Total SA will ship the first cargo of liquefied natural gas from its Yemen LNG venture in a “matter of weeks,” and the second production line will start in 2010, an official said.

The first cargo from the 6.7 million metric ton-a-year LNG venture in
Middle Eastern nation will be sent to South Korea under a multiyear
contract with Korea Gas Corp., Francois Ravel, the company’s vice
president of LNG marketing, said today in Beijing. The second of two
units will start in the middle of next year.

“It usually takes a couple of months for a unit to reach full
capacity,” Ravel said, commenting on when the first train will maximize
output. He declined to comment on reports that Total and GDF Suez,
which had targeted the U.S. for about two- thirds of the terminal’s
output, are diverting supplies to higher-priced markets in Asia.

Yemen LNG, the country’s biggest industrial project, was originally
scheduled to start in December 2008 and supply most of its output to
the U.S. The global recession has forced producers to accelerate
maintenance plans and shut down output as Japan, South Korea and the
U.S. reduce purchases.

There’s quite a lot of surplus this year, next year will be worse and
it may peak in 2011, said Frank Harris, global head of LNG at Wood
Mackenzie Consultants Ltd., in August. Producers are diverting cargoes
away from the U.S. as prices of benchmark U.S. gas at Henry Hub have
fallen by 31 percent in the past year.

Total owns 39.6 percent of Yemen LNG and state-run Yemen Gas Co. owns
16.7 percent. Dallas-based Hunt Oil Co. holds 17.2 percent, South
Korea’s SK Corp. has 9.5 percent, Korea Gas Corp. has 6 percent,
Hyundai Corp. owns 5.8 percent and Yemen’s General Authority for Social
Security and Pensions holds 5 percent, according to data posted on
Yemen LNG’s Web site.

Source: Bloomberg

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