Ophir Energy has signed an umbrella agreement, setting out the legal and fiscal framework for Fortuna LNG, putting the Equatorial Guinea offshore production project on course to reach a final investment decision (FID) this summer.
Fortuna LNG is a US$2 billion floating LNG (FLNG) project that will produce up to 2.5 million tonnes a year (mta). London-listed Ophir plans to tap and liquefy gas reserves from Block R off Equatorial Guinea.
Analysts expect Ophir and OneLNG, the joint venture between Golar LNG and Schlumberger, to decide in the next eight weeks whether to go ahead. If it does, Fortuna LNG could produce its first gas in summer 2020.
The agreement between Equatorial Guinea and state-owned GEPetrol, Ophir and OneLNG reconfirms GEPetrol’s participation rights as partners in 20 per cent of the upstream project. It reconfirms the right of the government of Equatorial Guinea or a state-owned company to own up to 30 per cent of the FLNG vessel.
Golar LNG plans to convert the LNG carrier Gandria into a floating production vessel to support the project. Golar contracted Singapore’s Keppel shipyard for its first FLNG conversion. Hilli Episeyo is due to start trials off Cameroon this autumn.
The project partners have yet to award construction contracts for the Equatorial Guinea vessel. They must also finalise the project finance, decide how much gas to be termed at FID and conclude the sale and purchase agreements.
Golar said in a statement: “Term sheets have been agreed with a consortium of China-based lenders. The counterparties to the financing have now entered into the final documentation stage. The Fortuna partners will decide in the coming weeks the amount of the expected 2.5 mta to put under contract at FID from the several offtake options available.”