Almotamar.net, Reuters - Yemen's Oil and Minerals Minister Khaled Mahfooudh Bahah said Thursday Yemen was planning to construct a complex for oil refinery and petrochemicals as part of the industrial city it plans to build in cooperation with neighbouring Gulf States.
The Minister added that Yemen was seriously working on construction of the giant project which production capacity is expected to be 200 thousand barrels per day and at a cost of more than $205 billion. He added that Yemen has allocated sites for building the complex along the coastline of the Red Sea and Aden Gulf.
Oil producers in the Gulf Arab States had announced about building many petrochemical projects in Yemen and said they were looking for diversifying their economies away from depending on revenues of exporting crude oil.
Yemen expects its oil production to slip 9% to around 300,000 bpd in 2008 but hopes to steady declines the next year as more blocks come on line, Oil Minister Khaled Mahfoudh Bahah said Wednesday.
“It’s around 330,000 bpd now. We expect a 9% decline in 2008 but we are doing our best to maintain it,” he told reporters, adding that new oil from two blocks would come on line in 2009.
Yemen was actively seeking to attract more international oil firms to develop the sector, Bahah said at an event to promote a bidding round for 11 offshore Yemen exploration blocks in the Gulf of Aden, the Red Sea and the Arabian Sea.
On the other hand, the cost of French energy giant Total's (TOTF.PA: Quote, Profile, Research) Yemen liquefied natural gas (LNG) project has risen to over $4 billion, up over $300 million from previous estimates, Yemen's oil minister said on Thursday.
"The cost will be over $4 billion," Oil Minister Khaled Mahfoudh Bahah told Reuters. "It's not surprising really when you look at what's been going on elsewhere."
A Total spokeswoman declined to comment on the cost rise. The previous estimate for the plant was $3.7 billion.
The project will have capacity to produce 6.7 million tonnes per year of LNG, which is gas chilled to liquid for ease of transport. Construction was due to be completed by the end of 2008.
Total is the main shareholder in Yemen LNG with 39.6 percent, while U.S. Hunt Oil holds 17.2 percent.
The project was to be 40 percent financed by shareholders, while the remaining 60 percent would be debt, Bahah said.