The French-flagged supertanker Limburg was ablaze off the coast of Yemen after an explosion yesterday, and the ship's owners said they thought terrorists using a boat could have been responsible.

A Yemeni official quoted the captain as saying a small fire on board had set off the explosion. But the owners feared a terror attack was to blame.

"In my opinion, this was a terrorist attack," Jacques Moizan, director of Euronav SA, told Reuters by phone from France. "The crew saw a high-speed vessel approaching on the starboard side... an explosion followed with fire," he said.

Another company official said he had an eyewitness account relayed by the Limburg's captain that a fishing boat had approached the tanker and collided with it.

The French military attache in Aden said there were eight French and 17 Bulgarian crewmembers, and one of the Bulgarians was missing. Yemeni officials said at least 17 crewmembers were in hospital.

A Yemeni official said authorities were still trying to control the blaze and the situation was "very difficult".

Oil industry sources said the tanker, of 299,000 deadweight tonnes, was carrying 397,000 barrels of crude oil and had been approaching port to load more oil.

Industry sources said the vessel had been chartered by the Malaysian state oil company Petronas.

A Gulf shipping executive said the incident could upset the crude tanker market and expected insurance rates to rise.

Yemeni Transport and Marine Affairs Minister Saeed Yafai said one of the ship's tanks exploded, igniting the fire. In a statement to the state-run SABA news agency, a Yemeni official quoted the tanker's captain as saying a small fire on board had set off the explosion.

Euronav SA said the blast occurred while the Limburg was meeting a pilot vessel to bring it into the port of Mina al-Dabah, near Mukalla in the Gulf of Aden.

Lloyds shipping service said a hole had been blown in the side of the tanker. All but one of the eight French and 17 Bulgarian crewmembers were accounted for.

The owners said the missing man was Bulgarian. Yemeni officials said at least 17 crewmembers were in hospital.

Euronav SA is ultimately owned by Belgian shipping group Compagnie Maritime Belge (CMB), of which it is a subsidiary.

French President Jacques Chirac announced that French investigators would go to Yemen to join local experts in examining the tanker. In a phone call with Yemeni President Ali Abdallah Saleh, Chirac thanked him for what had been done to save the crew, an official at the Elysee Palace in Paris said.

Reports of a boat approaching the tanker revived memories of an attack in October 2000 on the US destroyer USS Cole, which was rammed by suicide bombers in a boat packed with explosives in the Yemeni port of Aden. The attack killed 17 US sailors.

Last month, the US navy warned of possible attacks on oil tankers in Gulf waters by the al Qaeda network, blamed by Washington for last year's September 11 attacks on the United States.

But the US Navy in the region said it had no plans to step up patrols as a result of the incident.

Captain Peter Raes, managing director of the management companies for CMB, told Reuters in Belgium the Limburg's captain had told him that an eye witness had seen a small fishing boat approach and collide with it. Raes doubted whether the explosion occurred inside the ship.

"There were no sources of ignition (inside), no electrical lighting," he said. "It was brand new."

The French military attache in Yemen, identified as Colonel Vial, told France's LCI television the blast had occurred at the same time as a small boat approached the tanker, but added: "Other sources tell us it was an accidental explosion."

The double-hulled vessel, bought in 2000, was built in South Korea, Raes said.

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