Date set for Total's first LNG shipment from Yemen

LNG DELIVERY: Total's Yemen operation will deliver its first shipment in May 2009. (Getty Images)

Total's Yemen liquefied natural gas project will ship its first cargo in May 2009, Yemeni President Ali Abdullah Saleh said on Wednesday.

The date for the first shipment was a few months later than the last estimate of early 2009. Rising costs, tight markets for specialist equipment and more recently difficulty in securing finance have led to energy project delays worldwide.

"At the beginning of May 2009, the first shipment of gas will be exported to foreign markets," Saleh told journalists on a trip to the plant.

The project is the largest industrial investment in impoverished Yemen, and will cost a total of $4.1 billion, Yemeni officials said on Wednesday.

The plant will have capacity to produce 6.7 million tonnes per year of LNG, which is gas chilled to liquid form for ease of transport.

The project was about 80 percent complete, the president said. First gas had arrived at Belhaf from the south through a 320 kilometre pipeline from the Marib oil basin, he added. The company was beginning to fill the plant's storage tanks.

Total is the main shareholder in Yemen LNG with a stake of 39.6 percent, while U.S. Hunt Oil holds 17.2 percent.

The plant will be Yemen's first LNG project. It will join other regional LNG exporters Oman, the United Arab Emirates and Qatar.

Qatar, the world's top LNG exporter, has also faced delays as it expands capacity to 77 million tonnes per year in 2010 from around 38 million tonnes.

Qatargas' fourth LNG production facility started up in July, delayed from the scheduled start the previous winter. Other Qatargas projects have also slipped.

Indonesia, the world's third-largest LNG exporter, has delayed its $5 billion Tangguh plant several times, and last week pushed the start-up back to the second quarter of 2009.

Yemen is a small oil producer with output of around 300,000 barrels per day. (Reuters)

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