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Will Carl Icahn Shake up Cheniere Energy and LNG Plant Construction?

For those of you who follow the state of the oil and gas business at all, you will probably know two things by now. First, Houston based Cheniere Energy has been aggressive in the development of six LNG trains on the Gulf Coast at Sabine Pass in anticipation of being able to export LNG to overseas markets as soon as Congress and the Administration finally decide on a strategy that opens those markets to US companies. Cheniere was the first company to obtain approvals from the government to construct the facilities and to export the LNG. Even though the company has been aggressive in the construction of those multi-billion dollar facilities, it has lost money. To correct those issues, the board has made several key changes to its executive team in the most recent expansion phase and that has caught the attention of a number of major investors.

Second, one of those major investors is Carl Icahn, the billionaire investor who is known for shaking up boards of directors, selling off companies and improving investor returns for his fellow investors. According to the Houston Chronicle, the Houston Business Journal and the Securities and Exchange Commission filings, Icahn’s company has just purchased an 8.18% stake or 19.4 million shares of stock in Cheniere.

According to the Houston Business Journal, in his filings with the SEC, Icahn has said that, “..He wants to discuss the liquefied natural gas producer and exporter's business plan, capital spending and executive compensation. He added that he may also seek a seat on Cheniere’ s board of directors.”

Not only is he likely to shake up the board, executives and the investors, he is likely to take advantage of the construction of the LNG plants to turn a tidy profit for the investors.