Business Political Analysis

Yemen LNG: 30 Months Offline

NY
YLNG Balhaf
Written by Staff

This weekend marked two and a half years since Yemen LNG declared force majeure in mid-April 2015.

YLNG stopped all LNG producing and exporting operations 14 April 2015, evacuated most staff, and said arrangements were in place to protect the Balhaf liquefaction site.

Total, YLNG’s technical leader and principal 39.62% shareholder, declined to provide any current update to NGW. While there’s no indication of damage to the facilities, the FM remains in place.

Built at a cost of at least $4.5bn, YLNG started exports in November 2009 when it looked set to earn handsomely for the country and its shareholders (Total, US firm Hunt Oil, plus Korean and Yemeni entities) from exports to Asia and Europe for decades to come.

The twin-train facility provided 6.7mn metric tons/yr of guaranteed capacity, all of which was dedicated to three long-term offtake contracts to Total, Engie and South Korea’s Kogas. That’s roughly 2% of global installed liquefaction capacity. However, the current global LNG market glut means that missing supply is all but forgotten by the market.

The loss of revenue stream is more tangible for Yemeni state and private entities, as are the difficulties of restoring production while rival Saudi and Iranian-backed forces continue to fight for control of the country.

“In Yemen there are no winners on the battlefield. The losers are the Yemeni people who suffer by this war,” stated Ismail Ould Cheikh Ahmed, the Special Envoy for Yemen of the UN Secretary-General, briefing the UN Security Council October 10.

The UN’s World Health Organisation, according to The Guardian newspaper, last week reported more than 815,000 suspected cases of cholera in Yemen, and 2,156 deaths. That exceeds the 815,000 cases recorded in Haiti in 2010-17, but in Yemen the toll has occurred in just six months. Experts expect the number of cholera cases in Yemen to surpass 1mn by the end of this year. Projects such as the World Bank’s to extend off-grid solar electricity in Yemen remain unachievable, while the country’s core energy and health infrastructure is still being attacked by both sides.

 

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