Tuesday, March 26, 2019

Equatorial Guinea May Strip Ophir of LNG Project Due to Finance Delays

Posted by May 14, 2018

Equatorial Guinea will force Ophir Energy (OPHRY) out of the company's flagship liquefied natural gas (LNG) project and may scrap it entirely unless long-delayed financing deals worth $1.2 billion are presented to the government by December.

The ultimatum is a blow to UK-listed Ophir, which has set aside $150 million of its own cash to develop west Africa's first deepwater LNG project, Fortuna, by 2022 despite its lack of a track record in LNG and small balance sheet.

"We have a clear idea of who we would give the license to but at this stage we are not prepared to comment," Gabriel Obiang Lima, minister of mines and hydrocarbons, told Reuters.

Ophir declined to comment.

Ophir's license to the gas fields in offshore Block R expires in December.

Lima said another option is to scrap Fortuna and instead pipe gas from Block R into an existing land-based LNG project on Boiko Island, 150 km (95 miles) southwest.

By Oleg Vukmanovic and Wendell Roelf, additional reporting by Colin Leopold at Project Finance International, Ron Bousso in London

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