Ophir Energy has finalized commercial terms and is in the process of signing heads of agreements for LNG offtake from the Fortuna FLNG project in Block R, offshore Equatorial Guinea.
In a statement issued on Wednesday, Ophir Energy said that the deal was reached with a shortlisted group of counterparties, “all of which are globally established LNG Buyers.”
According to Ophir, the total requested demand under the heads of agreements (HOAs) has “substantially exceeded” the available offtake from the project.
“Ophir expects that all of the HoAs will have been signed by the end of November. There will then follow a further shortlisting process to select one or two of these LNG Buyers with whom to sign full Sales & Purchase Agreements (“SPAs”) in Q1 2016. This timing is in line with the planned project Final Investment Decision (“FID”) in mid-2016,” Ophir said in a statement.
The company also said that an independent evaluator of oil and gas reserves, has increased its estimate of the gross contingent resource on Block R from 2.6 Tcf to 3.0 Tcf. An additional 0.8 Tcf of low risk gross prospective resource (0.7 Tcf risked) is also available and included in the base case planning for Fortuna FLNG.
Nick Cooper, Chief Executive Officer 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.”