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    Energean starts gas production at Israel's Karish site

Summary

Energean has begun production at the Karish offshore gas field and first gas had been safely delivered, the company said on Wednesday.

by: Reuters

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Energean starts gas production at Israel's Karish site

Israel on Tuesday granted Energean permission to start production at the Karish natural gas field.

The London-listed energy group had began pumping gas to its floating production facility on Oct. 9 as part of reverse flow testing procedures.

"We have delivered a landmark project that brings competition to the Israeli gas market, enhances security of energy supply in the East Med region and brings affordable and clean energy that will displace coal-fired power generation, making a material impact to the environment," said Mathios Rigas, Chief Executive Officer of Energean in regulatory filing.

Energean said gas is being produced from the Karish Main-02 well and the flow of gas is being steadily increased. The Karish Main-01 and Karish Main-03 wells are expected to be opened up in approximately two and four weeks, respectively, it added.

Karish has a capacity of 8 billion cubic metres (bcm). The initial capacity is up to 6.5 bcm/year, and commercial gas sales are expected to reach this level within six months.

Energean said its growth projects including the Karish North development are on track for completion in late 2023. Then, it said, it would be able to produce the full 8 bcm year capacity.

Rigas said that with the Karish field coming online, Energean was committed to reach its medium-term targets to produce 200 thousand barrels of equivalent oil a day and $1.75 billion of annualised EBITDAX (earnings before interest, tax, depreciation, amortization, and exploration expenses).

"We are now focused on ramping up production and delivering the full 8 bcm capacity," he said.

Israel and Lebanon on Thursday are expected to sign a U.S.-brokered maritime border deal reached this month, opening the way for offshore energy exploration.

In the weeks running up to the deal, the development of the Karish field, about 80 km (50 miles) west of the Israeli city of Haifa, had raised tensions between the two countries drawing threats of war from the Iran-backed Hezbollah movement.

Israel currently gets its natural gas from the nearby Tamar and Leviathan fields. (Reporting by Steven Scheer Editing by David Goodman and David Evans)