Ophir Energy (LON:OPHR) has signed up Golar LNG for the Fortuna project in Equatorial Guinea.
Golar is to be the midstream partner in the Fortuna project, which will use floating liquefied natural gas processing. It will build, operate and maintain the floating liquefaction and storage vessel and facilities.
“This agreement accelerates the date of first gas and reduces costs in a critical part of the value chain,” said chief executive Nick Cooper.
“We believe the terms of the agreement allow the project to deliver LNG at attractive returns into both Pacific Basin and Atlantic Basin LNG customers. The agreement completes the value chain economics and allows Ophir to confidently plan for first gas, and c. 67,000 boepd of production by mid-2019.”
Golar's Gimi FLNG vessel has been earmarked for the project; this vessel has an annual average capacity of 2.2mln tonnes, with production rates of up to 400,000 million cubic feet (67,000 barrels oil equivalent) per day.
Fortuna is expected to achieve first gas by mid-2019. With the Golar partnership secured the project will now move into the full definition phase.
A mid-stream front end engineering and design (FEED) is expected to be completed by end-2015, while a FEED for the upstream project is expected to be done by the second quarter of next year.
Final investment decision is anticipated by mid-2016, at which point a full charter agreement is expected to be have been signed with Golar. It is anticipated that the Gimi vessel will operate at Fortuna under a 20-year charter.
City broker VSA Capital described the new Golar arrangement as “a step forward” though it also said that Ophir needs to bring in a well-financed upstream partner to the Fortuna project in order to reduce its 80% share of development costs.
“This would be a critical catalyst for the project before FID planned by mid-2016,” analyst Marc Anis-Hanna said in a note.