Oil Minister: Gas to Korea needs alterations

Minister of Oil and Minerals Amir  Al-Aydarous  affirmed that gas prices to Korean markets have not changed for 20 years and need to be revised every five years, noting that the Korean gas prices have been growing since the last period and declined in the U.S. markets.

In a Ramadan evening meeting, dedicated for reviewing the phases of liquefied natural gas and the LNG project, exports and sales agreements the minister said that Yemen has previously signed sales agreements before the formation

of the project which took into account that prices  should be revised according the market variables.

Talks are in progress with senior Korean officials to reconsider prices, the Minister said, affirming that there is a refusal from the Korean side, ensuring that they have a view point that requires further negotiations.

He ensured that their Ministry is seeking to undertake commercial arrangements, create new markets, gain new revenues, reduce costs across the Indian ocean, work on marketing and achieve additional revenues amounting to $13 million for each shipments as well as improve the project’s tactics.

Al-Aydarous  pointed out that the state’s LNG revenues amount to 25 percent and will rise gradually to 75 percent.

The Minister of Oil’s Adviser Mohammed al-Madani noted the project’s significance in supplying the local market with cooking gas. Since the beginning of the gas plants instillation a production capacity ten thousand barrels of cooking gas a day has been achieved.

The contract official Abdulwahab al-Junid presented an explanation  of the gas sales agreements and the benefits as well as proceeds of the LNG project, noting that the company has adopted  opportunity seizing  to launch the project through access to long-term contracts and the diversification of sales between the Asian and American markets, since each market has its mechanism and reference. A price ceiling, seasonal quality and the stability elements at the project’s tender selection have been taken into account.

He reviewed the Yemeni gas contracts with the Korean Kogas which amounts to two million tons annually, the price in East Asia based on the crude Japanese oil’s basket and the second contract with Suez company for 2.55 million tons per year based on Henry Hub gas index in which the buyer provides carriers and arranges shipment.

The third contract is with the Total Company at a rate of two million tons annually in accord with the commitment of the Yemeni NLG to deliver the gas shipments to the buyer’s ports through its four carriers.

General Gas Affairs Director at the Oil Minister, Nada Aman, reviewed the project’s financial, investment and promotional proceeds, as well as the social benefits at the project’s operational areas, pointing out that the revenues of the shipments’ shifts amounted to $ 671 per shipment.

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