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Fafnir can be found in Silverflow's End in Paramina Rift, but only during a snowstorm. The weather will change if you pass through the Frozen Brook, so a good strategy is, after talking to Relj and accepting the hunt (which will trigger a snowstorm in Silverflow's End), rent a chocobo and ride it to the south-west, around Frozen Brook (don't go into Frozen Brook whatever you do) and into Silverflow's End. Another way to do it is to keep going in and out of The Feywood until you see a blizzard in Paramina Rift, then go to Silverflow's End, being careful not to enter Frozen Brook. Regardless, once you get to Silverflow's End and see the raging blizzard, you should spot Fafnir wandering around.

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