Yemen sends 1st LNG shipment,seeks to allay fears

By Mohamed Sudam and Mohamed Ghobari BELHAF, Yemen, Nov 7 (Reuters) - Yemen dispatched its first liquefied natural gas (LNG) shipment on Saturday from a $4.5 billion Total-led plant, as the leader of the violence-torn country sought to soothe security concerns. The first shipment left the export terminal at Belhaf for South Korea aboard a Korean tanker, carrying around 149,000 cubic metres of LNG. "These strategic projects need security, safety and stability," President Ali Abdullah Saleh said at the inauguration, adding Yemen would continue fighting the rebel uprising currently raging in the country's north "to the end". The launch of the country's shipment came as Saudi Arabia was carrying out air strikes on insurgents in Yemen's north after rebels made a cross-border raid earlier this week. For Yemen, the Arab world's poorest state, the LNG plant is its largest industrial project. The exports will help offset the impact of rapidly falling oil output on state revenues and help boost economic growth. A second, 160,000 cubic metre shipment was scheduled for Nov. 13, this time on a Yemeni tanker owned by the Yemen Liquefied Natural Gas Company, Minister for Oil & Mineral Resources Amir al-Aidarous told Reuters. Expected revenues from the project range between $30 billion and $50 billion over the next 20 to 25 years, Aidarous told Reuters. Somali pirates preying on shipping in the Gulf of Aden have struck often off the coast of Yemen, which has few resources to stop them. The country is also facing a rising secessionist movement in the south and a growing threat from resurgent al Qaeda fighters. The liquefied natural gas (LNG) plant in Yemen started production in October, eight months after the initial start date. The $4.5-billion project will have two trains with a combined capacity of 6.7 million tonnes per year. The second train would start up 12 months after the first, a Total executive told Reuters last month. Yemen LNG has committed 100 percent of the guaranteed plant capacity under three 20-year LNG sales agreements which includes GDF Suez, Total Gas and Power and Korea Gas Corp (KOGAS) . Construction of the plant started in October 2005. The owners include French oil and gas firm Total with a 39.6 percent stake, U.S. firm Hunt Oil with a 17.2 percent share and Yemen Gas Co with a 16.7 percent stake. Other partners include KOGAS, SK Corp, Hyundai and Yemen's pension fund. At the end of 2008, Yemen held 17.3 trillion cubic feet of proven natural gas reserves, according to a BP statistical review. Most are concentrated in Marib-Jawf fields northeast of Sanaa. (Writing by Raissa Kasolowsky; editing by Chris Pizzey) Keywords: YEMEN LNG/ ([e-mail]; Reuters Messaging: [e-mail]; [phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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