Ophir signs heads of agreements for Fortuna LNG offtake

(Reuters) - Oil and gas explorer Ophir Energy Plc (OPHR.L) said it had signed heads of agreements to sell the offtake from its floating liquefied natural gas (LNG) project Fortuna to six buyers.

Ophir's move comes amid a slump in LNG prices, slowing demand and soaring output.

Shares in Ophir were up 4.5 percent at 91.05 pence at 0819 GMT on the London Stock Exchange, making them the third-highest gainers on the FTSE mid-250 index (.FTMC)

The gross capital expenditure required to produce first gas from the project, which is based in Equatorial Guinea, has been reduced to $600 million from $800 million, the company said.

Ophir, which is expected to make a final investment decision (FID) on Fortuna by mid-2016, said it planned to sell 2.2 million tonnes per annum of LNG offtake.

Heads of agreements are preliminary contracts that can be confirmed when full approvals are received and an FID is made on a project.

Fortuna is one of a number of LNG projects planned when prices were higher. Asian prices for LNG (LNG-AS) have fallen by almost two-thirds since 2014.

The company's Chief Operating Officer Bill Higgs said last month that smaller projects such as Fortuna were more likely to gain an FID than larger projects given the challenging market conditions.

(Reporting By Mamidipudi Soumithri in Bengaluru; Editing by Gopakumar Warrier)