Tellurian stock and the downfall of an LNG mogul and pioneer

Tellurian (TELL) stock price has collapsed, and along the way, led to a painful downfall of Charif Souki, one of the top pioneers in the Liquified Natural Gas (LNG) industry. After peaking at $21.76 in 2017, the company has become a penny stock trading at $0.7320. Its market cap has collapsed from over $3 billion to $464 million.

Tellurian stock chart

The birth of Tellurian

Tellurian is an energy company that was started by Charif Souki and Martin Houston in 2016. The idea was an obvious one for Souki, who had been ousted at Cheniere, the energy giant he started in 1996. Cheniere today is a global conglomerate worth over $25.9 billion.

Tellurian’s goal was to replicate what Cheniere did by creating terminals and transport network to export LNG abroad. This is a big market, especially after Russia’s invasion of Ukraine, which led Europe to embrace LNG from countries like Qatar and the United States.

As part of this goal, Tellurian’s goal was to build a giant terminal at Louisiana known as Driftwood that would be the biggest in the country. As you’d expect, that was a big project whose initial estimated cost was about $25 billion. In most cases, such big projects tend to complete over budget.

Driftwood has moved from one crisis to another and its future is at risk. It has lost major long-term buyers like Shell, Vitol, and Total. These long-term buyers made the project viable at the time. But their exit has made it difficult for the company to access funding. 

Therefore, Tellurian, which has spent over $1 billion at Driftwood, is at risk of going bankrupt unless it finds funds quick. In a recent statement, the company expressed going concern issues, which is highly concerning. According to Macroaxis, the odds of distress have risen to 0.48.

The collapse of natural gas prices has not helped. According to TradingView, the price of natural gas has dropped by more than 76% from its highest point in 2022.

Charif Souki woes intensify

The collapse of the Tellurian stock price has compounded woes for Charif Souki, who was once one of the best-paid CEOs in the United States. Charif was fired this week as the company’s CEO. He leaves the organisation with $8 million.

But his problems don’t end there as he is being pressured by his creditors, including UBS. UBS lent him $90 million in 2018 and extended a separate loan of $60 million to Tellurian. While Tellurian repaid the loan, Souki came under intensified pressure as the stock price collapsed.

As the TELL stock collapsed, UBS considered selling off his ranch in Colorado and his real estate brokerage company. His two personal investment funds also filed for bankruptcy as his woes continued.

It is unclear what Souki, 70, will do next after his exit from Tellurian. He could start a consulting company or venture into other areas. In a recent statement, Michael Webber, a well-known analyst in the energy sector said:

“Charif Souki’s legacy within the LNG space has grown increasingly complicated over the past decade, however, there’s no denying that he’s been one of the defining figures of the US LNG buildout over the past two decades.”