Yemen signs 20 years LNG sale agreement [Archives:2005/873/Local News]
Hassan Al-Zaidi
SANA'A, YT. 30 Aug. – The government of Yemen has approved the development plan for the Yemen LNG liquefied natural gas project. The shareholders in Yemen LNG, for which TOTAL is the leader (42.9%), will build a liquefaction plant in the port of Balhaf on the southern coast of Yemen, around 200 Kilometers from Mukalla. The construction contracts will be awarded in the coming days.
The plant will have two trains with a combined capacity of 6.7 million metric tons a year and will be supplied with gas from block 18 located in the central Marib region, around 180 kilometers east of Sana'a. The gas will be transported to the plant by a 38- inch, 320-kilometers long pipeline.
Yemen LNG has signed three long-term (20years) sale and purchase agreements for the plant's output- one with Suez LNG Trading for 2.5 million metric tons a year, one with one Kogas for 2 million metric tons a year and one with Total Gas & Power Ltd., for 2 million metric tons a year.
The Yemen LNG liquefaction plant is scheduled for commissioning in late 2008.
“Yemen LNG is part of Yemen Government plans to develop its gas resources. This new project will strengthen Yemen presence on the Global Oil and Gas market and will provide a unique opportunity for developing Yemen expertise and bring wealth to the country and its people,” says Dr. Rasheed Baraba, Minister of Oil and Minerals and Chairman of the Board of YLNG
The Yemen LNG shareholders are the Yemeni government, represented by Yemen Gas Company (23.10%), TOTAL (42.90%), Hunt Oil Company (18%) and South Korea's Sk Corporation (10%) and Hyundai Corporation (6%).Under the agreement with Kogas, the utility will acquire 6 % interest in Yemen LNG in the near future.
Dr. Baraba added that this agreement is a result of the developing political and economic relations with Korea. The project whose first export shipment will be in 2008, will secure a large income of hard currency. It will furnish a sum of 10 million at the construction stage. This is going to support the unemployment curbing strategy.
It is worth mentioning that this agreement was met with great discontent when it was tabled for endorsement by the parliament. The parliament recommended that the government should cater for a reserve for future electric power generation. A large number of MPs think that it is a depletion of recourses.
The outcome of this agreement will be about $17 milliards within a period of 20 years.
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