impact, claiming to have other properties around the world.
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