Ophir Energy has announced that it has finalised commercial terms and is currently in the process of signing Heads of Agreement (HoAs) for LNG offtake from the Fortuna FLNG Project with a shortlisted group of globally established LNG buyers.
The offtake contracts offer flexibility to deliver the gas into either the Atlantic or Pacific Basin. Ophir Energy has said that the total requested demand under the HoAs has substantially exceeded the available offtake from the FLNG project.
Prior to agreeing terms, each of the LNG buyers has completed due diligence on the Fortuna FLNG Project. Ophir said that it expects all of the HoAs to have been signed by the end of November 2015. A further shortlisting process will then follow, resulting in one or two of the LNG buyers signing full Sales and Purchase Agreements (SPAs) in 1Q16. Ophir said that this timing is in line with the planned project Final Investment Decision (FID) in mid-2016.
Fortuna resource and funding
Equipoise (ERCE) has increased its estimate of the gross contingent resource on Block R of the Fortuna field complex from 2.6 trillion ft3 to 3 trillion ft3. An additional 0.8 trillion ft3 of low risk gross prospective resource (0.7 trillion ft3 risked) is also available and included in the base case planning for Fortuna FLNG.
Management also includes a further 0.3 trillion ft3 of contingent resources in the base case that is associated with the implementation of compression later in field life. The approved development scheme will be further certified by ERCE at FID, at which point resources convert to reserves and reserves are booked for the Fortuna FLNG development.
Ophir also said that it is progressing its funding arrangements for the Fortuna FLNG Project. It is expected that the funding options for the FLNG project will include project equity, debt, pre-sales of gas, vendor financing and asset divestment.
Nick Cooper, CEO of Ophir, said: “The fact that the Fortuna FLNG Project delivers economically attractive returns in the current price environment and is attracting quality downstream partners is testimony to the relative cost competitiveness of the project. The finalisation and signing of Heads of Agreement for the offtake with leading LNG players, is another major step in derisking the project on the run to FID. We are pleased that the agreements are for a total demand several times greater than the available offtake volume, but are not surprised because the project can deliver volumes into both the Atlantic and Pacific Basins in the top quartile of greenfield LNG project economics.”
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/floating-lng/11112015/ophir-provides-fortuna-flng-update-1609/