Energean plc’s Karish North asset offshore Israel has produced its first gas, five years after its discovery.
The Karish North production well is currently using a second gas export riser, which was installed in December 2023, Energean said in a recent news release.
The Energean Power floating production storage and offloading unit (FPSO) now has four production wells in operation, increasing well stock redundancy and flexibility to meet the demand requirements of Energean’s gas buyers, the company said.
Further, Energean Israel has signed a new gas sale and purchase agreement (GSPA) with Eshkol Energies Generation LTD, which is majority owned by Dalia Energy Companies Ltd, for the supply of an initial 0.6 billion cubic meters per year (bcm/y), rising to 1 bcm/y from 2032 onwards.
Energean said it supplies gas to all four Israel Electric Corporation (IEC) power stations that have been privatized: Ramat Hovav, Alon Tavor, East Hagit and now Eshkol. The new contract is in line with its strategy to “bring competition and security of supply to the Israeli market, and to secure long-term cash flows for its shareholders via its long-term gas contracts”, it noted.
The GSPA is for a term of approximately 15 years, for a total contract quantity of up to approximately 12 billion cubic meters and represents approximately $2 billion in revenues over the life of the contract, according to the release.
The contract contains provisions regarding floor and ceiling pricing, take or pay and price indexation, and is not Brent-price linked. Energean noted that the GSPA is in line with the other large, long-term contracts within its portfolio.
“Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production”, Energian Chief Executive Mathios Rigas said. “This provides us operational flexibility and enables us to utilize the FPSO’s maximum gas capacity”.
“The new contract with Eshkol is a further testament to the trust in Energean from the Israeli electricity producers, adds circa $2 billion of revenues over the life of the contract to our business, and is in line with our strategy to secure long-term reliable cash flows from long-term gas contracts”, Rigas added.
According to the company’s website, Energean’s flagship production and development assets are the portfolio of Karish, Karish North, Katlan and Tanin, offshore Israel. Karish started production in 2022, with an initial capacity of 6.5 bcm/y. Following optimization, the Energean Power FPSO will have the capacity to produce 8bcm/y and 32,000 barrels of oil per day.
Energean announced a new gas discovery in Karish North in April 2019. According to an official report, Karish North contains gross 1,137 billion cubic feet of gas 2P reserves plus 34.1 million barrels of liquids 2P reserves. This represents a total of 240.7 million barrels of oil equivalent, of which 84 percent is gas.
The Karish North field development plan was approved by the Israeli authorities in August 2020. The Karish North final investment decision was made in January 2021.
To contact the author, email rocky.teodoro@rigzone.com
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