Emergency travel and transportation restrictions due to novel coronavirus outbreak could potentially delay production start from Karish gas field


The $1.5bn Karish-Tanin gas development project located in the Levant Basin offshore Israel. (Credit: Pixabay/C Morrison)

UK-based Energean Oil and Gas has issued a warning of potential delays to deliver first gas from its Karish gas field off Israel, due to the outbreak of the novel coronavirus in China.

Construction is underway on Energean’s floating production, storage and offloading vessel’s (FPSO) hull that is intended to serve the Karish field in Liuheng Island in China.

The novel coronavirus, which was identified in Wuhan, China, has spread to other countries alarming public health authorities across the world.

The World Health Organisation (WHO) has also declared the outbreak a “Public Health Emergency of International Concern”.

In order to avert the spread of the coronavirus, the affected countries have issued emergency travel and transportation restrictions. This has impacted the availability of labor and resources in the affected areas, including Liuheng Island.

The firm said that its EPCIC contractor TechnipFMC issued a notice in relation to the travel restriction constituting a Force Majeure event, that could result in claiming an extension to the contract delivery time.

Energean issues notice to buyers of Karish gas and relevant counterparties

In response, Energean has issued corresponding notices to buyers of Karish gas and other relevant counterparties.

The firm, however, said in a statement: “Work on the hull is ongoing and, at this stage, Energean re-iterates that the Karish Project remains on track to deliver First Gas in 1H 2021.”

Energean said it working with TechnipFMC to avoid or mitigate any delay for the project, which is planned to commence production in first half of 2021.

“Energean highlights the importance of guaranteeing the health and safety of its employees and contractors and will act in accordance with instructions and guidance from the UK and Chinese health authorities,” the firm further noted.

Energean Israel, which is a 50/50 joint venture between Energean Oil and Gas and Kerogen Capital, owns the $1.5bn Karish-Tanin gas development project located in the Levant Basin of the Mediterranean Sea, offshore Israel.

The project involves the development of the two fields, Karish and Tanin, using FPSO unit. The FPSO will have an oil storage capacity of 800,000 barrels and gas production capacity eight billion cubic metres of gas per annum.