Cheniere Energy takes former chairman to court

Cheniere Energy Inc, the largest U.S. liquefied natural gas exporter and the firm building a 200-mile pipeline across Oklahoma went to court this week suing its former chairman and chief executive Charif Souki.

The company accused him of conspiring to help finance a joint venture that led to the formation of Cheniere’s LNG rival Tellurian Inc. Cheniere is demanding repayment of a $46 million loan to Parallax Enterprises that Souki helped arrange in 2015. The loan was used by Parallax to build two liquefaction plants in Louisiana according to Reuters.

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.

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.

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.

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