Yemen to divert 35 LNG cargoes to Asia in 2011
The company has already diverted 25 cargoes to Asia out of 85 shipped this year from its plant at the Arabian Sea port of Balhaf-says official.
November 8, 2010 11:57 by Reuters
Yemen LNG, a liquefied natural gas venture led by French oil major Total , will divert 35 cargoes originally meant for U.S. markets to Asia next year because of higher prices there, an official said on Sunday.
Income from gas exports is an important revenue source for the impoverished country, a neighbour to top oil exporter Saudi Arabia but without its vast resources, as the Arabian Peninsula state struggles to make up for falling crude revenues.
Yemen is under pressure from Washington to crack down on al Qaeda militants who claimed responsibility for bomb packages sent on planes bound for the United States last month. Militants have sometimes targeted Yemen’s energy industry.
“Today our strategy at Yemen LNG is to exploit the difference of prices between the U.S. and Asia, and to deliver to Asia the cargoes which were originally meant to be delivered in the U.S. to enjoy better price,” Francois Rafin, general manager of Yemen LNG, told a news conference in Sanaa.
He said the company’s production of LNG would increase from 5 million metric tonnes to 6.55 million metric tonnes in 2011.
“We are now planning to divert 30 per cent of the 6.55 million metric tones to be produced during the next year. That is 35 cargoes,” Rafin said.
He said the company has already diverted 25 cargoes to Asia out of 85 shipped this year from its plant at the Arabian Sea port of Balhaf.
LNG demand in the United States, which was expected to be a major importer, has fallen due to massive increases in domestic supply from shale gas.
“The growth in Asia continues to be very strong, the appetite for clean fuel is there,” Rafin said.
Yemen started the production of LNG from the Balhaf plant in October last year.
The $4.5 billion LNG project is the largest-ever industrial project in Yemen, a small non-OPEC oil producer that pumps around 290,000 barrels of crude oil per day.
Rafin said the company shipped gas this year to the United States, China, Japan, Korea, India, Spain, Mexico Chili and Kuwait.
(Reporting by Mohamed Sudam, Editing by Erica Billingham)