A small Fortuna

Floating LNG – it’s a big business, taking decades to develop and involving the world’s largest vessels and cutting edge technology. Or is it? Elaine Maslin explains how operator Ophir Energy is taking a different tack off West Africa.

Block R, offshore Equatorial Guinea. Images from Ophir.

When it comes onstream in 2020, Ophir Energy’s Fortuna floating LNG development offshore Equatorial Guinea will be Africa’s first deepwater floating LNG project.

Unlike its larger counterparts, such as Shell’s Prelude and Petronas’ PFLNG1 project, it’s rather modest in scale. This is thanks to shallow reservoirs, dry biogenic 99.7% methane gas and benign metocean conditions, which lend themselves to a small-scale, low-cost and low-risk FLNG concept.

It was also partly about good timing, says Oliver Quinn, Ophir’s director of Africa and Global New Ventures. As Ophir was looking through development concepts for Fortuna, Golar LNG, an LNG carrier firm, was branching out into smaller scale floating LNG projects.

Indeed, Golar LNG is already working on its first FLNG project, using the Golar Hilli unit, currently undergoing conversion, for Perenco’s Sanaga Sud and Ebome fields offshore Cameroon. This is due to be delivered in 2017 – timing that means Golar will be able to implement lessons learned from Hilli on Fortuna.

“What is interesting is the simplicity,” Quinn says. “When you come to FLNG, the first thing in your mind is ‘big, complex and expensive.’ But, actually, when you break it [Fortuna FLNG] down, it is none of those things. It is a good example of where simple engineering and logical engineering can unlock something. In 10 years, this could be quite a mainstream development concept.”

The Fortuna project entered front-end engineering and design (FEED) in July 2015 and is on schedule for final investment decision (FID) in in Q4-2016 and first gas in 2020. Production is expected to be around 330 MMscf/d with a plateau of 30 years.

Discovery

Drilling operations on the Fortuna field.

Fortuna sits in Block R, some 140km west of Bioko Island, in the southeastern Niger Delta complex. Ophir took on the license in 2006 and two years later discovered Fortuna, in 1680-1850m water depth, and 800m reservoir depth. In 2009, Ophir hit at the Lykos-1 well. Appraisal wells were drilled in 2012 (Fortuna East-1, Fortuna West-1 and Tonel-1) and then 2014, when it ran a drill stem test (DST) (Fortuna-2 and also the Silenus East-1 well).

The main Fortuna field, which has 35-40% porosity and 1000-1300mD, is estimated to contain some 3.7 Tcf recoverable resource, or 4 Tcf if compression is used, which Ophir plans to.

Ophir, currently 80% interest holder in Block R, had considered a subsea development with pipeline to shore, some 140km away, where there are existing LNG facilities on Bioko Island. But, thanks to the modest topsides processing equipment required for the dry gas, FLNG was the clear winner, using a leased FLNG unit to reduce capex outlay for Ophir.

“As we looked at it, it was clear that small-scale LNG was coming along,” Quinn says. “Golar is maturing the technology and that solution is much better for this gas. Although it is deepwater, it is a very benign marine environment and simple reservoir conditions. Because we have dry gas, you can use a small vessel and do side-by-side loading. You could look at a TLP or remote facilities, but very quickly you get to a point where it is very inefficient, so it was either a tieback or FLNG. As we went along the exploration curve and drilling wells, [small-scale] FLNG emerged in parallel, with different providers, not just the majors, doing it. If we hadn’t had line of sight on LNG, it might have looked different.”

Learnings

Drilling operations on the Fortuna field.

Bringing in Golar gives upstream focused Ophir midstream capabilities, as well as freeing it from capital spending, due to using a leased vessel, and an ability to learn directly from Perenco’s experience with the Golar Hilli offshore Cameroon.

Perenco is looking to tap 500 Bcf of natural gas in shallow water, off Kribi, Cameroon, with lean associated feed gas. It is expected to have 2-3 trains and an eight-year production life at production of 1.2 MTPA. Vessel delivery is due in early 2017 with startup scheduled for Q2 2017.

The Fortuna Golar LNG solution, a four-train 2.6-2.8 MTPA nameplate system, will use a converted Moss LNG carrier, the Gandria, to be owned, operated and maintained by Golar LNG. It will have an NOV external turret and mooring. Keppel Shipyard is performing the vessel conversion, with Black & Veatch as the liquefaction process supplier.

