Independent exploration and production company Ophir Energy announced Wednesday that its Fortuna floating LNG project in Equatorial Guinea, Africa’s first, is moving ahead under budget. The company has also signed heads of agreements for LNG offtake with six buyers for the plant’s output.

Ophir reduces Fortuna costs, signs offtake deals

MALABO, December 9, 2015 – Independent exploration and production company Ophir Energy announced Wednesday that its Fortuna floating LNG project in Equatorial Guinea, Africa’s first, is moving ahead under budget. The company has also signed heads of agreements for LNG offtake with six buyers for the plant’s output.

Fortuna’s gross capital costs have been reduced from $800 million to $600 million. The plant will be supplied by Ophir’s assets in Block R, which hold an estimated 96.2 bcm (3.4 tcf) of gas. First gas is expected in 2019, with an offtake of 2.2 million tonnes per annum.

Ophir CEO Nick Cooper said the cost of first gas was further reduced by 25 percent during the front-end engineering and design phase. The company is also planning to build a second FLNG unit once first gas is obtained, based on the discovery of incremental 2C resources of 28.3 bcm (1 tcf) in the block.

Ophir’s announcement comes amid falling LNG prices and rising output. Asian prices for LNG have fallen by nearly two thirds since 2014, with the benchmark at $7.20 per British thermal unit on Wednesday. US research and trading company Bernstein sees a global oversupply of 20 million-30 million tonnes persisting through 2018.

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