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Umbrella Agreement signed for Fortuna FLNG Project

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Hydrocarbon Engineering,

The Republic of Equatorial Guinea, Ophir Holdings & Ventures Ltd (a subsidiary of Ophir Energy ),OneLNGSA and La Compañía Nacional De Petróleos De Guinea Ecuatorial (GEPetrol) have signed a detailed Umbrella Agreement (UA) to establish the legal and fiscal framework for the Fortuna FLNG Project.

The UA reconfirms the participation rights of GEPetrol as partners for 20% of the upstream portion of the floating LNG (FLNG) project, and for a future potential participation of up to 30% ownership of the midstream FLNG vessel by the Republic of Equatorial Guinea or a designated State company.

These participations create alignment with the Equatorial Guinea government throughout the project value chain from upstream through to LNG marketing.

Final investment decision (FID) for the Fortuna FLNG Project is on schedule for mid-2017, with first gas expected in mid-2020.

The execution of the UA completes one of the four key milestones required for final investment decision (FID), which is on schedule for mid-2017. The other three milestones are the award of construction contracts for the upstream and midstream vessel, the completion of the project finance facility, and a decision on the amount of gas to be termed at FID and signature of resulting LNG sales and purchase agreements (SPAs).

His Excellency, Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons for the Republic of Equatorial Guinea, said: “This agreement is in line with the government’s objective to deliver important projects that monetises our gas, promotes local content and brings world-class petroleum technology to Equatorial Guinea. It also has brought us one crucial step closer to realising the historic Fortuna FLNG project. The participation of Equatorial Guinea’s national companies was critical to Fortuna’s success and to maximising the project’s value at every level of the gas supply chain. The Fortuna Project targets becoming the first choice supplier of LNG for the Gulf of Guinea region.”

Nick Cooper, Chief Executive of Ophir, commented: “The Umbrella Agreement is the important foundation agreement which formalises the value chain economics for the government of Equatorial Guinea and the project participants. We welcome the introduction of Equatorial Guinea’s national companies as project partners and the alignment of interests that this brings [...] The remaining milestones of the construction contract awards, the finalisation of debt and the LNG offtake are as advanced as we had wanted them to be at this stage. The Fortuna FLNG Project therefore remains firmly on schedule for an FID by mid-year.”

Jeff Goodrich, CEO of OneLNG, added: “Signing of the Umbrella Agreement is a significant milestone. It represents an innovative way of doing business, brings alignment throughout the entire value chain to all of the project stakeholders, and provides clear line of sight to FID for the project. The Fortuna project remains on track to become the Africa's first deepwater FLNG project.”

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