Greek player Energean Oil and Gas and MRC Alon Tavor (MRC) have signed a gas sales and purchase agreement (GSPA) for the sale of approximately 0.5 Bcm/yr, or up to 8 Bcm over the term of the contract from the Karish field offshore Israel.
Energean is the operator of the Karish and Tanin deepwater field developments located in the Eastern Mediterranean, approximately 90km offshore Israel.
Energean said on Thursday that the supply would start at Karish first gas and the contract term was for a period of 15 years from the date of signature.
The GSPA is linked to the Israeli Electricity Production Index and has floor pricing and take-or-pay provisions.
Energean estimates that the GSPA will add revenues in excess of $1 billion over the term of the contract.
Energean also recently signed a contract amendment with OPC Rotem that accelerated the rate of gas consumption and increased annual gas supply by 0.2 Bcm/yr. This was accompanied by a shortening of the contract term such that there was no change in the total contract quantity of gas.
Energean now has firm GSPAs for the supply of 5.0 Bcm/yr of gas into the Israeli domestic market, excluding the contingent GSPAs that have been signed with I.P.M Beer Tuvia (0.4 Bcm/yr) and Or Power Energies (Or) (0.7 Bcm/yr).
In related news, Energean earlier this week submitted to the authorities of the Republic of Cyprus applications to import and supply natural gas to Cyprus, starting in 2021.
According to the plan, natural gas will be transported through pipelines from the Karish offshore block to the Energean Power FPSO, and from there through a pipeline to Vassiliko, Cyprus, where it will landfall.
Karish / Tanin
Energean sanctioned the 2.4 Tcf Karish and Tanin development in March 2018. The company then revealed it would use $405 million of the $460 million raised from its IPO to fund its 70% share in the project, while the remaining 30% would be funded by Kerogen Capital.
Energean contracted TechnipFMC under a turnkey, lump sum EPCIC contract worth $1.6 billion to provide the full suite of FPSO and SURF services during the construction phase and TechnipFMC subcontracted COSCO to provide the FPSO hull.
Energean has chosen a new-build FPSO based on an existing design and will adopt a spread moored system, which it believes reduces technical risk on the field.
The FPSO hull was undocked and floated out from the COSCO Shipyards’ dock in early October 2019. The sail away of the FPSO hull from China to Singapore is expected in late 2019. The hull will then travel to the Sembcorp Admiralty Yard in Singapore for the installation of the Siemens-built topsides.
Offshore Energy Today Staff
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