Floating gas production rig/ Photo courtesy Energean
Energean, the British energy company that operates Israeli natural gas fields in the Mediterranean Sea, signed a new agreement for the sale of gas in an initial quantity of 0.6 BCM annually to Israel’s Eshkol power station. So, Israel’s own offshore natural gas reserves are being sold back to the country’s power plants.
The deal is for a term of approximately 15 years, for a total contract quantity of up to approximately 12 bcm and represents circa $2 billion in revenues over the life of the contract. The contract contains provisions regarding floor and ceiling pricing, take or pay and price indexation (not Brent-price linked).
Karish North’s first gas was safely achieved on 22 February 2024. The Karish North production well is currently utilizing the second gas export riser, the installation of which was completed in December 2023. Energean Power FPSO now has four production wells in operation, increasing well stock redundancy and flexibility to meet the demand requirements of Energean’s gas buyers.
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Energean supplies gas to all four IEC power stations that have been privatized: Ramat Hovav, Alon Tavor, East Hagit and now Eshkol. This new contract, said the company, is in line with Energean’s 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.
Energean is a London Premium Listed FTSE 250 and Tel Aviv TA-25 Listed Exploration & Production company. The leading natural gas focused E&P in the Greater Mediterranean Region, Energean has a balanced portfolio of production, development and exploration assets across the greater Mediterranean and UK North Sea.’
Energean’s flagship production & development assets are the multi-tcf portfolio of Karish, Karish North, Katlan and Tanin, offshore Israel. Energean brings both competition and enhanced energy security to Israel and the broader regional energy market. Karish commenced production in 2022, with initial capacity of 6.5 bcm/yr. Following optimisation, the Energean Power FPSO will have the capacity to produce 8bcm / yr & 32 kbopd. In addition, the portfolio includes significant positive development and exploration upside.
Energean CEO Mathios Rigas said, “Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production. This provides us operational flexibility and enables us to utilize the FPSOs 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.”
