Greek oil company Energean Oil & Gas has signed an agreement with four international banks for financing the development of Karish, part of the company’s flagship Karish and Tanin project, off Israel. TechnipFMC has been awarded a $1.36 billion contract for the construction of an FPSO.
The financing agreement was signed between Energean’s subsidiary, Energean Israel, and Morgan Stanley, Natixis, Bank Hapoalim and Societe Generale as Mandated Lead Arrangers (MLAs).
The facility agreement will be the primary source of funding for the development of the Karish offshore gas field over the next three years, with first gas production expected in early 2021, Energean said on Monday.
It also provides further momentum for the company to make a Final Investment Decision (FID) on Karish and Tanin, Energean added.
Energean Oil & Gas CEO, Mathios Rigas, commented: “We are rapidly advancing the Karish and Tanin development by continually delivering on substantial project milestones.
“The participation of four international banks in the facility agreement is a strong vote of confidence in Energean’s flagship project. Long-term cash flow from Karish and Tanin has been secured through our previously signed gas supply agreements for approximately 4.2 BCM per year with 12 established counterparties.
“Furthermore, Energean has signed a $1.36 billion contract with TechnipFMC for the construction of an FPSO with a production capacity of 8 BCM per year, potentially enabling us to take advantage of future production potential from our existing licenses or adjacent fields to deliver gas to a rapidly growing regional market.”
It is worth reminding that TechnipFMC was also the contractor for Concept and Front End Engineering Design (FEED) for the Karish and Tanin development.
Rigas added: “The company is in the process of raising the equity required to develop Karish and Tanin through a premium listing on the London Stock Exchange’s Main Market. At the same time, we are pressing ahead with the expansion program of our existing production and development base in the Eastern Mediterranean, to deliver our next phase of growth.”
Rigas was referring to the company’s plan to proceed with an initial public offering. Namely, the company in February 2018 revealed its intention to apply for admission of its shares to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s main market for listed securities. Energean expects that admission will occur in March.
Karish and Tanin were discovered in 2013 and 2011 respectively and contain 2C gas resources of 2.4TCF. Energean is intending to fast-track the development of the Karish field to support the Israeli Government in bringing cheaper gas to the market by 2020. The development of the Tanin Field will follow thereafter.
Offshore Energy Today Staff