Energean confirms Israel gas deal

Following reports on Monday that Greece’s Energean has found buyers for gas from its fields offshore Israel, this has now been officially confirmed.

In an emailed statement, Energean Oil & Gas has confirmed its subsidiary Energean Israel has signed with Dalia Power Energies and its sister company – Or Power Energies, two agreements for the supply of natural gas from the Karish and Tanin fields, offshore Israel.

Dalia and Or will purchase part of their gas requirements from Karish-Tanin to operate the Dalia power plant, the largest private power station in Tzafit, south-central Israel, as well as future power plants to be built by Or.

Energean Israel will supply an overall amount of up to 23 billion cubic meters of natural gas from Karish-Tanin reservoirs over the lifetime of the contracts.

The period of the supply agreements will start from the date natural gas flows in commercial volumes from Karish-Tanin to the buyers, and conclude at the point when the Purchasers’ generation licenses need to be extended.

The buyers have agreed to a Take or Pay arrangement for a minimum annual amount of natural gas from Energean Israel, at a price linked to Israeli electricity markets and underpinned by a floor price.

Energean Oil & Gas Chairman & CEO, Mathios Rigas said: “This is a significant day for the Israeli gas market. These are the first contracts for gas supplies from the Karish and Tanin fields signed with the Dalia group, the largest private power producer in Israel. The agreement is a substantial step towards bringing competition and cheaper energy to the market for the benefit of Israeli consumers and the country’s economy. Energean is in talks regarding further contracts with other potential customers in the market and is aiming to submit a Field Development Plan for the Karish and Tanin project in the next few weeks.”

Dalia Power Energies Company CEO, Eitan Meir added: “Dalia and Or Energy are working to expand the volume of production offered by them, while continuing to reduce the price of electricity. We are pleased to sign the agreement that expands the gas sources and the ability of the companies to offer their customers electricity at a competitive price. Competition in all segments of the electricity sector will serve the public and the Israeli economy.”