Building Yemen’s first LNG plant

Yemen LNG

Our projects

Establishing Yemen LNG as an internationalLiquefied Natural Gas supplier

In August 2005, the Yemen LNG project was launched. It is thesingle largest investment project in the industrial history ofYemen, for a total value of almost 4.5 billion dollars.

The project involved:

A 320-km long pipeline from the Marib gas field, in CentralYemen, to the coast.A 2-train liquefied natural gas plant in Balhaf, on the Gulf of Aden, 200 km South-West from Al-Mukalla.

Train 1 has been in operation since October 2009with the first LNG carrier loaded early November,whereas Train 2 came on stream in March 2010.

The Balhaf site, on the Southern coast of Yemen,was chosen for the LNG facility because it offersa natural harbour, protected from the monsoon'swind gusts and sea swells.

It is also a strategic location at the crossroads ofinternational maritime routes. The output fromthe plants requires the movement of 100 LNGcarriers per year, to deliver the LNG to Asian,European and American markets.

The monetisation of Yemen’s naturalresources has been the country’sfocus since the 1990’s.

In September 2005, Yemgas,the Technip-led Joint Ventureequally shared betweenTechnip, JGC and KBR wasawarded the engineering,procurement andconstruction contract for the2-train LNG plant includingutilities and offsites.Client: Yemen LNG Company Ltd (YLNG) with

partners: Total (Project Leader with 39.62%), Hunt Oil(17.22%), Yemen Gas Company (16.73%), SK Corporation(9.55%), Korea Gas Corporation (6%), HyundaiCorporation (5.88%) and Yemen’s General Authority forSocial Security & Pensions (5%)

LNG plant Contractor: Yemgas, a Technip-led jointventure equally shared between Technip / JGC / KBR

Lump sum turnkey contract awarded in September2005

Global LNG production capacity of 6.7 Mtpa

Steady production since November 2009 (train 1) andMarch 2010 (train 2)

Yemen LNG

Yemen

Arabian Sea

Saudi Arabia

A challenge for the Technip-ledjoint venture

Yemgas project scope

This project confirms Technip amongthe first tier of EPC contractors in LNG

In 2009 and 2010, through the delivery of projectsincluding Yemen, Technip will have delivered 57 milliontonnes per year of LNG capacity to its clients, includingthe world’s largest LNG trains in Qatar.

Underpinning this achievement meantmeeting a fantastic challenge made possibleby the commitment of the Technip-ledjoint venture over several years.

It all started in the 1990’s when Technip and its partners carried out the FEED studies for the project. In September 2005,Yemgas signed the Engineering, Procurement and Construction contract with Yemen LNG Company Ltd for the LNGplant:

Engineering, procurement, construction, commissioning and start-up of 2 liquefaction trains with a total capacity of 6.7million tonnes of liquefied natural gas per year.Air Products C3/MR process, with the refrigerant compressors in Split MR configuration to maximise production fromthe two GE Frame 7 gas turbine drivers. 2 full containment storage tanks of 140,000 m3 each.An 800-m long jetty.Overall construction supervision of the entire facilities / utilities.Large-scale infrastructure requirements.

Technip will have been involved inadding around one third to theworld’s LNG production capacity.

Supported by outstanding ProjectManagement skills and a strongorganisation, Technip is capable ofmanaging several of these giganticgrassroots projects simultaneously,even in remote locations whereinfrastructure is not completelyadapted and most of the materialneeds for the project have to bebrought in.

The Yemen LNG contract is oneexample of Technip’s leadingposition among the first tier of EPCcontractors in LNG:

FEED studiesLNG train detailed engineeringUtilities / Facilities constructionsupervisionJoint Venture leadership

The project recordedperiods of up to 15 millionhours without Lost TimeInjury (LTI).

A massive HSE training programmewas central to achieving this result.The site HSE Department’s missionwas to work on the process ofimproving people’s behaviour asthe main way to improve overallproject HSE statistics. Varioustraining modules were providedboth in English and Arabic tomaintain constant safetyawareness:

Site HSE inductionDefensive drivingConfined space entryWorking at heightsCommissioning & start-upsafety

The team

The know-how developed by the Technip Securitydivision over recent years on other projects alloweda site-specific programme to be successfullydeployed at Balhaf with several innovative measures.The quality of the programme has since beenrecognised by many external parties.

