An agreement between the Equatorial Guinea government and the partners of the massive Fortuna FLNG project has paved the way for financial investment decision in mid-2017. The parties signed an umbrella agreement that establishes “the full legal and fiscal framework” for Fortuna, which is set to become Africa’s first deepwater FLNG project. The agreement confirms the participation of national oil company GEPetrol as a 20 percent stakeholder in the upstream phase of Fortuna and a potential ownership of 30 percent on the midstream FLNG vessel in the future. The stake in the midstream portion could be owned directly by the Government of Equatorial Guinea or by another designated state company, which could include national gas company Sonagas.
“This agreement is in line with the government’s objective to deliver important projects that monetizes our gas, promotes local content and brings world-class petroleum technology to Equatorial Guinea,” said Gabriel Mbaga Obiang Lima, the Minister of Mines and Hydrocarbons of Equatorial Guinea. “The participation of Equatorial Guinea’s national companies was critical to Fortuna’s success and to maximizing the project’s value at every level of the gas supply chain.”
By signing the umbrella agreement the Fortuna partners cleared an important hurdle as they move to deliver first gas by 2020. Cutting down capital expenditures and confirming project partners has delayed the project reaching financial investment decision. In November 2016, Ophir Energy and OneLNG, a joint venture between Golar LNG and Schlumberger, signed an agreement to establish a joint operating company develop the Fortuna project in offshore Block R. The total cost of the integrated project is expected to be $2 billion, 60 percent of which is expected to be debt financed.
“The Umbrella Agreement is the important foundation agreement which formalizes the value chain economics for the Government of Equatorial Guinea and the project participants,” said Nick Cooper, Chief Executive of Ophir Energy. “We welcome the introduction of Equatorial Guinea’s national companies as project partners and the alignment of interests that this brings.”
Fortuna FLNG will be featured at Africa Oil & Power 2017, with representatives of the Government of Equatorial Guinea, Ophir and Schlumberger participating on the program to discuss the project.