Ophir inks six Fortuna FLNG deals, reduces project costs

  • Project & Tenders

UK-based Ophir Energy Ophir said it has signed heads of agreements for LNG offtake from its Fortuna FLNG project in Equatorial Guinea.

The agreements were signed with six counterparties, all of whom are “established LNG buyers in European and Asian markets“, Ophir said in a statement released on Wednesday.

Furthermore, the gross capital expenditure required to produce first gas from the FLNG project has been reduced to $600 million from $800 million, based on recent input from the ongoing upstream FEED work which is about 50 percent complete, Ophir said.

Ophir is selling 2.2 MTPA of LNG offtake, however the total demand requested under the HoAs has seen the offtake sold several times over.

According to Ophir, the HoAs are based on a variety of different pricing constructs with formulae that consist of either European gas market netbacks, oil indexation or a combination of both and that in some cases include the provision of a floor price.

Offtake under several of the HoAs also incorporates a sharing of incremental diversion income earned above the base contract formula for LNG volumes that are subsequently sold into higher value markets, the company said.

As well as pricing structure, Ophir said it has secured additional elements to its LNG offtake HoAs that are significant for the development of the project.

These include the offer to pre-pay for LNG volumes in substantial quantities over the early years of the contract.

The funds received from pre-payments could cover 30%-50% of Ophir’s total net cost to first gas and could therefore be a major contributor towards funding of the project, the company said.

Separately, Ophir has contracted Fugro to perform geotechnical, environmental and metocean surveys for the Fortuna project. The Fugro Searcher, Fugro Scout, and Fugro Frontier vessels have been deployed for this work, which is scheduled for completion in January 2016.

Fortuna field sits within the Block R licence, offshore Equatorial Guinea which is located in the south-eastern part of the Niger Delta complex. Ophir currently has an 80% working interest.

Ophir is expected to make a final investment decision on Fortuna by mid-2016.


LNG World News Staff





Related news

List of related news articles