Balhaf Project:

It is a project for Liquified Natural Gas (LNG) output in Balhaf city that was chosen for the establishment of an LNG plant to liquefy and export the natural gas extracted from Marib city (Block 18). The project is run by Yemen LNG Company, a shareholding company of seven partners (five international and two local shareholders). The commercial production of the project started in November 2009 with an estimated capacity of 6.7 million metric tonnes.

An Overview of the Project:

The project aims to produce 6.7 million metric tonnes per annum (Mtpa) of LNG through the main pipeline from Marib to Balhaf where it undergoes processing to remove water, oils and any heavy gases to avoid clogging while passing through the cooling pipe due to freezing. The cooling process is, then, done in stages until a liquified state is achieved at 1 atmospheric pressure and minus 162 degrees Celsius. The liquified gas is stored in two LNG tanks each having 140,000-m3 capacity and then marketed through maritime carriers.

The LNG project in Yemen started as a preliminary study followed by survey operations for potential sites to establish a liquefaction and export plant in 1995. The main objective was to choose a site for establishing the plant and choose a pipeline route, which brings about a balance between economic viability attainment of the project, limits the environmental impact, and reduces social risks that may arise due to the site establishment. The results of the comprehensive survey and the comparison between the potential sites have reached the conclusion that “Balhaf”, 150 kilometres from Ataq (Shabwah’s capital) and 200 kilometres from Mukalla (Hadhramawt’s capital) is the most suitable site for establishing the liquefaction plant and export harbour as coastal Balhaf has a low level of natural and geographical risks and has natural protection from the monsoon season, which obviates the need for establishing a breakwater or stopping the plant due to rough seas. In addition, the natural depth of the harbour minimizes the need for establishing a long jetty to fill the natural gas carriers and minimizes the need for seabed dredging required for the giant carriers to moor up. The jetty became operational in March 2007 and was used in unloading freighters loaded with cargo of the needed equipment for constructing the project. Hence, the natural depth of the harbour is suitable for receiving the giant carriers of LNG. The year 2004 witnessed the beginning of the practical steps of drilling and laying a main pipeline from Block 18 in Marib to Balhaf for a distance of about 320 kilometres via about 1 meter (38 inches) diameter pipeline. In August 2005, Yemen LNG signed long-term (20 years) gas sales agreements with three of the world’s largest companies, which are France’s GDF-Suez, Kogas of South Korea, and Total Gas & Power Ltd. In addition, four giant carriers were chartered for 20 years to deliver LNG to the USA and Mexico according to the contractual obligations signed with Total. The cost of the project was about $5 billion and was established by many subcontracting construction companies.