Yemen LNG increases Asian sales through China deal
Yemen LNG expects to ship 57 cargoes to Asia in 2011 in a combination of spot, mid-term and long-term sales, Jean-Pierre Cave, commercial and shipping manager with the company, said during a presentation of LNG Summit in Seoul on Thursday.
Of the total, 44 cargoes would be shipped to KOGAS and 11 cargoes to China.
"The shipments to China are part of a mid-term deal," he said. Although he declined to comment on the specific terms of the deal with China, Cave said the duration of the agreement was around three years.
When asked by ICIS about the identity of the two other countries, Cave did not reveal who the receiving parties were as 'it has not been confirmed'.
In 2010, 43 cargoes were shipped to Asia. Out of which, 28 were sent to KOGAS, 10 were shipped to China, two to Japan, two to India and one to Kuwait, Cave said. By March 2010, Yemen LNG will have produced a total of 100 cargoes since the start of production.In October, Yemen LNG offtaker GDF SUEZ signed a deal to supply KOGAS with 2.5m tonnes by 2013 and a separate four-year supply deal with China's CNOOC, although deliveries under the latter contract would not start until 2013.
Cave told ICIS Heren that Yemen LNG would attempt to renegotiate the price under its original sales deal with KOGAS.
"The government of Yemen and Yemen LNG as a commercial company, are both engaged in discussions with their respective counterparts," he said, "We are reviewing if there is any way to come to an arrangement for the price to be readjusted, in relation to the protocol as stated in the sales and purchase agreement (SPA)." The current pricing agreement with KOGAS is due to expire by December 2013. "Price review and adjustments were stipulated in the original agreement with KOGAS," Cave added.
In response to a question on how the political unrest in the country is affecting Yemen LNG, Cave said, "The company is operating and producing as normal. Loading is normal and there is no disruption to supply." However, ICIS Heren understands that Yemen LNG has evacuated some staff from its plant on the back of political unrest in the country.
ICIS Heren further understands that only 7% of Yemen LNG's total production is sold on fixed price basis, while the vast majority of volumes is sold on a basis of a floating price.
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24 May 2012 21:02
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