Yemen LNG yields first production into glutted market

Into a world already oversupplied with LNG capacity, yet another production project has come online.

Warren R. True
Chief Technology Editor-LNG/Gas Processing

HOUSTON, Oct. 15 -- Into a world already oversupplied with LNG capacity, yet another production project has come online. Total has announced that the 6.7-million tonne/year (tpy) Yemen LNG plant produced its first LNG from the first of two planned trains. The second train remains under construction.

The announcement did not specify to which customer this first production was to be sent, saying only that the plant’s first cargo is “scheduled in the coming weeks.” Three gas sales agreements were signed in 2005 with Kogas, GDF-Suez, and Total Gas & Power Ltd.

The $4.5-billion project supplies gas from Block 18 in the Marib region of central Yemen through a 320-km (nearly 200 miles) pipeline to the LNG plant at the port of Balhaf on the country’s southern coast of the Arabian Sea.

Yemen LNG consists of Total (39.62%), state-owned Yemen Gas Co. (16.73%), Hunt Oil Co. (17.22%), SK Energy (9.55%), Korea Gas Corp. (6%), Hyundai Corp. (5.88%), and the Yemen General Authority for Social Security and Pensions, which goes by GASSP, (5%).

Counting this first train of Yemen LNG, this year has seen nearly 30 million tpy of new production capacity come on line.

Sakhalin added two trains of 4.8 million tpy each earlier in the year. Qatargas 2 started up its 7.8-million tpy Train 4 and hopes to start up the 7.8-million tpy Train 5 by yearend.

In Asia, debottlenecking at Malaysia Dua was to have added 1.5 million tpy at some point in the year. And Indonesia’s 7.6-million tpy Tangguh formally began operations but has been plagued by outages and is currently shut down.

At last week’s World Gas Conference in Buenos Aires, BP’s Ton Hayward said the project would produce from both trains this week, declining to specify amounts or destinations.

Expected to start up very early in 2010 is Peru LNG’s 4.4-million tpy plant.

Contact Warren True at warrent@ogjonline.com.

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