Energean Takes FID on Israel's Karish/Tanin
Greece's Energean said March 22 it has taken the final investment decision (FID) on its $1.6bn Israeli project to develop the Karish and Tanin gas fields. This follows Energean's successful initial public offering (IPO) on the London Stock Exchange which valued the company at $968mn.
It said that $405mn of the $460mn raised by the IPO will be used to fund Energean’s 70% share in the offshore Israel gas project, while the remaining 30% will be funded by venture capital fund Kerogen Capital, Energean’s partner in the project.
The project is also being financed by a loan of $1.275bn underwritten by four banks: Morgan Stanley, Natixis, Bank Hapoalim and Societe Generale.
Energean has secured long-term gas agreements with some of the largest private power producers and industrial companies in Israel. It has contracted for the purchase of a total of 61bn m3 of gas over a period of 16 years, at an annual rate of roughly 4.2bn m3.
Karish/Tanin will be developed through a newbuild, project-owned floating production storage and offloader (FPSO) vessel, with gas treatment capacity of 800mn ft3/d (8bn m3/yr) and liquids storage capacity of 800,000 barrels, which Energean says will give the project scope to expand output for potential additional projects. A 90-km gas pipeline will link the FPSO to the Israeli coast and necessary onshore facilities to allow connection to the domestic sales gas grid operated by INGL.
The entire project infrastructure has been contracted to be engineered, built and commissioned under a lump sum contract with Technip FMC, with a contracted delivery date of 1Q 2021.
During 2019, three wells will be drilled into the Karish discovery, using the Stena Forth drillship which is under contract from Energean, which has also secured options to drill five further wells in Energean's other licences in Israel.
Energean CEO Mathios Rigas said: “We committed to the investors in the IPO that we would take FID immediately after the equity raise and I am pleased to be honouring this, the day after the shares started trading on the London Stock Exchange." He said that contracts had been awarded and financing raised in just 14 months since January 2017, when the Israeli government approved the transfer of the licences to Energean.
“The Karish and Tanin development will bring competition and security of supply to the Israeli gas market, and will support Energean’s strategy to become a major player in the gas developments of the east Mediterranean," added Rigas: "Owning and operating the only FPSO in the east Mediterranean with an 8bn m3/yr capacity gives Energean significant scope for growth through being able to support potential additional gas discoveries from Karish and Tanin and the five adjacent licences that we own in Israel.”