Ophir Energy expects Fortuna LNG project investment decision by mid-2016

LONDON, Nov 11 (Reuters) - Oil and gas explorer Ophir Energy (Other OTC: OPGYF - news) expects to finalise sales agreements and make a final investment decision on its Fortuna floating liquefied natural gas (FLNG) project by mid-2016.

Ophir's chief operating officer Bill Higgs said the firm is in talks with six or seven buyers representing a mixture of end users, oil majors and traders, and expects heads of agreements will be signed by the end of the month.

Heads of agreements are preliminary contracts that can be confirmed when full approvals are received and a final investment decision (FID) made on a project.

"We move forwards to continue the negotiations with that selected group with the aim of getting to a binding gas sales agreement with 1 to 2 of those buyers by FID in the middle of next year," Higgs said.

The Equatorial Guinea-based FLNG development is one of a number of LNG projects planned when prices were higher. LNG prices have more than halved since the start of last year on a glut of supply.

Higgs said that he expected smaller projects such as Fortuna were more likely to gain a FID than larger projects given the challenging market conditions.

The project is expected to produce 2.2 million tonnes of LNG per year, with first gas slated for 2019.

Higgs said that the duration of the initial sales contracts was likely to be for between seven and 12 years. (Reporting by Sarah McFarlane; Editing by Tom Heneghan)