Oilfield services company Schlumberger has decided to withdraw from the joint venture with Golar LNG, known as OneLNG, owing to issues with financing.

OneLNG, along with Ophir Energy, is engaged in the development of Fortuna LNG project in Equatorial Guinea.

The dissolution of the joint venture was announced by Golar LNG stating that despite efforts, the partners were unable to finalise ‘an attractive debt financing package’.

It also added that apart from financing, other capital and resource priorities had led Schlumberger to end its participation in the project.

As efforts to finalise an agreed capital structure continue, Golar has stated that issuance of new equity at current price levels is not feasible. However, other avenues to procure financing are currently being considered.

“The project is expected to produce its first gas in the second half of 2020.”

In a separate announcement, Ophir Energy acknowledged the dissolution of the OneLNG joint venture with Schlumberger.

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By GlobalData

Ophir also added that it is currently under discussions with multiple parties to resolve the financial issues.

The Fortuna project, located in Block R offshore Equatorial Guinea, will be one of the first deep water LNG projects in West Africa. It will feature a floating terminal, unlike conventional projects that use an onshore facility to liquefy gas.

The project is expected to produce its first gas in the second half of 2020.

Initial offtake from the project will be around 2.2 million tonnes per annum (mtpa) to 2.5mtpa for a period of 15-20 years, monetising nearly 2.6 trillion cubic feet of the discovered resource.

Ophir signed an agreement with OneLNG in November 2016 to form a joint operating company that will be responsible for developing, financing and operating the project.