India in talks with Total for buying LNG from Yemen

Dec 15, 2004 01:00 AM

In a bid to diversify its energy supply sources, a high-level delegation from the ministry of petroleum and natural gas is expected to leave shortly for Yemen. India, which has been trying to break new ground for its energy requirements, either through acquiring oil equity or getting into bilateral deals, is now in talks with French energy major Total to buy LNG from Yemen.
A large part of the exploration activities in Yemen are carried out by a consortium of energy majors led by Total. Sources said talks had been initiated with Total for supply of, at least, 2.5 mm ton of LNG on a long-term basis.

Since Yemen is opening up and emerging as gas and petroleum source, the delegation will have discussions on crucial issues like price, and collect data on Yemen's reserves. Yemen has been negotiating with India and China for over three years for the marketing of Yemeni LNG. Apart from the Indian and Chinese market, they have been looking out for other buyers too.
From Yemen the supply was abundant, but the demand was very low, sources said. Yemen had offered two bids -- one to India and the other to China, they added. The quantity expected to be annually exported to India and China is 3 mm ton each.

Since Yemen is a new comer in the market, it has no established projects to offer. And this was where Indian companies can use their expertise and fulfil its energy requirements, sources said. India had offered training and consultancy services in refining, pipelines, marketing, research and development and specialised services in the operation of plants, sources added.
An LNG project underway in Yemen in 1997 was the largest single project ever undertaken in the country. The government owns 30 % and France's Total 70 %.

Yemen has launched a new push to increase investments in its oil and gas sectors, including power and petrochemicals, by announcing a policy of flexibility in negotiation and through a commitment to amend existing legislation if necessary to ease the path for new investors seeking to establish operations in the country.
The impetus towards attracting new players into Yemen's oil and gas sector is driven by the country's economic reliance on oil export revenues. According to a World Bank data, Yemen's output is expected to decline by an average of 10 % annually in the period to 2010.

Source: Indian Express Newspapers
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