No more spot LNG from Yemen as Balhaf closes

Saudi bombing missions against Houthi fighters in Yemen have led to the shutting down on April 14 of Yemen LNG's 6.7m t/y Balhaf terminal.

This has sent spot LNG prices up by at least $0.20/mmbtu as companies like GDF Suez, Total and South Korea's state-owned KOGAS scramble to replace their long-term Yemen LNG contracts. "Supplies from Yemen must be replaced if the situation worsens," says a GAIL source.

"I doubt Yemen will restart operations anytime soon. "Yemen LNG (7.9%) was India's fourth largest spot LNG supplier after RasGas (32.4%), Qatar Gas (26.5%) and Nigeria LNG (22.6%).

In the past four months from January 1 to April 23, Yemen supplied 697,772-cubic metres in five cargoes to India. GDF Suez supplied two to GSPC and one to Reliance; Total supplied one to Reliance and one to Petronet-LNG while GSPC's last cargo from Yemen through GDF Suez arrived on March 27.

Unrest in Yemen has been on the increase since 2012 and in January this year Yemen-LNG operator Total briefly declared 'Force Majeure' at Balhaf before closing one of two trains early this month before announcing a complete shutdown on April 14. In a statement Yemen LNG said: "Due to further degradation of the security situation in the vicinity of Balhaf, Yemen LNG has decided to stop all LNG producing and exporting operations and begin evacuation of site personnel.

The plant will remain in preservation mode."