UPDATE 2-Yemen gas pipeline blown up, output halted after drone attack

Fri Mar 30, 2012 10:21pm GMT

* Militants blow up feeder pipeline to LNG plant after U.S. drone attack

* Explosion blow to Yemen economy, already hit by year of unrest

* Al Qaeda has exploited unrest to seize territory in south (Adds background on Yemen's economy, energy sector)

By By Mohammed Mukhashaf

ADEN, Yemen, March 30 (Reuters) - A U.S. drone attack killed at least five suspected al Qaeda militants in southern Yemen on Friday, and gunmen retaliated by blowing up a gas pipeline, forcing LNG output to be stopped, officials and energy workers said.

The drone set fire to the militants' car in the southern province of Shabwa and killed all its occupants, one official said. One bystander was also killed and five were wounded, officials and residents told Reuters.

Hours later gunmen believed to be militants blew up a pipeline which transports gas to a facility whose leading stakeholder is French oil major Total at Balhaf port on the Arabian Sea, energy workers said.

Residents said flames could be seen from several kilometres (miles) away and a company employee said exports had stopped.

"The explosion took place 28 km (17.5 miles) north of the Balhaf LNG export plant. Production has been halted," an employee of Yemen LNG, who asked not to be named, told Reuters.   Continued...

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