Pipeline attack to cut Yemen LNG cargoes

Limited effect: due to the scheduling of annual maintenance Yemen LNG is only expected to cut cargoes from Balhaf by four following last week's pipeline attack

The closure of the Yemen liquefied natural gas terminal, after its feed pipeline was blown up last week, is expected to cut its super-cooled gas exports by about four cargoes.

Gunmen blew up the 38 inch gas pipeline that links Yemen's Block 18 to the LNG terminal at Balhaf on the Gulf of Aden in retaliation for a US drone attack that killed at least five suspected Al-Qaeda militants hours earlier, Reuters reported.

"Yemen LNG confirms the sabotage," Yemen LNG, which is run by France's Total, said in a statement late on Friday.

"Production has stopped but the loss of production is expected to be limited to four cargoes as the LNG plant was due to shutdown on April 15 for annual maintenance."

The $4.5 billion plant was also forced to close in October 2011 after its feed line was blown up by suspected Al-Qaeda militants.

But the quick repair of the pipeline and the rescheduling of annual maintenance at the terminal to coincide with the repairs allowed Yemen LNG to deliver all the 106 LNG cargoes it agreed to sell last year.

The attacks on Yemen LNG's supplies follow a series of attacks on oil pipelines which have intensified the country's economic crisis since early 2011.

Although attacks and labour disputes have disrupted Yemeni oil exports, which amount to less than 0.5% of global supply, several times, the closure of Yemen's 6.7 million tonne per year LNG export terminal is more significant for energy markets.

Protecting pipelines in a sparsely-populated, mountainous and increasingly lawless country is difficult, leaving Yemen LNG highly exposed to further attacks, according to Reuters.

The company delivers LNG - gas cooled to liquid for export by ship - under long term contracts to GDF Suez, Total and Korea Gas Corporation.

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