Energean Secures Gas Contracts for Israel Offshore Fields

Greek oil producer Energean has exceeded its target for gas sales contracts needed, before it proceeds with plans to tap two gas fields off Israel’s coast, according to market sources.

Energean bought the Karish and Tanin fields, located in deep waters around 100 kilometres off Israel’s coast, last August for $148 million from U.S.-Israeli partners Delek Group and Noble Energy.

It plans to lease its own floating production, storage and offloading vessel and build a separate pipeline to Israel at a cost of up to $1.5 billion.

Energean had targeted gas sales contracts of 3 billion cubic metres annually before making a final investment decision and has so far secured 4.6 bcm a year, market sources said.

This week, Israel Chemicals, Bazan Group Oil Refineries and OPC Energy signed agreements to buy 39 bcm of gas from the Karish and Tanin fields over 15 years, or 2.6 bcm annually.

Energean has secured another 0.8 bcm per year from agreements with power producer Dorad and Rapac Communications and Infrastructure, and 1.2 bcm annually from Dalia Power, which operates Israel’s largest private power station, sources said.

Energean is Greece‘s only oil producer with an average production of 3,500 barrels per day last year. The Karish and Tanin fields are the company’s biggest assets with combined gas reserves of an estimated 2.4 trillion cubic feet.