Outstanding Security

Security of Personnel consisting of a Meet & Greet procedure, aTraveller’s booklet, accommodation audits and inspections, Security andCultural induction programs on site.

Physical security measures (original concepts developed by Technip)

Security Operations Room aiming at centralising all Security-relatedcommunications.Quick Response Team (QRT) consisting of a permanent Security Patrolinside the site.Main Gate, a pivotal access point in a project site where all personnel,equipment, materials and goods transit.

Security toolbox

Balhaf’s Security Master Plan detailing the responsibilities of eachstakeholder. Established prior to opening the construction site.Appointment of permanent Subcontractor Security correspondentswithin the camps/worksites.Security Instruction book for operational support.Cultural and religious inductions within the “Awareness Program”.

In March 2008, at the peak of construction, some 9,200 people from72 nationalities were working on the construction of the liquefaction plant. The Yemgas management team was just over 200 strong from 35 nationalities.

140 out of the 208 Technip staff – Balhaf April 2009

HSE performance

Yemen LNG

The project’s main challenges

To make the Yemen LNG project the success that is, Technip had to overcome several challenges over the 4 yearsbetween contract award and start up:

Major success factors

Construction market tightness in 2005. At the time of the project launch, several other LNG projects were underwayworldwide, reducing the availability of skilled labour, construction materials and equipment and making it moredifficult to predict costs and schedule.

Technology-intensive and large-size plant in a remote location. Each train is using the Air Products C3/MR process.

Large-scale infrastructure which required building:

a harbour to receive industrial equipment from 60 shipments an airport for employee transfera city to accommodate 10,000 people during construction phase and 700 permanent staff during operations

Security: building such a high-technology industrial project in a location like Balhaf represented a challenge due to theremoteness of the site, its shorefront on the Gulf of Aden and the duration of the construction phase (4 years).Ensuring the security of personnel (whether Client, staff, contractors, visitors or Government bodies) and of thefacilities (plants, harbour and vessels, airport, and equipment) was at the forefront of Technip’s concerns.

Careful planning with a good quality FEED and early realisation of the scale of the challenges.

The selection of proven technologies, equipment and partners from the global LNG supply chain.

First rate project management and allocation of appropriate resources in conventional and less conventional projectmanagement domains.

Pre-negotiated contracts for site preparation and certain critical equipment items that were assigned to Yemgas at EPCcontract award.

A spirit of co-operation: enthusiasm, dedication and hard work of a diverse multicultural workforce.

The support of Yemeni authorities and local population.

Purchases in YemenMost of the plant technical items (pressure vessels, machinery, columns etc.) wereimported due to local unavailability. However, Technip through its Yemgas jointventure implemented at very early project stages a procurement policy to favourlocal supply of goods and services available in Yemen such as: office stationeryand furniture, computers and printers, site consumables, office cabins, airconditioning units, vehicles, safety equipments, telecommunications etc.

Local subcontractorsOne of the Yemgas objectives was to ensure that the local business communitytook part to the realisation of the project. In this way, several million dollars wereallocated to local companies who had the opportunity to discover and developmodern industrial techniques and management.

Camp landscaping and irrigation system for both Client and Contractor camps.Water management: the Balhaf site produces its own water (except drinkingwater).Waste recycling: Yemgas contracted a local company for site domestic andvehicle wastes.Waste donations such as timber, steel and cables.

Recruitment of YemenisProviding employment to local communities has been a main objective andachievement. Over the life of the project, it is estimated that almost 13,000Yemenis have come and obtained a position within the team: office and fieldpositions requiring technical and English language skills, engineers, industrialrelationships, labour, supervisory positions in civil and piping works etc.

Knowledge transferIn order to share the experience of industrial projects among the Yemenis presenton site and give them marketable skills, Technip through its Yemgas joint ventureorganised a wide training campaign in different fields: HSE, quality management,English, camps and catering etc.

HEADQUARTERSTechnip89 avenue de la Grande Armée75773 Paris Cedex 16 France Phone: +33 (0)1 47 78 24 00

LNG / GTL Product LinePhil Hagyard, SVPPhone: +33 (0)1 47 78 27 17Email: phagyard@technip.com

This document is the property of Technip and is not intended to be a binding contractual document. Any information contained herein shall not result in any binding obligation on the part of Technip, orany of its affiliates, and is provided for information purposes only.Technip - Group Communications - March 2011 - Photo credits: Technip

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