Yemen gas cartel

Vol 14, PW 10 (04 Nov 10) News in Brief

Cartel is a dirty word for most people, but not if you are the minister of oil and minerals of Yemen.

Addressing delegates at Petrotech-2010 on November 1, Salem al-Aidaroos woke his deep-sleeping audience out of its slumber with a bizarre suggestion. “If you can have oil cartels,” asked al-Aidaroos, “why can’t we have gas cartels If you can’t have a cartel fixing the price for spot or short term gas, at least have a cartel for long term supplies.

” Yemen, said al-Aidaroos, was not benefiting from its long-term LNG contracts with North American and South Korean customers. “Long term LNG contracts are hurting us,” he added.

“These long term contracts of 20 years or more are not good for us.” Al-Aidaroos complained that gas prices are in theory linked to oil prices but the US-based Henry Hub gas index has been recently trading at around $4/mmbtu.

“If the crude price is $80 the gas price should be at least one sixth of that,” he said. “The right price should be $13 or $14/mmbtu.