The two new GSPAs increases the firm’s total contracted gas sales from the Karish project to approximately 7.0 bcm/yr


The Karish development forms part of the Karish and Tanin project. (Credit: C Morrison from Pixabay)

Energean has signed two contracts for the sale of an additional 1.4 billion cubic metre (bcm) per year of gas from the Karish project, located offshore Israel.

The two new gas sales and purchase agreements (GSPAs) increases the firm’s total contracted gas sales from the Karish project to approximately 7.0 bcm/yr on plateau. The deals represent more than $2.5bn in contracted revenues over their life.

Energean said that majority of gas will be supplied to the Ramat Hovav Power Plant, a partnership between the Edeltech Group and Shikun & Binui.

Represented by a second agreement, the remainder of gas will be supplied to an affiliate of the RH Partnership for existing power stations for 15 years.

Energean CEO Mathios Rigas said that the flagship Karish gas project is on track to deliver first gas in 2H 2021.

Rigas added: “We remain committed to continue bringing competition and security of supply to the Israeli gas market even after we fill the Karish FPSO to its maximum 8 bcm/yr capacity.

“The new contracts we signed today further strengthen our secured revenues stream, which is well-insulated against future commodity price fluctuations, and provide cash flows that will support our strategic goal of paying a sustainable dividend to our shareholders.”

Energean seeks buyers for remaining 1bcm/year spare capacity

Energean said it is seeking potential offtaker for the remaining 1bcm/year spare capacity in the Energean Power floating production storage and offloading (FPSO).

In a press statement, Energean said: “Energean is assessing several opportunities in both the Israeli domestic market and key export markets in order to meet this target, alongside reviewing further growth opportunities across the nine exploration blocks that it holds in Israel to further expand its presence in the Eastern Mediterranean.”

The Karish project, which forms part of the company’s Karish and Tanin project, is 70% owned by Energean while Kerogen Capital holds the remaining 30% stake.

The field is planned to commence production next near. It is expected to reach peak production capacity in January 2024.

Earlier this year, Energean has issued a warning of potential delays to deliver first gas from its Karish gas field due to the Covid-19 pandemic.