The project calls for the construction of two LNG trains at Bal Haf on the southern coast with combined capacity of 6.7 million tonnes a year (t/y) and a 320-kilometre, 38-inch pipeline linking the liquefaction facilities with block 18 in the Marib region, from where the feedstock gas will be sourced.

The FID is expected to trigger very swiftly the award of the two main engineering, procurement and construction (EPC) packages on the project. The bidders for the liquefaction plant are: the US’ Foster Wheeler, with Japan’s Chiyoda Corporation; and Paris-based Technip, with Japan’s JGC Corporation; and US-based Kellogg Brown & Root. For the pipeline package, three teams are bidding. They are: Athens-based Consolidated Contractors International Company (CCC), with Italy’s Saipem; Turkey’s Tekfen, with Technip; and France’s AMEC Spie Capag,with A Hak Pijpleidingenof the Netherlands. The US’ Bechtel and Technip completed front-end engineering and design (FEED) studies some time ago.

Twenty-year SPAs have been signed with Korea Gas Corporation (Kogas)for 2 million t/y, with Belgium’s Suez Energy Internationalfor 2.5 million t/y and with France’s Total for 2 million t/y. Under the terms of the agreement with Kogas, the Korean utility will at some point in the future acquire a 6 per cent equity stake in the venture. At present, the main foreign shareholder is Total, with 42.9 per cent. State-owned Yemen Gas Company owns 23.1 per cent, the US’ Hunt Oil Company– operator of block 18 – has 18 per cent, South Korea’s SK Corporationholds 10 per cent and Hyundai Corporation, also of South Korea, owns 6 per cent.

Citigroupis acting as financial adviser on the estimated $1,900 million debt package for the project, which is likely to be 60-75 per cent covered by export credit agencies and to have a door-to-door tenor of about 15 years. Banks showed strong interest when sounded out earlier in the year (MEED 3:6:05).

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