Energean Inks $900mn Gas Supply Deal with IPM (Correction)
(Corrects the volume in para 2)
Greek producer, Energean Oil and Gas, January 2 said it has signed an agreement to supply gas from Karish and Tanin fields to Israeli power producer IPM Beer Tuvia from around 2024.
Energean will supply 5.5bn m3 of gas to IPM over 19 years, the annual volume ranging from 0.265bn m³ to 0.38bn m³. The contract is subject to necessary approvals and is contingent on results of the 2019 drilling programme, the company said. The 2019 programme includes the drilling of four wells in Israel and commences with the spud of Karish North in March 2019, targeting 36.8bn m3 (1.3 trillion ft3) of gas.
Energean estimates that the agreement will contribute revenues of approximately $900mn over the life of the contract.
The company has now signed agreements for 4.6bn m3/yr from its Karish and Tanin fields, which is being built with a total capacity of 8bn m3/yr. The fields remains on track for first gas in 1Q 2021, it said. The Karish and Tanin fields are being developed by Energean Israel, a joint venture between Energean with 70% stake and private equity fund, Kerogen, with 30%.
“The signing of this contract ahead of results from our 2019 drilling programme demonstrates not only the attractiveness of the Karish and Tanin fields but the strong incremental demand that we have identified for our gas and we will continue to target additional sales. Our future sales contracts will target both the growing domestic and regional export markets, delivering attractive incremental economics for all of our stakeholders,” Mathios Rigas, CEO of Energean Oil & Gas said.