BALHAF, Yemen – Yemen hopes to join the international club of gas exporters this year – and reap a desperately needed multi-billion-dollar windfall.
If all goes according to plan, a gas tanker carrying the country’s first shipment of 120,000 cubic metres (more than four million cubic feet) of liquefied natural gas will leave Yemen in June for South Korea.
This maiden cargo of exported gas will mark the culmination of a project launched in October 2005 whose total cost of four billion dollars makes it the largest project ever in the history of the Arabian Peninsula nation.
Yemen LNG, whose major shareholder is French energy giant Total, is pushing hard to complete construction of its LNG plant in Balhaf, a bay on the southern Yemen coast, which is running several months behind schedule.
A notice on the wall of a building at the Balhaf plant is a clear indicator of how vital the project is to the economic future of Yemen, where oil revenues currently make up 70 percent of state revenue.
“Estimates suggest that the government of Yemen will receive between 30-50 billion US dollars during the 20-25 years of operation,” the sign reads.
When a second liquefying unit becomes operational, probably at the end of the year, Yemen will be able to export 6.7 million tonnes of gas annually -- equivalent to 180,000 barrels of oil per day (bpd).
“Yemen is a new player” in the global gas market, Yemen LNG general manager Joel Fort told AFP. It remains a small player nevertheless, with reserves of 259 billion cubic meters.
“The reserves are significant,” Fort said, but “it’s marginal compared to Qatar.”
In comparison, the tiny emirate of Qatar on the northeast coast of the Arabian Peninsula boasts reserves of 25 trillion cubic metres -- the world’s third largest after Russia and Iran.
For Yemen to become a gas exporter of LNG is already a major achievement, however.
Last year it produced less than 300,000 bpd of crude oil, and production is decreasing by five to six percent a year, Deputy Prime Minister for Economic Affairs Abdulkarim Ismail al-Arhabi told AFP.
He expects Yemen’s modest oil reserves to be exhausted by 2020. “Gas will make up for the decrease in oil production,” he said.
The gas will flow through a 320-kilometre (198-mile) pipeline from the Safer fields near Marib, northwest of Balhaf, where Total currently extracts 43,000 bpd of crude.
The pipeline passes through regions controlled by Yemen’s powerful tribes, which often resort to violence and kidnapping foreigners to express grievances and force the government to respond to their demands.
Yemen has also witnessed a recent upsurge in violence by groups linked to his Al-Qaeda group, including attacks on foreign targets and oil installations. – AFP