Natural Gas

Yemen has been producing oil since 1986, but lack of market outlets had kept it from leveraging its substantial gas resources until now. Development is now under way, thanks to the Total-led Yemen LNG project. Generating income that will partly offset falling oil revenue, the project will be a major, long-term driver of growth in this country of nearly 24 million.

In August 2005, the Yemeni government approved the plan by Total and our partners to develop the majority of the 260 billion cubic meters of proved gas reserves in Block 18, located in the Marib region east of Sanaa, the capital. The integrated project has three main components: the gas production and treatment facilities in Block 18, a 325-kilometer pipeline to carry the gas across the desert to Yemen’s southern coast, and an industrial complex in Balhaf comprising a gas liquefaction plant with an annual capacity of 6.7 million metric tons, storage tanks and an LNG export terminal serving world markets.

It took about four years to finish work at the various construction sites and load the first LNG shipments in 2009.

Costing a total of about $4.5 billion dollars, Yemen LNG is the country’s largest-ever capital investment by far.

A strategically important project for Total and for Yemen

Located where the Red Sea meets the Indian Ocean, a major international shipping crossroads, the Yemen LNG plant is ideally positioned to serve the main consumer markets for liquefied natural gas, both in the Asia Pacific basin and on either side of the Atlantic. The development of the Yemen LNG project is driven by long-term LNG purchase and sale agreements signed in 2005 with leading gas companies such as France’s GDF Suez, South Korea’s Kogas and Total Gas & Power. The Total Gas & Power contract requires chartering four LNG carriers for a period of 20 years.

Some of the gas from Block 18 will be reserved for domestic use, primarily to generate power, and will be piped for that purpose through a spur line to the city of Ma’bar.

For our part, the project enables us to further solidify our positions in the LNG industry, in which we are already one of the world’s top three operators. Yemen LNG and Qatargas II, another project that came on stream in 2009, will increase our LNG production 50%. Liquefied natural gas now accounts for more than one-sixth of our oil and gas sales.

An early and comprehensive impact management plan

Nothing could be left to chance in a project of this scale, devoid of preexisting infrastructure, encroaching on sensitive natural environments and located in a country where technical skills are scarce, communities often very poor and sectarian tensions high.

To supplement a baseline assessment from 1997, a second, very detailed environmental and social impact assessment was conducted in 2005, to consider all of the issues raised by the project per World Bank guidelines and requirements.

We and our Yemen LNG partners adhere to a number of principles in addressing the interrelated issues of support for local development, community relations, security, communication, hiring, training and working conditions. They include establishing dialogue, identifying proven disamenities and/or harm and providing fair compensation for them, and minimizing negative impacts while maximizing the benefits for residents.

Developing local skills and capabilities in energy businesses

Yemen LNG created roughly 10,000 jobs during the construction phase, boosting the country’s economy and improving the daily lives of the workers concerned and their families. To ensure safety for all, Yemen LNG and its contractors set up specific programs to teach the rules and procedures and transfer the skills necessary to work on the types of job sites involved.

Another challenge was selecting and training in a short period of time the future teams of technicians responsible for operating the liquefaction plant — about 700 permanent positions and the same number of contract jobs. Yemeni professionals will eventually make up 90% of the workforce, holding positions in operations, administration, support and management. With that in mind, training centers were set up in Sanaa and Balhaf and training programs were developed as part of an engineered skills transfer process for the hundreds of people already hired.

Since 2006, nearly 300 operators and technicians have completed an 18 to 24-month course divided into four segments: basic English, math, physics and chemistry; oil and gas technologies; topics specific to Yemen LNG; and hands-on training at various sites outside Yemen.

Yemen LNG has also hired and arranged training for around 50 apprentice seamen slated to join the crews of the LNG carriers operated by AP Moller-Maersk (APMM) and MISC, formerly Malaysia International Shipping Corporation.

Serving and listening to neighboring communities

Yemen LNG’s sustainable development policy aims to tangibly improve the living conditions of communities near its operations and relies on the involvement of those communities and on listening to and understanding their needs. It has led to a number of long-term projects and initiatives, including the promotion of local craft industries, the refurbishment of schools and housing for teachers, water supply and irrigation projects, and support for existing livelihoods such as fishing and farming.

For example, to help some villagers develop another income stream by producing premium honey, Yemen LNG brought in French beekeeping experts to teach some 400 local beekeepers the most effective techniques, supervising the planting of more than 30,000 jujube trees (known locally as Elb trees), and furnishing the villagers involved with the supplies and equipment they need to start their own businesses.

Preserving the integrity of natural environments

Mapped out based on prior impact assessments to minimize its natural and human environmental footprint, the gas pipeline was rerouted in several places to avoid farming or other areas considered sensitive by local communities.

The Balhaf site, chosen over eight others, had a number of assets in terms of building the plant and LNG carrier traffic, including a deep natural harbor and natural protection against ocean waves during the monsoon season. Yet coastal facilities were redesigned during construction to protect the coral reef. Home to roughly 80 species and specimens believed to be 400 years old, this ecosystem is vital to all underwater marine life. Cooling water in particular is discharged far out at sea to minimize the effect on water temperature.

In addition, 1,500 coral colonies threatened by the passage of ships were moved 600 to 800 meters into waters with less traffic. This successful transplantation — the largest ever undertaken — is monitored regularly by experts from Creocean, a French consultancy that specializes in coastal and marine environmental matters.

Yemen LNG is a partner of the International Union for the Conservation of Nature (IUCN), is working with the Yemeni authorities to prepare a comprehensive coastal zone management plan, and is teaching local fishermen ways to preserve fishing stocks. It is one of six pilot sites chosen by Total to test an increasingly ambitious biodiversity protection policy.