When she left Cheniere Energy in August 2016 to become CEO of rival LNG developer Tellurian, rejoining Charif Souki, with whom she worked when both were at Cheniere, Meg Gentle said it was time for a change.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Related article: Meg Gentle, Tellurian CEO
Almost 16 months later, Gentle is happy with the change she made, even as she remains a significant shareholder at Cheniere and has recruited former colleagues to come to Tellurian, which has proposed a 3.4 Bcf/d export terminal for Calcasieu Parish, Louisiana, that is expected to start up in 2022.
In an interview December 8 with S&P Global Platts reporters and editors, Gentle addressed global supply and demand, project financing, market pricing, different business models and her future.
Excerpts from the interview follow.
"When Cheniere was developing its projects, the next wave came and said, 'We will be cheaper than Sabine Pass.' All we know is they aren't."
"It's hard to know the cost of each individual plant until you have a firm LSTK (lump sum, turnkey) contract. We feel very confident we know our costs. We really challenged Bechtel to strip down everything in the design and go for maximum efficiency and lowest cost."
"What really drives some variation is site-specific. How much preparation of the soil do you have to do? Do you have to move any roads? Do you have to bring labor in from far away? How constrained is the site? That's why we went for more acreage."
"I think the main challenge for marketing right now is the LNG market itself is in an extreme period of transition. The liquidity that all of the US projects are adding, the plants that are under construction today will become about 20% of the LNG supply by 2020. All of that is destination-flexible and the buyers are re-trading it in the market."
"We're entering an environment where buyers can purchase LNG whenever they need it. It's just a matter of price, and so on the buyers' side the pressure to have long-term 20-year agreements as a way to have security of supply is not as great."
"The second is really on the mechanism for pricing LNG. The LNG market is really seeking for an LNG price, so you have a lot of different players trying to find indexes to allow LNG to trade as a market as it should, and not be tied to oil."
"At the same time, they are a little bit gun shy linking to Henry Hub because they did that and then the oil price came way down. So look, the LNG market is in the second-largest integrated gas market in the world today. The largest obviously is North America. It should start trading as a gas market. So, in this environment of extreme transition, buyers are reluctant to commit to any risk profile on a 20-year basis."
The past and the horizon
"The people at Cheniere, look, they were my family, and I consider them to still be my family. And in fact, I'm still a large shareholder of Cheniere, and I'm constantly looking for Corpus Christi Train 3 to reach FID and go forward."
"Overall, there's going to be room for both of us, and I think we'll do business with each other as well."
"No regrets. Never have regrets. It's been a real adventure to start Tellurian and grow not only the business model but also the staff."