In The Sweet Spot Of Economics And Public Policy

The shift from natural gas importer to exporter has occurred in the U.S. over a remarkably short period of time. We’ve periodically written about this (see U.S. Natural Gas Exports Taking Off and The Global Trade in Natural Gas). Only a few years ago Cheniere Energy (LNG) was investing in facilities to import Liquefied Natural Gas (LNG), anticipating that the U.S. would need to rely on foreign suppliers such as Australia and Qatar. The Shale Revolution changed all that, and the conversion of planned regasification plants to liquefaction began.

The story of how this shift occurred is only complete when the role of Cheniere’s founder Charif Souki is included. Greg Zuckerman’s wonderfully absorbing 2013 book, The Frackers paints colorful portraits of several key protagonists, and Souki is among them.

A Lebanese immigrant to the U.S., Souki’s early career was with a small U.S. investment bank where he raisedmoney for deals in the Middle East, relying initially on his father’s contacts in the region. He was quite successful but eventually became tired of the deal making and travel. For several years he and his family lived in Aspen where he ran a restaurant. The relaxed lifestyle was a welcome change, and he enjoyed the regular visits of stars such as Jack Nicholson and Michael Douglas. However, the restaurant business wasn’t lucrative and eventually with his savings low he decided to shift directions again.

Given this background, Charif Souki was an unlikely energy pioneer. However, he applied his deal-making skills to the energy business and eventually wound up running tiny E&P company Cheniere Energy. The best part of the coverage of Souki in The Frackers describes how he convinced other investors to back him in developing LNG import facilities, only to subsequently have to raise more capital to convert them for export. It must have taken all his sales and deal-making skills to follow up one compelling vision with another, but he did.