Energean Lands More Sales Contracts (Correction)

(Corrects volume; adds details, quote)

Greek upstream company Energean announced October 30 a gas sales and purchase agreement (GSPAs) with private power producer Dorad. The deal covers 6.75bn m³ over 14 years.

It also announced GSPAs with Edeltech subsidiaries Ramat Negev and Ashdod, for a total up to 2.65bn m³/yr. As with the Dorad contract, the gas will come from Energean's Tarish and Tanin fields, which Energean bought from Delek Drilling.

Energean CEO Mathios Rigas said GSPAs with Dalia, Dorad and Edeltech totalled 33bn m³ in total. Energean has also secured revenues of about $3bn, underpinned by take-or-pay arrangements and firm floor prices once all conditions are satisfied. "We are delivering the contracts we have promised as planned and we are working steadily towards achieving all the milestones on the project required to reach final investment decision.”

The gas price for Dorad will need to be lower than from Tamar, as Dorad will take only half as much gas from Tamar once Karish and Tanin start up. Tamar gas costs about $4.70/mn Btu and accounts for all Dorad's gas needs.

The agreement with Dorad is only Energean's second firm contract. It has a few more in the pipeline after signing MoUs. Energean has said in the past that it needs contracts to sell at least 3bn m³/yr before it can take a positive FID.

In the last few weeks the share price of the Tamar partners has dropped by 20% and shares in Tamar Petroleum, the SVP that holds 10% of Tamar Partnership, dropped also by 20% since its IPO last July. 

Energean's partner in the project is Kerogen Capital a private equity fund. Kerogen invested $50mn in the project's early phases in exchange for a 50% stake in Energean Israel. Energean is managed by Mathios Rigas and Energean Israel is managed by Shaul Zemach.

Ya'acov Zalel