Total hopeful of Yemen LNG production restart
French energy giant and LNG player Total hopes to restart LNG production in the future at the Balhaf facility operated by Yemen LNG in which Total has a 39.6 percent interest.
Other partners in the project include U.S.-based Hunt Oil (17.2 percent), South Korea’s SK Innovation, Hyundai and Kogas (a combined 21.4 percent) and Yemen’s state-owned YGC and state organization GASSP (a combined 21.7 percent).
Total acts indirectly, as a shareholder or via personnel assigned to the joint venture, the company said in its recent update on the situation at the facility.
The company’s expatriate employees left Yemen in 2015, as the operator stopped all production of chilled gas at the plant as fighting in the country pushed near. At the time, the liquefaction plant was put in a preservation mode.
Total noted that its actions since 2015 as a Yemen LNG shareholder have been solely intended to ensure the safety of local employees, and preserve the Balhaf site so that it can resume LNG production once peace has been restored in Yemen.
In April 2017, Yemen LNG informed Total that the U.N.-recognized government of Yemen had requisitioned some of the Balhaf facilities, which were de facto unused, for the coalition forces supporting the government.
Yemen LNG complied with the order by the Yemeni government. Two distinct areas were established. They are fenced off and have their own separate entrances. Responsibility for managing the requisitioned areas has been transferred in full to the coalition forces, with Total not having any information on how the requisitioned areas are being used.
Since 2015, neither Yemen LNG nor Total have received any profit, compensation or advantage of any kind related to this situation. In fact, since 2015, Total and the other foreign shareholders have continued to finance Yemen LNG at a loss, to preserve the site and continue supplying power and water to local communities. The Balhaf plant has, therefore, remained in good condition.
Earlier in February, the government hinted at restarting production in 2019, however, in its update Total said it considers that the site cannot resume operations safely in light of the security and political situation at both the national and local levels.
“The damage to the Yemen LNG pipeline in June 2019 is evidence of that,” the update reads, with Total adding it hopes it will be possible to restart LNG production in the future.
The Balhaf LNG plant consists of two parallel processing trains with a total production capacity of 6.7 million metric tons per year.