LONDON (Reuters) - Ophir Energy (OPHR.L) has postponed its final investment decision on a proposed $2 billion (£1.50 billion) liquefied natural gas (LNG) project in Equatorial Guinea until early 2018 to explore alternatives to Chinese financing, the company said on Thursday.
Fortuna FLNG would be Africa’s first deepwater floating LNG (FLNG) plant, moored above a block containing recoverable gas reserves of 3.7 trillion cubic feet, 150km (93 miles) off the coast of capital city Malabo.
FLNG is attractive to resource-rich but debt-burdened African countries. Projects can sail into place, drop anchor and begin exporting for much less than the cost of onshore plants, the price of which quadrupled in the 10 years to 2013.
The Fortuna project — in which Ophir is partnered with shipping company Golar LNG (GLNG.O) and oil services group Schlumberger (SLB.N) — is forecast to produce 2.2 million tonnes of LNG a year. An expected start date of mid-2019 was based on it winning approval earlier this year.
In a competitive tender, trader Gunvor [GGL.UL] edged out Vitol [VITOLV.UL] and oil major Royal Dutch Shell (RDSa.L) to buy up to 100 percent of the plant’s output for 10 years after pledging to help state-run Sonagas to finance a 30 percent stake in the project.
Ophir said in a statement that persistent hold-ups on loan deals from Chinese banks had forced it to seek alterative sources of funding. It said these are now at an advanced stage, without giving further detail.
Three Chinese banks had planned to provide $1.2 billion in loans for the project, one of which was China State Shipbuilding Corp, industry sources have said.
Ophir expects to finalise financing arrangements by mid-December.
For its part, China plans to pour almost $7 billion into floating LNG projects in Africa, including Equatorial Guinea, Mozambique, Congo and Cameroon.
Reporting by Oleg Vukmanovic; Editing by David Goodman