Golar was awarded a 20-year tolling contract for its GoFLNG Gimi vessel, which will start commercial operations in the first half of 2019, enabling Ophir and Golar to develop Block R, which is estimated to hold 2.5 trillion cubic feet of natural gas resources.
The previous agreement between Ophir and Excelerate Energy has been terminated by mutual agreement.
Golar, with a market capitalisation of $3.5 billion, is one of the world's largest independent owners and operators of LNG carriers, with over 40 years of industry experience. Its first FLNG tanker, Hilli, is under construction, with delivery expected in February 2017, and is earmarked for Cameroon.
During the 20-year period, Golar will be responsible for the sub-sea well control, receiving, liquefying and offloading the gas to LNG vessels.
Ophir, as the operator of the upstream component of the project, will lease the Gimi. Ophir's responsibility will be to construct and build the sub-sea facilities, drill the development wells, manage the performance of the reservoirs and, together with the Ministry of Energy and Sonagas, to market the gas on behalf of all the upstream parties.
The Gimi is expected to have an annual average capacity of 2.2MMtpa at a reservoir production rate of up to 400MMcfpd (about 67,000boepd).
The Fortuna FLNG project will now move into the full definition phase and Ophir recently appointed Worley Parsons as Owners Engineer to the project.
The midstream front end engineering and design is expected to be completed by end-2015 and the upstream FEED is due to be completed in 2Q16.
The flow rate established by the Fortuna drill stem test (DST) conducted late last year has resulted in a reduction in the estimated number of development wells required for first production from seven to three.
As such, upstream capex to first gas is currently forecast to have been reduced by $US200 million ($A252.26 million) to around $800 million. Ophir will now turn its attention to bringing an upstream partner into the project, as well as reviewing options for incorporating the Fortuna LNG Project into its debt structure.
Golar, with its partners Keppel Shipyard (Singapore) and Black and Veatch, had already committed to the Gimi FLNG conversion in December this year.
Keppel is a global leader in the conversion of floating production, storage, and offloading vessels and floating storage and re-gasification units. It has a track record of close to 120 (regas) conversions. Black and Veatch will provide the liquefaction technology.
RFC Ambrian oil and gas analyst Stuart Amor said of the Ophir-Golar deal: "We believe that this is an important milestone in the commercialisation of Ophir's Equatorial Guinea gas discoveries.
"However, we would expect a muted reaction for Ophir's shares today as we believe that the equity market will give little value to these assets until either Ophir farms out an interest in the upstream part of the project or the project reaches FID. We reiterate our ‘buy' recommendation."
Motley Fool senior energy and materials specialist Matt DiLallo said Golar's new approach to developing LNG projects appeared to be gaining steam.
"It noted that it sees significant interest in additional GoFLNG vessels and has already commenced negotiations with a shipyard to discuss building a third vessel," he said.
"That being said, these are very long lead time projects so today's gains could come and go depending on the market's mood long before these vessels go into service. In other words, investors need to have a very long-term view before chasing this stock."
