Two consortia of oil services companies have been selected to compete for an EPIC contract on Africa's first floating LNG project through two front end engineering and design contracts.
The move will pitch McDermott Marine Construction and GE Oil & Gas against Subsea 7 and Aker Solutions for work on Ophir Energy's Fortuna FLNG project offshore Equatorial Guinea.
The project, which will be Africa's first newbuild, open seas, FLNG project, according to Ophir, will see the development of Ophir's assets in Block R, containing some 3.4 Tcf estimated mean recoverable resources, in 600-1950m water depth. Final investment decision (FID) expected in 2016 and first gas in 2019.
Ophir also thinks the project could handle a second FLNG unit, thanks an an incremental 1 Tcf of 2C resource discovered and available to be developed, and a further 900 Bcf of "low risked prospective resource." However, an investment decision on a second vessel would not be made until first gas from Fortuna, says Ophir.
Nick Cooper, Chief Executive Officer of Ophir, said: “The potential application of a second leased FLNG vessel in Block R is an exciting advance. This would accelerate the production of contracted resource and expand the total resources base to be commercialized. A second vessel would be synchronized with the cash flow from the initial trains, thereby minimizing capex exposure to Ophir and materially increasing the Fortuna FLNG Project’s overall value.”
Golar LNG was earlier contracted to build, own and operate the FLNG vessel, the Gimi, as well as conduct a FEED study for the midstream element of the project, which is due to start shortly. Ophir had previously selected Texas-based Excelerate Energy to lead a consortium to build the FLNG project, but this was terminated by mutual agreement.
The FEED contracts with the two consortia, comprising McDermott Marine Construction and GE Oil & Gas UK and Subsea 7 and Aker Solutions, will include subsea development design, and will run as a competition, with a view to both submitting engineering, procurement, construction, installation and commissioning tenders at the end of FEED, with one to be selected for the FID.
Key focus areas for the FEED process will be defining the number of wells required at first gas, the cost of the development and the delivery time of the long lead subsea items, such as subsea trees, that are on the critical path to first gas.
Golar is due to conduct a separate FEED study for the midstream element of the project, due to start shortly. The Gimi is forecast to have a capacity of c.2.2 million tonnes per annum.
Cooper adds: "The selection of FLNG to monetize our Block R resource base has drastically reduced gross development capex to first gas from the c.$3 billion estimates for a conventional LNG plant to c.$800 million for FLNG, and has also reduced development lead time; thereby accelerating first gas by 2-3 years to 2019. These improvements significantly enhance the Project’s upstream internal rate of return."
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