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Ophir seeks alternative to Chinese financing for African LNG project

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Reuters are reporting that Ophir Energy has postponed its final investment decision on a proposed US$2 billion LNG project in Equatorial Guinea until early 2018 to explore alternatives to Chinese financing.

Fortuna FLNG would be Africa’s first deepwater FLNG plant, moored above a block containing recoverable gas reserves of 3.7 trillion ft3, 150 km off the coast of capital city Malabo.

FLNG is attractive to resource-rich but debt-burdened African countries. Projects can sail into place, drop anchor and begin exporting for much less than the cost of onshore plants, the price of which quadrupled in the 10 years to 2013.

The Fortuna project – in which Ophir is partnered with shipping company Golar LNG and oil services group Schlumberger – is forecast to produce 2.2 million tpy of LNG. An expected start date of mid-2019 was based on it winning approval earlier this year.

In a competitive tender, trader Gunvor edged out Vitol and oil major Royal Dutch Shell to buy up to 100% of the plant’s output for 10 years after pledging to help state-run Sonagas to finance a 30% stake in the project.

Ophir said in a statement that persistent hold-ups on loan deals from Chinese banks had forced it to seek alternative sources of funding.

Three Chinese banks had planned to provide US$1.2 billion in loans for the project, one of which was China State Shipbuilding Corp.

Ophir expects to finalise financing arrangements by mid-December.

For its part, China plans to pour almost US$7 billion into floating LNG projects in Africa, including Equatorial Guinea, Mozambique, Congo and Cameroon.

Read the article online at: https://www.lngindustry.com/floating-lng/24112017/ophir-seeks-alternative-to-chinese-financing-for-african-lng-project/

 

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