Ophir Energy shortlists buyers for Fortuna FLNG project

Ophir Energy has finalised commercial terms for LNG offtake from the Fortuna FLNG Project.

The FTSE 250 oil and gas exploration company released an update about the project on Wednesday.

It said it is now in the process of signing heads of agreement with a shortlisted group of counterparties, all of which are globally established LNG Buyers.

The contracts, which offer flexibility to competitively deliver the gas into either the Atlantic or Pacific Basin, have been met with strong interest from buyers with the total requested demand exceeding the available off-take from the project.

It expects all the heads of agreement will be signed by the end of November, and will be followed up a further shortlisting process to select one or two to sign a full sales purchase agreement in the first quarter of next year.

Chief executive Nick Cooper said it is another major step in de-risking the project on the run to a final investment decision.

“We are pleased that the agreements are for a total demand several times greater than the available off-take 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."

The company also noted the estimate of the gross contingent resource on Block R has been increased from 2.6 trillion cubic feet (Tvf) to 3.0 Tcf.

It is expected that the funding options for the project will include project equity, debt, pre-sales of gas, vendor financing and asset divestment.

Ophir also provided a trading update and highlighted that its production for the year to 9 November averaged 13,400 barrels of oil equivalent per day (boepd), with full year production expected to be above previous guidance at approximately 12,700 boepd.