Ophir Energy has signed heads of agreements (HOAs) for liquefied natural gas (LNG) offtake from the Fortuna FLNG (floating LNG) project in Block R, offshore Equatorial Guinea with six counterparties, all of whom are established LNG buyers in European and Asian markets.
Furthermore, the management estimate of the gross capital expenditure required to first gas has been revised downward from $800 million to $600 million (i.e., from $640 million to $480 million net to Ophir’s 80% working interest) based on recent input from the ongoing upstream front-end engineering and design (FEED) work.
Ophir is selling 2.2 million tons per annum (Mtpa) of LNG offtake; however, the total demand requested under the HOAs has seen the offtake sold several times over. The HOAs are based on a variety of different pricing constructs with formulae that consist of either European gas market netbacks, oil indexation, or a combination of both, and that, in some cases, include the provision of a floor price. Offtake under several of the HOAs also incorporates a sharing of incremental diversion income earned above the base contract formula for LNG volumes that are subsequently sold into higher-value markets.