Yemen in negotiations with India and China over marketing of LPG

Jul 08, 2001 02:00 AM

Dr. Rasheed Ba-Rabba', Yemen Minister of Oil and Minerals, disclosed that negotiations are going on with India and China over the marketing of Yemeni LPG. He added that his Ministry is trying its best to win the Indian and Chinese markets and is also trying to find out other buyers.
The supply is abundant but the demand is dim, he said. Talking on the same subject, Mr. Taha Al-Ahdal, Director General of Gas at the Ministry said that a delegation from the Yemeni Company for Marketing LPG is on a visit to India and China searching the possibility of export. Yemen has offered two bids. The first is with the Indian Gas Industry which has asked for last price and conditions of sale.
The second bid is with a South China project; but no agreement has so far been reached. He added that the quantity expected to be annually exported to India and China is 3 mm tons each. Mr. Ahdal affirmed that a weakness has emerged as Yemen does not have any project and establishing it depends on finding a buyer. Yemen is a new-comer in the market while there are strong rivals who could snatch the two markets of India and China. The rivals could be from the region or outside it.

What intercedes Yemen is its historical relations with India and also its nearness on one hand and the developed political relations with China and Yemen's increased imports on the other which may encourage China to approve buying the Yemeni LPG. Mr. Ahdal also said that marketing of the LPG is different from oil.
Marketing of gas is based on finding a buyer and signing an obligatory agreement for 25 years. Then installations related to the export are built. In the case of oil, after drilling it is directly exported from the wells. Oil is much in demand. He continued: "Our natural market is South-east Asia. The Ministry is trying to market the gas in South Korea as its is considered to be the second biggest consumer in Asia after Japan." He further said: "During 1998-99 we had signed a sale agreement with South Korea; but the economic crisis which hit the area, hindered the sale."
When asked about the possibility of exporting gas to Europe, Mr. Ahdal said: "European markets receive their gas through pipelines which costs less. Should we desire to sell, then the price would be lesser than those for Asia because Europe gets its supply of gas from neighbouring gas producing countries. It is note worthy that the volume of reserve gas is 10 tcf."

Source: Yemen Observer
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