Sanaa (Platts)--12Nov2012/225 am EST/725 GMT

Yemen's electricity and energy ministry Sunday signed an agreement with the China National Corporation for Overseas Economic Cooperation, or CCOEC, to build three gas-fired power plants, the Yemeni Saba agency reported.

The plants, each to have capacity of between 400 and 750 megawatts, will be built in Balhaf-Shabwa, Ma'abar- Dhamar, and Hodeida.

Under the agreement, the Chinese company will also build transmission stations and a pipeline to transport natural gas from the Safer area in Marib to Ma'bar city, Dhamar, and Hodeida.

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The pipeline will be a spur line branching off the pipeline that feeds the Yemen LNG plant. Officials have previously put the cost of the project at around $500 million.

The agreement, signed by electricity minister Saleh Sumai and CCOEC Vice President Xie Lutao, includes a provision that the Yemeni electricity ministry conduct a feasibility study through a consulting firm that will be considered as a third party.

Yemen continues to suffer from power outages due to repeated attacks on power supply lines that add to the country's power problems.

It currently generates between 500 and 800 megawatts from the 450-mg Marib gas-fired power plant and other small, old plants in Sanaa, Taiz, Aden and Hodeida.

Yemen produces and exports natural gas from the As'ad al-Kamil field on Block 18 in Marib.

--Fuad Rajeh, newsdesk@platts.com --Edited by Kate Dourian, kate_dourian@platts.com

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