BG signs early Yemen LNG deal

BG plc signed a memorandum of understanding with Yemen LNG Co. that sets a framework for further talks on delivery of liquefied natural gas from Yemen to India. BG has a joint venture with India's Gujarat Pipavav Port Ltd. to build an LNG import terminal at the port of Pipavav in Gujarat state at an estimated cost of $400 million. Yemen LNG plans to build an LNG export project at Balhaf on the Gulf of Aden involving a two-train plant with capacity to export 5.3 million tons/ year of LNG for

May 18, 1998

2 min read

BG plc signed a memorandum of understanding with Yemen LNG Co. that sets a framework for further talks on delivery of liquefied natural gas from Yemen to India.

BG has a joint venture with India's Gujarat Pipavav Port Ltd. to build an LNG import terminal at the port of Pipavav in Gujarat state at an estimated cost of $400 million.

Yemen LNG plans to build an LNG export project at Balhaf on the Gulf of Aden involving a two-train plant with capacity to export 5.3 million tons/ year of LNG for 25 years.

Yemen LNG partners are Total 36%, Yemen Gas Co. 26%, Hunt Oil Co. 15.11%, Exxon Corp. 14.51%, and South Korea's SK Corp. 8.38%. The venture plans to supply the plant with largely developed and dedicated gas reserves in Yemen's Marib area.

BG said that talks with Yemen LNG involve potential sale of 2.65 million tons/year of LNG, possibly to be increased to 5.3 million tons/year: "First deliveries of LNG are envisaged between mid-2002 and mid-2003, continuing for approximately 25 years."

LNG project delay

Middle East Economic Survey (MEES) reports that the Yemeni government has agreed to delay by 2 years construction of the Yemen LNG plant, earlier slated to begin LNG deliveries in 2001.

MEES said Yemen LNG attributed the delay to the failure to find a market for Yemeni gas because of Asia's economic crisis.

Construction start-up has been put back to January 2001 from January 1999, with exports due to begin by 2003, according to MEES.