Yemen state-owned Safer aims to conclude a gas supply deal to Total's Yemen Liquefied Natural Gas plant by the end of November, a company executive said.

'We have another month of negotiations and I hope by then we will have finished,' Safer Deputy executive manager Abdulrahman Al Akwa'a said at a gas conference.

Safer will supply up to 1.2 billion cubic feet per day of gas from Yemen's Marib basin Block 18 to Yemen LNG under a 20-year contract, Akwa'a said. Supply would start next year and will steadily increase to 1.2 billion cfd in 2009, he said.

Akwa'a said he expected the final cost of the LNG plant to exceed the $3.7 billion budget as spiraling labour and raw materials costs take their toll. He declined to estimate by how much the cost had risen.

Delays in signing the gas supply contract with Safer have threatened Yemen LNG's end-2008 start date. The LNG terminal will have output capacity of 6.7 million tonnes a year.

The main shareholders in Yemen LNG are Total with 39.6 per cent, and US Hunt Oil with 17.2 percent.

Yemen stripped Hunt Oil of the concession for Block 18 in 2005 and gave it to state-owned Safer. Hunt had produced from the block for about 20 years with partner Exxon Mobil.

Safer will supply another 100 million to 150 million cfd for power generation within Yemen from February or March next year, he said.Reuters