Yemen LNG: Knight Associates Lloyd’s List


Managing Director of Knight Associates, Daren Knight, is interviewed for an article by  Hal Brown of Lloyd’s List, regarding his knowledge and experience of Yemen LNG security. The original article can be found HERE


 

Attack on Yemen LNG plant will lead to major firefight, warns ex-Commando

Thursday 16 April 2015, 13:45
by Hal Brown

AN attack on the Yemen LNG export plant would result in a “major firefight” due to the stringent security protecting the country’s prized asset, a leading security professional has told Lloyd’s List.

Knight Associates Managing Director, Daren Knight

Knight Associates Managing Director, Daren Knight

The plant in Balhaf stopped production and exports this week due to the conflict between rebels fighting for control of Yemen.

Yemen LNG evacuated personnel amid security fears and ships have been diverted away from the plant.

The 6.7m tonnes per year plant has not yet been directly attacked, but the deepening conflict is enough to stoke concerns at Yemen LNG, which says it will “continue to survey the situation”.

In the past, rebels have regularly attacked pipelines carrying Yemeni gas. Rebels have been “probing” over the years, Knight Associates managing director Daren Knight told Lloyd’s List.

Knight Associates is a security firm covering both land and maritime operations, Mr Knight being a former Royal Marines Commando who has been involved in security operations for gas vessels sailing to and from the Yemeni plant.

The importance of the plant to the Yemeni economy — oil and gas account for 90% of the country’s foreign currency earnings — means plant security is extremely high.

The Yemeni military patrol the external area outside the plant, and inside the plant a French team provide all the internal security, says Mr Knight.

A three-mile exclusion zone exists around the plant — no one is allowed access unless they are part of an LNG carrier loading operation. Patrolling this exclusion zone are French patrol boats and the Yemeni navy with gunboats. Outside the exclusion zone, the Yemeni navy provides an escort for all LNG carriers.

In addition, private security firms provide maritime counterterrorist teams on vessels that sail alongside the LNG carriers, even searching the ships. “Security there is second to none,” says Mr Knight. “If there was an attack on the plant, there would be a major firefight.”

The Yemeni plant is a “vital financial asset”, he said, pointing out that shutting production and exports would have an impact on international trade. “They will want to get it up and running as soon as possible as it’s a major export asset.”

Yemen LNG has not yet given a timeframe for restarting production and exports. However, the situation may be out of its hands if shipowners do not sail to Yemen, resulting in there being no vessels available to load cargoes.

Four LNG carriers have been diverted away from Yemen since the conflict escalated, according to industry reports.
The UK P&I Club has issued guidance on Yemeni ports and the issues faced by its members.

In its advice, it said an owner may be able to refuse a charterer’s order to go to a port in Yemen but this will depend on the terms of the relevant charter party and the terms of any war risk clause.

Some experts fear that removing Yemeni LNG cargoes from the market could hamper LNG freight rate rises. Taking the plant offline removes 2.8% of global LNG volumes on longhaul legs — most volumes are on long-term contracts to Asia — implying at least a 3% drop in fleet utilisation, hence a negative for 2015 LNG carrier rates, according to DNB Markets’ analysts.

Around eight or nine loadings take place every month, according to Lloyd’s List Intelligence.

Whether LNG carriers load there once the plant is back up and running will be up to individual owners. “It’s a case of risk versus reward,” said Mr Knight.


 

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