Ophir Defers Fortuna FID, Again

UK independent Ophir Energy has deferred its target for a final investment decision (FID) on the Fortuna floating LNG project from this year until 1Q 2018, because of protracted financing negotiations.

It also announced November 23 that a 12-month extension until end-December 2018 to its Block R licence offshore Equatorial Guinea has been agreed with the government there; the Fortuna FLNG project is located on that block (see graphic above, courtesy of Ophir).

Together with its Fortuna FLNG partners, Ophir said it has been pursuing financing discussions with a group of Chinese banks but these have been "taking longer than expected." Concurrently, it and partners have "also been developing alternative funding sources for the project; these alternative options are now at an advanced stage."

Ophir says it expects to be able to select one of these options and to finalise Fortuna FLNG financing arrangements "by mid-December 2017" adding that once the financing arrangements have been selected, Ophir would promptly seek approval from its shareholders and project stakeholders: "The FID, based on this sequence of approvals, would be expected to take place during 1Q 2018."

"Discussions we have had in recent weeks make us more confident than ever that shareholders will realise significant value from Fortuna," said Ophir CEO Nick Cooper.

Cooper had said May 2017 that Chinese banks would finance 60% of the expected $2bn cost of the 2.5-2.8mn mt/yr Fortuna FLNG project. The company last month began awarding some contracts but work won't begin on them until FID is taken.  Target FID on the project has already slipped from mid-2016 to end-2016, then from 1H2017 to late 2017, so the latest deferral is not unexpected.