‘It’s Frustrating Not To Achieve FID For Fortuna’

Hopes for First Gas By 2022

Ophir Energy has described, as very frustrating, its inability to reach Final Investment Decision for the Fortuna Floating LNG facility in 2017.

The financing for the project, located off Equatorial Guinea,“is the last remaining major milestone before the project can reach FID, and it was very frustrating not to achieve this in 2017”, the company says in its latest update. “We take confidence from Fortuna’s robust, low break even economics with low development costs and world class flow rates that contribute to arguably the most competitive greenfield LNG project in the world today”.

Ophir says that Fortuna FLNG is potentially a transformative project for Ophir. “For a relatively limited forward investment, we are looking to launch a world class development that will offer significant, annuity-like cash flow for 20+ years.

“An annual global LNG demand growth of around 4-5%, combined with a forecast slowing of LNG supply growth beyond 2020 and a tightening supply/demand balance has positioned Fortuna well as it enters production from 2022. A benefit of the current commodity price slump is that we have been able to lock in lower unit pricing for the development.

“We are working towards reaching first gas in 2022, when we can look forward to annuity-like free cash flows from the asset of approximately $150Million per year at current prices”.
Late in 2016, Ophir selected Gunvor Group as preferred off-taker “on attractive commercial terms, as we announced a Brent-linked, free-on-board offtake agreement”.

Upon execution of the commercial terms Gunvor would underwrite the contract capacity of the Gandria FLNG vessel of 2.2 MMTPA.

“Under this agreement, we would retain the option for up to two years from FID to secure an alternative, premium priced market for 1.1 MMTPA of this volume. In addition we would retain the option to market the remaining 0.3-0.5 MMTPA of further offtake from the project.
Our vessel for conversion, the Gandria, is expected to enter the shipyard in early March 2018 to commence early works. Separately, Golar’s first FLNG vessel, FLNG Hilli Episeyo, left the same shipyard and reached its operating location in Cameroon in November 2017.

The vessel is currently being commissioned prior to delivery of its first commercial cargo. The delivery of this first cargo would represent an important step in the de-risking of the midstream component of the Fortuna FLNG project”.

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