Sana’a: Yemeni judicial authorities have begun questioning officials over allegations that they sold undervalue liquefied natural gas (LND) to foreign firms during the reign of the former president, Saba news agency said on Wednesday.

“Many officials at the ministry of oil, who are related to the famous gas deals, and other officials at Total in Yemen have been questioned in the continuing investigations” the agency said, quoting a judicial source at the Public Property Prosecution, which is responsible for examining corruption-related cases.

Yemen is now trying to to renegotiate the contracts, and has had some success. Months after the departure of the former president Ali Abdullah Saleh early 2012, the new government accused Saleh’s government of selling cheap gas to the Korean company Kogas, France’s Total and GDF Suez in 2005. The government said that the country has lost hundreds of millions of dollars in opportunity costs from the deals. Yemen officials have been involved in tit-for-tat accusations ever since the information came to the fore.

On Tuesday, the Ministry of Oil criticised the Yemen LNG company for issuing a statement on the deals without consulting with the ministry.

“We are surprised at this inappropriate statement which contradicts the efforts to improve the prices of gas,” the ministry said in a statement carried by the state news agency Saba.

The ministry was referring to an earlier statement issued by Yemen LNG on its website, highlighting the early stages of the deals. The company said that before the establishment of the giant gas plant in Southern Yemen, it had to sign long term Sales and Purchase Agreements (SPA) with potential buyers in order to guarantee funds for the project.

The first contract was signed with Kogas in 2005 and the prices were “comparable and in some cases better than other sales to Korea, including for example, Russian Sakhalin company in July 2005, Malaysia LNG (MLNG Tiga) in July 2005 and Tangguh LNG (Indonesia) sales to Korean buyers in 2004,”

Two contracts were signed with Total Gas & Power Ltd and GDF Suez in 2005 to sell 2.1 and 2.55 million tonnes per annum respectively. The company did not give any details on the prices of the three contracts, but the Yemeni government has recently said that Total bought the gas for $1 (Dh3.67) and the Korean company for $3.15 per million British Thermal Units (BTUs).

The company said the deals were approved by three bodies; ministry of oil and minerals, the parliamentary commission, and the cabinet.

“The Kogas SPA contains a Brent based price formula with floor and ceiling and a five-year renegotiation clause. The Total Gas & Power Ltd and GDF Suez SPAs are linked to the Henry Hub gas price index (American and European market), which was very favourable to Yemen LNG at the time of the signature,”

The company said that it had to sign two complementary agreements with Total and GDF Suez to divert cargoes to the booming Asian market following the collapse of gas prices in early 2009.

The company said: “Negotiations were concluded with Kogas in December 2013 under the contractual price review clause, reaching an agreement for a sales price representing the current Asian market. Negotiations with Total Gas & Power Ltd and GDF Suez are still ongoing and are confidential.”

According to the company’s website, the construction of the giant plant in southern seaport of Balhaf cost $4.5 billion and expected to generate approximately $60 billion over the next 20 years.

The shareholders of Yemen LNG are Yemen Gas Company (16.73 per cent), GASSP (5 per cent), Hunt (17.22 per cent), Kogas (6 per cent), SK Innovation (9.55 per cent), Hyundai (5.88 per cent) and Total (39.62 per cent).

The current government said that world gas prices were hovering between $11 to $12 per million BTU when the deals were signed in 2005.

“We wonder why the former regime has not responded to the accusations levelled against it related to the deals. It should [at least] give reasons to why it sold this public resource at that cheap price.” the government said in a statement on the official website in January.

The current prime minster, Mohammad Basindwa, was one of the leading activists who revolted against Saleh’s regime in 2011.

The government said that it managed to raise LNG prices sold to the Korean company from $3.15 to $14 per million BTU and has asked Total to pay $14 per million BTU.

A day after the government’s accusations, Saleh’s party replied by saying the prices of the 2005 contracts with Total and Kogas were compatible with the international prices which were “low due to scarce and rare demands for liquefied natural gas”.

“Yemen’s demand for amending current prices is natural as there is increasing demand for the gas in the international market.”

Saleh’s party said in a statement published on the party’s website. The party said that it should have been given credit for building Yemen’s biggest ever project.