Yemen LNG launches largest gas export project ever in Yemen [Archives:2008/1211/Business & Economy]
By: Mahmoud Assamiee
Conservative estimates suggest that government revenues over the next 20 years for the largest natural gas project in Yemen so far, a Yemen Liquefied Natural Gas Company (Yemen LNG) initiative, will reach USD 30 to 50 billion.
The project, which is 40 times greater than the average Yemeni large-scale investment, is expected to be one of the top contributors to the macro-economic growth and industrial development of Yemen over the coming years.
President Ali Abdullah Saleh last week inaugurated the first phase of the giant economic project for exporting liquefied natural gas from Balhaf in Shabwa.
The first phase of the project will involve the construction of a 322 kilometer-long pipeline from the gas fields in Safer, Mareb, to Balhaf Port on the coast of the Arabian Sea.
Project director Patrick Logo promised the first shipment of exported Yemeni natural gas from this project by June 2009, if operations proceed as planned.
He explained that the project included two laboratories for liquefying natural gas and two reservoirs for storage, as well as a number of other facilities such as an airport, full accommodation for workers, workshops and administration offices.
Twelve thousand employees will work in the project, 60 percent of them Yemenis. The project also has provided working opportunities to thousands of laborers who have worked in constructing the pipeline.
The president welcomed French investments in Yemen in the fields of energy and industry and affirmed that these investments would get all the support and encouragement needed for realizing join interests.
Oil and gas production started in Yemen in 1986 with production levels exceeding 380,000 barrels per day in 2006. The country is likely to continue to rely on its natural resources to provide for its population of over 20 million inhabitants.
The LNG project is the country's largest-ever industrial investment with a budget of USD 3.7 billion, and the decision to launch it in August 2005 was an important milestone for both the Yemeni government and Yemen LNG shareholders.
The location of Yemen is strategically advantageous as it allows access to all liquefied natural gas markets, both in the Asia Pacific basin as well as to expanding markets on either side of the Atlantic. Proven gas reserves are sufficient to produce and export 6.7 million metric tons of liquefied natural gas per annum for at least the next 20 years to its long-term customers in the North American and South Korean markets, and potentially also to new customers in the future.