Yemen to Charge Global Prices for its LNG from Next Year

Yemen is likely to sell its LNG at global market prices next year after negotiations with its buyers.

In August, Yemen told South Korea that it will charge Kogas global market rates as it had lost millions of dollars of potential earnings over recent years because of the low price that Korean state-run firm secured in a long-term deal with Yemen’s only gas export plant, Gulf Times reported.

An agreement came out of the negotiations with France’s Total and GDF Suez at the end of 2012 stipulating the sale of LNG at $7.21 per million British thermal units (mmBtu), Ahmed Dares was quoted as saying in state-run newspaper Al Thawra.

The previous price of $1.50 per mmBtu will hold until the end of 2013, the paper said.

It was unclear from the minister’s statement to Al-Thawra whether Kogas also agreed to start paying the higher price at the start of 2014, Gulf Times said.

Yemen LNG, the country’s largest-ever industrial project, signed 20-year sales agreements in 2005 with Kogas, GDF Suez and Total, which the Yemeni government has since complained undervalue the gas and deprive it of much needed public funds.