Fortuna FLNG Fiscal Terms Executed
The legal and fiscal framework for the Fortuna floating LNG project offshore West Africa was announced May 2 by UK-listed independent Ophir Energy.
Ophir said that it, Equatorial Guinea's government, state oil firm GEPetrol, and the OneLNG joint venture of Schlumberger and Golar LNG executed the ‘Umbrella Agreement’ that will govern “Africa’s first deepwater FLNG project.” OneLNG is the majority partner in the Fortuna joint venture company.
The agreement reconfirms the participation rights of GEPetrol as partners for 20% of the upstream portion of the project, and for a future potential participation of up to 30% ownership of the midstream FLNG vessel by the Republic of Equatorial Guinea or a designated state company (such as GEPetrol). Signing the Umbrella Agreement was one of the key milestones to be delivered ahead of Final Investment Decision (FID), which Ophir said May 2 remains on schedule for mid-2017 -- with first gas expected in mid-2020.
At its inception, the project was eying an FID in 2016 or even late 2015, but was set back by the low oil and gas price environment and general decline/deferral of upstream investments of recent years, partly due to the global LNG glut that is expected to last into the early 2020s
Ophir added that the impending award of construction contracts is well progressed and on schedule, and that term sheets for loans have been agreed with a consortium of China-based lenders. Fortuna's partners will decide in the coming weeks the amount of the expected 2.5mn metric ton/yr to put under contract at FID from the several offtake options available, added Ophir.
EG's mines and hydrocarbons minister Gabriel Mbaga Obiang Lima (Photo credit: Equatorial Guinea government)
Total capital expenditure for the integrated project will be some $2bn to reach first gas, of which $1.2bn is expected to be debt financed, with full drawdown by the start of commercial operations, said Ophir – all as previously announced.
“The Fortuna project remains on track to become the Africa’s first deepwater FLNG project,” said Jeff Goodrich, CEO of OneLNG.
The Umbrella Agreement “has brought us one crucial step closer to realizing the historic Fortuna FLNG project,” said the country’s hydrocarbons minister, Gabriel Mbaga Obiang Lima, while Ophir CEO Nick Cooper said it is “the important foundation agreement which formalises the value chain economics for the government of Equatorial Guinea and the project participants.”
Golar LNG, which owns 51% of OneLNG and will provide the FLNG vessel, also May 2 confirmed execution of the Umbrella Agreement.
Cote d’Ivoire
Meanwhile African Petroleum, Ophir’s partner in exploration further west along West Africa’s coast, said May 2 that the Ayamé-1X exploration well, offshore Côte d’Ivoire (CI), was spudded April 29 using the Seadrill West Saturn drillship. Exploration is believed to be targeting oil, but although there are producing gasfields offshore CI.
The well, operated by Ophir Energy, is located on the CI-513 licence. Ophir and African Petroleum each hold 45% interests, with state Petroci holding the other 10%. The Ayamé -1X well is targeted to reach a total planned depth of 5,459 meters, of which 2,835 metres water, in 30 days. A commercial discovery would be “truly transformational” for African Petroleum, said its CEO Jens Pace.
Mark Smedley