Icahn spat leads to billion-dollar fortune for gas pioneer Souki
BOSTON and NEW YORK (Bloomberg) -- Charif Souki has been chasing his fortune in the energy business for two decades. It took getting fired by billionaire Carl Icahn for him to hit paydirt.
Icahn kicked Souki out of Cheniere Energy Inc. in December 2015 after a dispute over the company’s export strategy. Souki, who was Cheniere’s chief executive officer, resurfaced two months later with a company called Tellurian and a plan to produce 5% of the world’s liquefied natural gas by 2025.
Investors cheered, bidding up publicly traded Tellurian Inc., which has valued Souki’s 27.5% stake at $646 million. That, along with $325 million in Cheniere share sales and cash salary and bonuses since 1998, plus the piece of Cheniere stock he held onto, gives him a net worth of $1 billion, according to the Bloomberg Billionaires Index.
“Souki’s always been somewhat of a visionary,” said Vello A. Kuuskraa, president of Advanced Resources International Inc., an energy consulting firm in Arlington, Virginia. “Sometimes he’s ahead of the game, but in general the world always catches up with him.”
“Please don’t take it personally,” Souki said in an April 6 voice message. “But I really don’t want to comment on my personal situation.” Icahn was unavailable to comment for this story, according to his office.
Icahn faceoff
When Icahn began amassing a 13.9% stake in Cheniere in 2015, Souki had already shifted the company’s focus twice. A former investment banker, he started the business in 1996 to produce oil and gas. In 2001, he turned to building an import terminal to keep up with demand for natural gas. That strategy ran right into the U.S. fracking boom that flooded the market with supply and drove prices to new lows. By the time Icahn arrived, Souki was chasing exports.
Amid a weakening oil market and fears of LNG oversupply, Souki advocated doubling Cheniere’s export capacity, leading Icahn, the world’s 38th-richest person with a $19.4 billion fortune, to pressure the board to push him out.
Ranked by Bloomberg in 2014 as the highest-paid U.S. executive, Souki said he was going back to Aspen, Colorado, to become a ski bum. Two months later, Cheniere’s first LNG shipment left port and Souki resurfaced with Tellurian, which he took public through a reverse merger with publicly traded oil producer Magellan Petroleum Corp.
Asian demand
Funded mainly by Total SA and General Electric, Tellurian announced plans for a Louisiana facility that when completed in 2025 will be able to export 26 million metric tons of LNG annually, according to a March presentation. Driving demand is Asia, the world’s largest LNG market, which Souki anticipates growing at an annual rate of 3.9%. Souki’s goal is to meet that demand with gas that is liquefied more cheaply than at Cheniere, according to Madeline Jowdy, senior director of global gas and LNG at Pira Energy Group in New York.
Born in Egypt in 1953, Souki was raised in Lebanon where his father was a Newsweek correspondent, according to a 2013 Foreign Affairs profile. He attended Colgate University and received his MBA from Columbia University, and became wealthy from his work as an investment banker where his fluency in French and Arabic positioned him as a deal maker in Europe and the Middle East.
O.J. connection
Tired of chasing other people’s money, he left banking and moved to Aspen, Colorado, indulging a passion for skiing he developed as a boy in Lebanon. He began investing in the restaurant business, eventually building a portfolio of eateries there and in Los Angeles, where he moved in 1993.
One of them, a trendy Brentwood hotspot called Mezzaluna, rocketed to infamy a year later when Nicole Brown Simpson and waiter Ron Goldman were killed after Simpson had dined there with her family. Football star O.J. Simpson was tried for the killings and acquitted in October 1995. Souki told Bloomberg Businessweek in 2015 that he was astonished at the lack of decency the resulting frenzy revealed. He closed the restaurant in 1997.
He was lured into the exploration business by the promise 3D mapping technology offered and is now leading a team at Tellurian that’s responsible for over 20 percent of the world’s existing LNG production.
“I met him when he had that heretical idea of importing LNG, and I’ve followed his career very closely,” said Anatol Feygin, chief commercial officer at Cheniere Energy, in a phone call. “He’s been instrumental in creating Cheniere and creating the U.S. LNG business model. He is responsible for this revolution as much as any one individual.”
