Energean could push back first gas from Karish to 2022

Oil and gas company Energean has informed that first gas from its Israeli fields could start flowing in the first quarter of 2022, instead of the current target of around year-end 2021.

Energean said on Thursday that first gas from its fields off Israel could slip by two to three months mostly due to delays to increase the workforce working on the Energean Power FPSO in Singapore, set to sail for Israel towards the end of the third quarter of 2021.

According to the company, this was primarily due to Covid-19 working conditions. “Energean and its contractors are in ongoing discussions to achieve the required workforce numbers to deliver first gas around year-end“.

“However, in the case that no further ramp up in the workforce is achieved, first gas could slip by between two and three months, into 1Q 2022“, the company stated.

Energean also said it believed that these schedule adjustments would be likely to be the subject of an extension of time claim under force majeure.

The eastern Mediterranean-focused company said in its year-end operational report on Thursday that it planned to spend $515 million to $590 million this year, with the bulk intended to get Karish gas field offshore Israel – when onstream.

Energean CEO Mathios Rigas told Reuters last week that if 2022 is the first full year of production from Karish, the company would aim to start paying dividends from the end of that year. It also plans to pay its maiden dividend in 2022.

In the update, the company claimed that the Karish project was approximately 87 per cent complete as of 31 December 2020.

During the year, a further 1.8 bcm of gas per year were signed taking the total to 7.4 bcm per year at a plateau – utilising 93 per cent capacity of the 8 bcm per year Energean Power FPSO. The company is exploring options to fill the remaining 0.6 bcm per year spare capacity.

Since 2020 ended, Energean has taken a final investment decision on the Karish North development, just 21 months after the announcement of its discovery. Karish North has 2P Reserves of 241 million boe and initial capital expenditure in the project is expected to be approximately $150 million.

In related company news, Energean took the final investment decision on the North El Amriya and North Idkunea concession subsea tieback project offshore Egypt.