The project is expected to have a 20-year life with 17 wells in four phases. Earlier this year, Ophir had expected to spend US$600 million in upstream capex to first gas, with about $1.5 billion being spend on midstream capex by Golar, mostly relating to the vessel. But, after receiving the EPCIC tenders, that has been reduced to $450-500 million from FID to first gas spending for Ophir.

Phase one will see just four pre-drilled development wells, three on Fortuna, and one on Viscata, but only two are expected to be required to achieve 2.2 MTPA plateau, with standard subsea infrastructure.

Ophir had planned more wells, but the Fortuna-2 DST in 2014 flowed gas to surface at a constrained rate of 60 MMscf/d, exceeding expectations. The implied unconstrained rate was greater than 180 MMscf/d, meant the number of development wells required could be reduced.

The wells will have gravel pack completions, 5in horizontal Xmas trees, rated for 5-15,000 psi, and a standardized well design. MEG will be injected via cores in steel tube umbilicals. The project will also have dual 12in flowlines and risers.

A simple system

“From the sand face to the vessel, it is a very straight forward system because we don’t have that liquid component,” Quinn says. “Later in field life offshore compression will be required, but that’s just managing the pressure decline in the reservoir as normal. Subsea compression is a possibility. We are planning for the assumption at some point we will need compression on the deck.”

Phase two will see five wells drilled in 2024, three on the Silenus East discovery, one at Estrella de Mar, and one at Tonel, to elevate plateau to 4.4 MTPA using second vessel, Fortuna 2.

Phase 3 would see a further eight wells drilled in a 2027-2030 drilling phase (three on Viscata as the phase 3, tied into Fortuna 1 vessel). The same drilling phase would also see one well on the Lykos discover and four on the Silenus hub prospective resources, also tied into Fortuna 2, under a phase 4. Drilling will be executed by Ophir’s drilling team in London.

The second vessel FID date is expected mid-2022, with first production in mid-2025, however, this could be brought forward, depending on the success of both the Golar Hilli offshore Cameroon and the first Fortuna FLNG unit. The second vessel is likely to be a similar size to the first, Quinn says.

“By 2019, the Hilli will have a number of years production experience and Golar will understand how it is working,” he says. “If we are in good shape, it allows us the possibility to bring forward the second Fortuna vessel date.”

Some early engineering work was performed by a consortium of Crondall Energy, Aker Solutions and Subsea 7. This was to provide technical support to the competitive upstream FEED. Two other tendering consortia, comprising McDermott and GE, alongside GE Oil & Gas and Aker Solutions, have competed for the subsea system engineering, procurement, installation and commissioning (EPIC) contract, which is due to be awarded once FID is reached.

Explorer turned operator

As an exploration firm, with limited production operation experience, on a project where the third party vessel and equipment supplier has a key role, how the project is managed is yet to be fully defined.

Worley Parsons is Ophir’s “owner’s engineer,” and Ophir will manage the subsurface and drilling, as well as having supervisors on board the Fortuna FLNG vessel.

“Not many FLNG projects have been completed,” Quinn says. “One of the things we are working through is the best operating model between ourselves and Golar. Combing the two as an operations group will be important.”

Working out a good operating model could be prudent to aid future projects using this technology. Both Golar LNG and Ophir think there are opportunities.

“With proof of concept at Fortuna, it will mean smaller than traditional volumes of gas could be taken out elsewhere in Africa or any other remote location [based on the conditions at each location]. There are 2-3 other places around Africa we think this could work very well. Once we are through FID we will look to pursue other options.”

LNG market

Oilfield services giant Schlumberger had originally taken an increased interest in the Fortuna project, signing an agreement with Ophir Energy that could have seen the firm pick up a 40% stake.

However, Ophir and Schlumberger did not reach agreement on the non-binding heads of terms, and talks soon ended.

While Ophir and Schlumberger could not agree, the service giant said its memorandum of understanding with Golar LNG – to cooperate on the global development of greenfield, brownfield, and stranded gas reserves – remains unaffected.

According to industry analysts Wood Mackenzie, with 50% growth predicted between 2015 -2020, the global LNG market is one of the fastest growing in the world. Yet, the current commodity price slump is creating a challenging market for LNG projects, with reduced demand from Asia coupling with expected oversupply from the likes of Australia, where a string of LNG mega-projects have been under way.