Bloomberg: It’ll Take More Than Yemen’s LNG Shutdown to Blunt Supply Boom

There’s so much liquefied natural gas set to hit global markets this year that it’ll take more than the shutdown of Yemen’s only plant to threaten supplies.

As rebels seized army positions outside the nearby city of Balhaf, Yemen LNG Co. halted production and exports at its 6.7 million metric ton-a-year facility because of a “degredation of the security situation,” according to a statement on its website Tuesday. Its customer, Korea Gas Corp., and consultants including EnergyQuest and Manaar Energy Consulting, said that’s unlikely to disrupt the markets. Yemen accounts for about 2.2 percent of the world’s liquefaction capacity, data from the International Group of LNG Importers show.

The cost of LNG for delivery to Northeast Asia has slumped by more than half over the past year amid a collapse in oil prices and as supplies swell. About 12 million tons of the supercooled gas will start this year, the most since 2011, with more to flow in 2016, Bank of America Merrill Lynch predicted in a report earlier this month. MORE