Ophir Energy brings on Golar as mid-stream partner at Fortuna

5th May 2015 07:28

Unlike its competitors, Ophir Energy has decided to move ahead with investments at its Fortuna LNG project offshore Equitorial Guinea, accelerating the date of first gas.On Tuesday, the company named Golar LNG as its mid-stream partner for its Fortuna floating liquefied natural gas (FLNG) project.The heads of terms agreement inked by both companies establishes the conditions for Golar to build, operate and maintain the floating liquefaction and storage vessel and facilities at Ophir's operated Fortuna floating liquefied natural gas project in Block R, Equatorial Guinea.The vessel to be used will be Golar's Gimi FLNG ship, under a twenty charter and at a competitive rate when compared with US liquefaction tolls."The Gimi is expected to have an annual average capacity of 2.2 mtpa at a reservoir production rate of up to 400,000 mscfd (c. 67,000boepd) with first gas expected mid-2019," Ophir explained.The estimated number of development wells required for first production has been reduced from seven to three. That means upstream capital expenditure to first gas is now forecast to be $800m instead of $1bn, with further costs saving anticipated, Ophir added.With a view to financing future stages of development of the Fortuna project the company will now move to bring an upstream partner into the project and is reviewing its options for incorporating the Fortuna LNG project into its debt structure.The agreement will be ratified this week by Ophir's partner in Block R, GEPetrol.Final investment decision (FID) on Fortuna is expected by mid-2016.Nick Cooper, Chief Executive of Ophir Energy, commented: "This agreement accelerates the date of first gas and reduces costs in a critical part of the value chain. [...] At a time when many other greenfield LNG projects are decelerating, Ophir has elected to accelerate the Fortuna FLNG Project to secure what we believe will be a better market opportunity at first gas, and to lock in anticipated reductions in upstream development costs."As of 08:10 shares of Ophir Energy were higher by 1.32% to 145.9p.