Natural Gas in Yemen
In recent years, the economy of Yemen has been strengthened by a new industry based upon a plentiful resource found beneath the sand: natural gas. Since the Yemen LNG project came online in 2005 to process and export this resource, natural gas has climbed to represent almost a quarter of Yemen’s GDP.
The Government revenues from the project represent some 25% of the GDP of the country which is quite significant. But other than generating revenues, Yemen LNG brings value to Yemen in many other forms including knowledge sharing, empowering local businesses, and supporting the development of the country and the youth of Yemen.
As a result, Yemen now produces 6.7 million metric tons of liquefied natural gas yearly, leading to a booming export business that sends nearly 100 ships of LNG exports to consumers around the world.
The design of the plant is 6.7 million tonnes per annum guaranteed production capacity. But we have performed tests and we have demonstrated that we can reach 7.4 million tonnes per annum, which is 10% above the design.
This level of production is made possible by Yemen’s large natural gas reserves, which total 9.15 trillion cubic feet, placing Yemen in the top rank of countries in the region with proven reserves of natural gas.
It is in the Marib and Shabwah regions that Yemen’s largest industrial project to date was placed. With a total budget of approximately $5bn, Yemen LNG is the country’s first and most significant natural gas liquefaction project.
From the main extraction and processing facilities in Marib, Yemen LNG sends natural gas through a 320-km pipeline to its liquefaction facilities at Balhaf on the Gulf of Aden.
The Balhaf plant consists of two production trains, has a dedicated shipping terminal, and has a storage capacity of 280,000 cubic meters.
It is important to keep in mind that Balhaf is a remote area without industry or facilities around, no specialised contractors, no work shops, even no habour nearby. So it is important for us to have our own resources, our own specialists, key vendors of key equipment, and our own equipment.
Yemen LNG is owned by a consortium of shareholders, including Total, Hunt Oil, Yemen Gas Company, SK Innovation, KOGAS, Hyundai Corporation, and GASSP. Under the guidance of this experienced leadership, and with the help of thousands of employees, the company has become a major force for economic growth in Yemen.
Yemen LNG started off with an aggressive Yemenisation program and we are very proud of the fact that we have already reached 90% Yemenisation with most of the support and technical operations functions covered by Yemenis.
LNG produced at the plant is shipped under three major contracts with buyers GDF-Suez, KOGAS, and Total Gas & Power.
In accordance with the agreements, GDF-Suez purchases 2.5 million tons each year, while KOGAS and Total each buy 2 million tons.
To meet the needs of these buyers, 6.7 million tons of LNG are produced at the Balhaf plant each year, all of it conforming to the C3/MCR recognized APCI international technology.
Yemen LNG is keenly aware of the need of the people in the area of the plant and pipeline, and further afield to see the benefits.
We are committed towards our local communities and run the largest sustainable development program ever for an energy company in Yemen. We work very closely with our neighbors in many areas from schools, electricity, water, health, agriculture, and scholarships.
In order for Yemen LNG to operate in a good and a safe environment, it is very important to be accepted by the local communities surrounding us. Yemen LNG feels very proud because in the oil and sector, we are the only company with dedicated staff; we have about 40 full-time staff dedicated to the sustainable development and community relations. This shows how committed we are. Also, with our 5-year program, we are trying to make sure that we have a progressive plan to ensure it is implemented and benefits all people and stakeholders in the area.
The future is bright for the natural gas market at large. Overall LNG trade worldwide has more than doubled in the last ten years and new importers continue to join the market and increase total demand, with the number of nations importing LNG doubling in the last 7 years.
As global populations continue to increase, demand for LNG is expected to continue to rise.
Globally, the industry benefits from natural gas’ reputation as a clean burning, efficient fuel. In Yemen, Yemen LNG strives to be an industry leader in plant availability, reliability, and energy efficiency.
Our plant at Yemen LNG enjoys one of the highest reliability and availability records in the industry. The actual figures that we have been achieving for the past few years have been 98.5%. We have an efficiency rating of 92.5%, which is again one of the highest in the industry.
We are proud of what we have achieved in spite of the challenges. We are determined to continue to be one of the most reliable suppliers of LNG in the world. Our goal is to be on the long term a world-class LNG supplier.