Natural Gas: A Promising U.S. Export
News Article Sponsored by Diamond Wire Spring
The event attracted widespread attention, especially in the Gulf Coast region, where several LNG export facilities are under construction, promising outlets for the burgeoning supplies of shale gas in the U.S. and new jobs at a time when the oil and gas industry is otherwise struggling from low prices for the commodities.
Souki was sacked as Cheniere’s CEO in December in a dispute with the company’s board of directors over his intention to expand the business.
So instead of joining Cheniere personnel in toasting the departure of the ship, Souki was in Texas announcing the formation of a new LNG-export company with Martin Houston, a retired executive with BG Group, a world leader in LNG trade, which was recently bought by Royal Dutch Shell.
“It’s the same company all over again,” Souki said of Tellurian Investments. “Cheniere has decided they don’t want to continue the growth, so we’re picking up where they left off.”
In fact, Cheniere is well on its way toward building the capacity at Sabine Pass and at another site in Corpus Christi, Texas, to export LNG at the rate of more than 40 million tons per year – capacity that the company says will represent 10% of the global LNG supply by 2020.
All this comes at a time when Australia and other countries are ramping up their LNG export capabilities, even as demand for gas tapers off in Asia and other regions of the world, and prices for the commodity plummet.
That said, why would Souki and Houston jump in now with another LNG venture?
“Conventional wisdom is very short-sighted. If you look over the long term, demand for LNG continues to be there, especially in light of the fact that gas is becoming the hydrocarbon of choice going forward,” he said, referring to growing concerns over air pollution in China and India, and the recent agreement by the U.S. and nearly 200 other countries to curb their carbon emissions.
Moreover, Souki said in an interview, today’s low prices for LNG will eventually stimulate more demand, requiring new supplies well beyond those under development now.
“It’s simple math,” he said. “There will be a need for more LNG by 2021, 2022.”
Souki sees Tellurian Investments’ debut as well-timed to take advantage of that turn in the market, with the expectation that its first terminal will be under construction at an undisclosed site in Louisiana by 2018 and ready to export LNG within several years.
How will Souki and Houston finance the multi-billion-dollar project?
“With my credit card,” said Souki, once reported to be the highest-compensated CEO in the U.S.
He was joking, of course.
“I don’t have an $8 billion line of credit,” he said, laughing. “But financing is not an issue because Martin and I can fund the initial expenses very easily ourselves.”
Over the long term, he maintained, his reputation for taking Cheniere from near bankruptcy a few years ago to the first LNG exports now, plus Houston’s more than 20 years as chief operating officer of BG Group, will make financing the company relatively easy.
“There’s no shortage of good will in terms of being willing to finance my and Martin’s efforts in the future,” he said.
Click HERE to read article from publisher