London-based oil and gas player Energean has brought a new project on stream to boost output from a field off the coast of Israel, enabling the gas capacity on a floating production, storage, and offloading (FPSO) vessel, which is working on the field, to be used in full.
Energean started production from the Karish field offshore Israel in October 2022, after the FPSO Energean Power crossed the Suez Canal, as the first vessel of its type to do so , and reached the waters offshore Israel in early June 2022. The FPSO and the sales gas pipeline have an ultimate capacity of 8 bcm/yr.
However, the initial capacity was up to 6.5 bcm/yr, and commercial gas sales were expected to reach it approximately four to six months following the first gas. In January 2023, Energean claimed that its key development projects – Karish North , NEA/NI , Cassiopea – would enable it to be on track to deliver its 200 kboed mid-term production target.
To this end, the installation of the second oil train and gas export riser along with the first gas from Karish North was expected by year-end 2023. According to Energean, Karish North and the second gas export riser are now online, debottlenecking FPSO capacity to 8 bcm/yr.
Mathios Rigas , Chief Executive of Energean, commented: “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 utilise the FPSO’s maximum gas capacity.”
The first gas from Karish North was achieved on February 22, 2024. The production well is currently utilizing the second gas export riser, the installation of which was completed in December 2023. As a result, the FPSO Energean Power now has four production wells in operation, increasing well stock redundancy and flexibility to meet the demand requirements of the firm’s gas buyers.
In line with this, Energean Israel has signed a new 15-year gas sale and purchase agreement (GSPA) with Eshkol Energies Generation, majority-owned by Dalia Energy Companies, for the supply of an initial 0.6 bcm/yr, rising to 1 bcm/yr from 2032 onwards. This GSPA covers a total contract quantity of up to 12 bcm and represents about $2 billion in revenues over the contract duration period.
The company supplies gas to all four IEC power stations that have been privatized: Ramat Hovav, Alon Tavor, East Hagit, and now Eshkol. The new contract is said to be aligned with Energean’s strategy to bring competition and security of supply to the Israeli market while securing long-term cash flows for its shareholders via its long-term gas contracts.
“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,” added Rigas.
At the end of 2023, Energean revealed a new country entry in the Mediterranean region with plans to take over the operatorship helm at two Moroccan offshore licenses from Chariot, thanks to the duo’s partnership agreements .