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First Train of YemenLiquid Natural Gas to be Opened in 2008

SANA'A- Work on the long-stalled Yemen Liquid Natural Gas (LNG) project is moving ahead smoothly with the first train scheduled to go live on time by the end of 2008, The Ministry of Oil said. According to sources who quoted The Minister of Oil and Minerals, Khalid Bahah as saying that more than 1500 people are currently working on the site at the port of Balhaf in southern Yemen.

That number will rise to 6000 by the beginning of 2007 as the pace of construction moves up several gears, Bahah added. He said "Everything is on schedule. The first train will be operating by November or December 2008 while the second will follow by the middle of 2009." The trains have total capacity of 6.7 million tones per annum. Work has begun on the LNG project, despite outstanding issues with the US Hunt Oil company, an 18% shareholder in the scheme, according to a media report last week.

Media reports quoted Amin Al-Madhaji, the deputy project manager for the Joint Venture Company, as saying that Yemen LNG has begun engineering work for two trains, which will be used to associate gas from the Marib field. It will have a combined capacity of 6.7 million metric tons per year by 2009, Al-Madhaji said, according to a statement in the International Oil Daily in Doha last week. "We hope there will be no delays.

The issue is between Hunt and the government, not Yemen LNG and the government," Al-Madhaji said.

In the LNG Company, Hunt is partnered by France's Total (43%), South Korea's SK Corp. (10%) and Hyundai (6%), and the local Yemen Gas (23%). The project is valued at US$3.3 billion. A consortium of Japan's TKK, South Korea's Daewoo Engineering and Construction, and Dywidag International of Germany has been awarded the contract to build a tank farm serving the plant at Bal Haf. The contract calls for the construction of two LNG storage tanks, each with capacity of 140,000 cubic meters. Detailed engineering is in progress on the first train, which is due to be completed by the end of 2008, Al-Madhaji said. France's Technip , Japan's JGC and US Kellogg Brown & Root took the estimated US$2 billion contract to build two LNG trains in September. Site preparation for the plant is already under way.

Al-Madhaji said that the second train will be completed by mid-2009, according to Al-Madhaji, adding that work on the third and final construction package - involving a 320 kilometre pipeline should begin by May.

He said that a partnership between Amec Spie Capag and Hawk International was awarded the estimated US$250 million contract in October 2005. Long-term customers for Yemen LNG include Belgian Tractebel, at 2.5 million tons/yr, Korea Gas Corp, or Kogas, which will take between 1.3 million and 2 million tons/yr, and Total at 2 million tons/yr. Al-Madhaji confirmed that reserves for the project are pegged at 10.2 trillion cubic feet, lower than previous government estimates.

By Adnan Hizam

© Yemen Observer 2006