Energean Pens More Deals to Supply Karish Gas
Energean has signed two gas sales and purchase agreements to supply 1.4bn m3/yr of gas from the Karish gas project off Israel, bringing total contracted volumes from the field development to 7bn m3/yr, the company said in a London stock exchange filing on September 16.
The new deals will generate over $2.5bn over their duration. The bulk of the gas will be sold to a joint venture between Israeli firms Edeltech Group and Shikun & Binui, RH Partnership. RH won a privatisation tender held by Israeli Electric Corp in June for the purchase of the 1,140-MW Ramat Hovav power plant. Energean's contract with RH runs for 20 years, although annual volumes will drop seven years after Karish's production launch, expected in the second half of 2021. The deal contains floor pricing and exclusivity provisions.
The remaining gas will be supplied to an affiliate of RH for use at other power plants. Supplies will commence when Karish comes on stream and reach a plateau in January 2024,. This contract has a 15-year duration and has floor pricing and take-or-pay provisions.
The deals will require no further capital investments beyond those at Karish North, a deposit adjacent to the main Karish field, Energean said. A final investment decision on Karish North is expected later this year.
Energean will develop the Karish project using a 8bn m3/yr floating production storage and offloading unit. The company's near-term priority is securing offtake for its remaining 1bn m3/yr of unsold capacity.
"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," it said.