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    Work on FPSO for Israel's Karish Field Resumes


Energean does not expect a financial impact from the revised schedule.

by: Joseph Murphy

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Work on FPSO for Israel's Karish Field Resumes

Work has recommenced on the Energean Power floating production storage and offloading (FPSO) unit that will be used at the Karish gas field off Israel now that the Sembcorp Marine Admiralty yard in Singapore has reopened, Karish's operator, Mediterranean-focused Energean Oil & Gas, said in a statement on June 8.

The yard was closed in mid-April and did not resume operations until June 2. The closure is not expected to have a financial impact on Energean, the company said, due to contracting structures it has in place with its main contractor and its gas buyers.

Work on the FPSO's topsides is expected to take around ten months and then it will take up to a further four months to tow the unit to Karish, moor it, hook it up and commission it. The vessel's hull was completed at the Cosco shipyard in Zhoushan, China.

Energean also noted that pipelaying and construction support vessels had arrived offshore Israel in May. Near-and-onshore pipeline installation has been completed and work has begun on the 80-km pipeline that will pump Karish's gas to shore.  Pre-commissioning of the system is expected to be finished in the fourth quarter, which is "well within the project schedule," Energean said.

Progress on subsea infrastructure is also "progressing in line with expectations," the company noted. Installation of manifold and subsea isolation valves is slated for completion by the end of this month, and work on the risers that will connect the field's three production wells to the FPSO should begin in the fourth quarter and be completed in early 2021.

Following the upwards reappraisal of the adjacent Karish North field's reserves by DeGolyer & MacNaughton (D&M) in April, Energean has shored up sales contracts for a further 0.6bn m3/yr of its gas, it said. Energean now has firm contracts in place for the sale of 5.6bn m3/yr of gas at plateau off Israel. Energean said D&M's competent person's report would enable it to continue marketing its gas resources in both Israel and overseas, with the aim of fully utilising the FPSO's 8bn m3/yr capacity.

All of Energean's Karish sales contracts contain take-or-pay and floor pricing provisions, reducing risks to the company's cash flow and limiting its exposure to price volatility.