Ophir chooses a winner for Fortuna work

Joint venture of US’s McDermott and Italy’s GE tipped to beat Subsea 7 and Aker Solutions to land integrated subsea contract

A joint venture comprised of US-based McDermott International and ­Italy’s GE is tipped to be awarded an important integrated subsea contract by UK independent Ophir Energy for its Fortuna floating liquefied natural gas project off Equatorial Guinea.

McDermott-GE is believed to hold the edge over a group composed of Subsea 7 and Aker Solutions, its only rival for the job, ­after a long-running design competition.

A well-placed source said “we believe (McDermott-GE) is the favoured one” for what will be an engineering, procurement, construction, installation and commissioning contract.

This package will cover an initial four-well subsea production system (SPS), along with umbilicals, risers and flowlines (SURF), all installed in about 1800 metres of water in Block R off Bioko Island. Speaking to Upstream late last week, Nick Cooper, Ophir’s chief executive declined to elaborate on the status of the SURF-SPS bid process, saying only: “We have decided on a winner for the subsea hardware”.

This initial subsea infrastructure is due to supply more than 330 million cubic feet per day of gas to an FLNG vessel leased from OneLNG, a joint venture between Golar LNG and Schlumberger.

Under a multi-phase scheme, as many as 13 new wells could be needed to tap Fortuna’s 3 trillion cubic feet of gas.

This initial FLNG vessel is expected to have a capacity of 2.2 million to 2.5 million tonnes per annum, and will access about 26 tcf of gas.

An additional FLNG vessel is also being seriously considered. A final investment decision on Fortuna is due to come in mid-2017 once multiple work strands have concluded.

An umbrella agreement between the Fortuna partners and the Equatorial Guinea government is due to be signed within weeks, and will define the project’s legal and fiscal framework.

A term sheet has been signed for the provision of a debt facility with a consortium of Chinese banks, familiar to Golar, and a deal is set to be concluded in the second quarter.

Cooper said: “Golar has deep lending relationships with Chinese groups, and they seemed to be the best source of funds for this project.

“We are completely benefiting from Golar’s years of relationships with these parties.”

Discussions with four LNG offtakers are ongoing and these are due to be closed out soon, with Cooper saying “that on day one we will deal with one or two of them.”

Ophir has struck a number of recent deals to limit its financial exposure to the Fortuna project.

It said that it will not invest more than $120 million of the $2 billion of capital expenditure required to get to first gas, while generating a return of more than five times.

Cooper said Fortuna will benefit from the lessons on Perenco’s Kribi FLNG project off Cameroon, which is another Golar LNG-based scheme.

“The design of the Perenco and Ophir vessels is all off-the-rack technology, so it’s all about how it bolts together and how the vessel is refitted.

“We really benefit because we’re copying the Perenco blueprint but, more importantly, (the Fortuna FLNG vessel) is going to be in the same yard (Keppel in Singapore) and the timing looks like it will be exactly the same people doing the same (vessel conversion) job twice.”

He said that “in terms of schedule certainty, this should really help us.”

First gas is expected in mid-2020.

OneLNG’s Gandia vessel is currently sitting off Batam Island and is due into Keppel in the coming weeks — ahead of a final investment decision.