Energean warns of Karish delays off Israel
Mediterranean-focused Energean has postponed the launch of the Karish gas field off Israel until mid-2022 owing to COVID-19 restrictions in Singapore, where its floating production storage and offloading (FPSO) unit is under construction.
The company previously expected to deliver first gas in the first quarter of next year. Singapore recently tightened restrictions on the movement of people to slow the virus' spread, and this has made it difficult for the Admiralty Yard to mobilise its workforce. The shipyard was also closed for five days in late April after a COVID-19 case was identified.
The 8bn m3/year Energean Power FPSO, which was 95.6% complete as of April 30, is now expected to set sail for Israel in the first quarter of 2022. But "Energean and its contractors are focused on optimising the revised Karish timetable and have identified approximately 30 improvements that are being considered for implementation," the company said.
"Although unfortunate, the revised timetable should not have a material impact on the 15+ year secured revenue stream of our Israeli gas business," CEO Mathios Rigas commented.
Energean also reported taking final investment decisions on two new projects off Israel worth a combined $110mn.
Firstly, the company has signed off on adding a second oil train to increase the liquids handling capacity of the Karish FPSO from 18,000 to 32,000 barrels of oil equivalent/day at a cost of $70mn, the company said. This upgrade is necessary to account for the richer-than-expected fluids discovered at the field's KM-03 well. The effect on operating costs should be minimal. Secondly, Energean will install a second gas sales riser at the FPSO, boosting capacity from 6.5 to 8.0bn m3/year and enabling the company to make good on its current 7.4bn m3/yr of current gas sales commitments.
Both projects are expected on stream in the summer of 2023. In addition, Energean is preparing to sign a rig contract in the coming weeks for a five-well drilling campaign involving both development and exploration wells.
In other positive news, Energean said it was raising its full-year production guidance for 2021 after delivering 44,200 boe/d in January through April. "Production is ahead of the guidance range across all countries following robust operational performance since the start of the year," it said. The company now expects its full-year output to average 38,000-42,000 boe/d, versus a previous guidance of 36,000-41,000 boe/d.
A late April interview with Rigas, with his take on the company's expansion and how it has managed the pandemic, may be read here.