[Editor's note: this story was updated at 7:54 a.m. CST Feb. 27.]
Cheniere Energy Inc. (AMEX: LNG), the largest U.S. LNG exporter, sued its former chairman and CEO, Charif Souki, alleging he conspired to help finance a joint venture that led to the formation of rival Tellurian Inc. (NASDAQ: TELL).
Cheniere is seeking repayment of a $46 million loan to Parallax Enterprises LLC that Souki helped arrange in 2015, plus unspecified damages, according to a case filed in Texas state court on Feb. 15.
Cheniere loaned money to Parallax to develop two liquefaction plants in Louisiana.
In its civil lawsuit, filed in Harris County, Texas, Cheniere alleged Souki and Parallax's owner Martin Houston put a plan together in December 2015 to close Parallax, without repaying Cheniere, but continue its operations through a new company that became Tellurian.
Souki and Houston did not immediately respond to requests for comment. Cheniere and Tellurian declined to comment.
Cheniere's board voted to remove Souki as the company's CEO and chairman on Dec. 12, 2015 due to disagreements over his expansion plans, under pressure from activist investor Carl Icahn. In February 2016 he also resigned as a director.
Souki and Houston formed Tellurian less than two weeks later.
Souki is now chairman of Tellurian, which is developing an LNG export plant in Louisiana called Driftwood.
RELATED: Why Tellurian Loves Haynesville: It’s Close, Prolific, Cheap
Cheniere claimed Driftwood is materially the same project as one of the plants Parallax was developing with money from Cheniere, but Tellurian has said it is not the same.
There are dozens of LNG export projects under development in North America. Many analysts expect Driftwood to be one of the few that will get built over the next several years.
Cheniere filed suit against Parallax in federal court in Texas in February 2016 to recover the money it loaned. Parallax, meanwhile, sued Cheniere in a Louisiana state court in March 2016 for breach of contract to develop the plants. The claims in those and other lawsuits ended up in a Texas state court. That case is currently set to begin in June.
Both Tellurian and Cheniere have said in federal filings that they do not expect resolution of the litigation will have a material effect on their financial results.
The Cheniere case against Souki is Cheniere Energy et al v. Charif Souki, Harris County District Court, No. 2019-11529.
Recommended Reading
ProPetro Ups Share Repurchases by $100MM
2024-04-25 - ProPetro Holding Corp. is increasing its share repurchase program to a total of $200 million of common shares.
Baker Hughes Hikes Quarterly Dividend
2024-04-25 - Baker Hughes Co. increased its quarterly dividend by 11% year-over-year.
Weatherford M&A Efforts Focused on Integration, Not Scale
2024-04-25 - Services company Weatherford International executives are focused on making deals that, regardless of size or scale, can be integrated into the business, President and CEO Girish Saligram said.
Range Resources Holds Production Steady in 1Q 2024
2024-04-24 - NGLs are providing a boost for Range Resources as the company waits for natural gas demand to rebound.
Hess Midstream Increases Class A Distribution
2024-04-24 - Hess Midstream has increased its quarterly distribution per Class A share by approximately 45% since the first quarter of 2021.