A cadet and petroleum engineering graduate of Texas A&M University, Class of 1949, Walter L. Williams has seen many changes in the oil and gas industry over the course of his career. His broad perspective comes from having been a roustabout; from running his own independent E&P firm, Texoil Inc., and taking it public; and from being a consulting engineer to a commercial banker.

Today, he is dealing with the business of global natural gas flows as a board member of Houston-based Cheniere Energy Inc. and Cheniere Energy Partners LP. Cheniere imports—and may eventually export—liquefied natural gas (LNG) at the Sabine Pass LNG terminal in Cameron Parish, on the Texas-Louisiana border. Built by Cheniere, it began operation in 2008.

This is not the first time Williams has been involved in a major energy infrastructure project. The first was during the Korean War, when as a member of the U.S. Army Corps of Engineers, he served for about 18 months in France. There he worked to build a diesel and products pipeline to Germany.

Today, Cheniere is in the midst of a regulatory approval process before the Department of Energy and the Federal Energy Regulatory Commission to convert its Sabine Pass terminal facility for bi-directional service. It already imports, regasifies and stores international LNG cargoes, and can send them back out to U.S. and international markets. Sendout capacity is 4 billion cubic feet a day.

The new twist? It seeks approval to be the first U.S. terminal to liquefy domestic natural gas, exporting it as LNG. Construction could begin as early as 2012, with first exports estimated by 2015. It proposes to have liquefaction capacity of 7 million tonnes per annum. Non-binding MOUs have already been struck with Morgan Stanley Capital Group and ENN, a Chinese gas utility.

Williams also currently serves on the advisory council of the Dwight Look College of Engineering at A&M.

Investor: What drew you to the oil and gas business?

Williams: When I entered A&M, I knew I wanted to be some kind of engineer but didn't know which discipline I wanted to pursue. I had never been in an oil field but I noticed those people all had jobs, so I chose petroleum engineering. I've never regretted that choice.

When I graduated, I became an engineering trainee for an independent that's now long gone, American Republics. They sent me to Silsbee, Texas, near Beaumont, a producing field where I roughnecked for about six months. Later I was appointed field engineer, and then came to their Houston office to be a staff engineer.

Investor: How did you transition to forming Texoil?

Williams: My employer was sold to the Sinclair Oil Co. in 1955 and I joined a small independent for about three years, until its financing ran out. I was laid off, so I became a consulting engineer for some banks.

Then, in 1963, I met Bill Hoehn from Memphis, an automobile dealer who invested in oil and gas. He had asked me to review some Louisiana drilling prospects…he later said he wanted to go into the business, so in 1964, we started Texoil, with him providing the seed money. I ran it for 32 years.

Investor: What was your strategic focus?

Williams: Almost entirely Louisiana. I think we drilled maybe one well in Texas. Drilling costs were higher there, but due to the lease rental situation, it was easier to get a lease and easier to sell a good prospect in Louisiana. We operated 90% of the prospects we sold. About two years after we started, Dan Smith joined us and he oversaw the prospect generation.

Investor: Why did you sell it?

Williams: We had built it up, had about 37 employees and took it public in 1994 on the Nasdaq. But every company reaches that point where you have to decide whether to merge it, go public or sell it. We chose to merge in 1996 with one of (Houston independent) Frank Lodzinski's companies, as a way for him to go public, and because Bill wanted to cash out.

Investor: How does an oilman get into LNG?

Williams: I had met Charif (Souki, Cheniere co-founder and chairman) when I was still at Texoil. When I resigned in 1996, when Texoil was finding a merger partner, he called me the very next day. He was buying a public shell and wanted me to join him as vice chairman. Our main thrust at first was exploration and we did a 3-D shoot in the transition zone in Cameron Parish—close to where the LNG terminal is now.

Investor: How did an E&P company become a leading LNG operator?

Williams: That was Charif's idea…based on projections that there would be natural gas shortages and price spikes in the U.S. He deserves a great deal of credit (for his foresight). It was a natural evolution.

Investor: We have so much gas from shales, and LNG projects around the world. Don't you fear an LNG glut?

Williams: If you look at the situation in England or Europe, the price of gas is quite high, and it's even higher in Asia. There is growing demand for gas all over the world. It's a process of getting supply to where the demand is. We can import gas in liquid form today, store it and export it. We've done it. Now we are working to add liquefaction technology to Sabine Pass.

Investor: What advice stands the test of time?

Williams: Attend all the industry functions and luncheons you can. This industry is all about contacts and your reputation.