Energean firms up agreement with Israel Natural Gas Lines
- Business & Finance
Greek oil and gas company Energean Oil and Gas has signed a detailed agreement with Israel Natural Gas Lines (INGL) for the transfer of title of the near shore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin FPSO into the Israeli national gas transmission grid.
A Memorandum of Understanding with INGL was signed in December 2018.
As consideration, INGL will pay Energean 369 million Israeli New Shekels, approximately $102 million, which will be paid in accordance with milestones detailed in the agreement.
The agreement covers the onshore section of the Karish and Tanin infrastructure and the near shore section of pipeline extending to approximately 10km offshore. It is intended that the hand over to INGL will become effective shortly after the delivery of first gas from the Karish field in 1Q 2021.
Following hand over, INGL will be responsible for the operation and maintenance of this part of the infrastructure. Energean will not incur any charges or tariffs for use of this infrastructure.
Mathios Rigas, CEO of Energean Oil & Gas said: “The agreement signed with INGL is an important milestone for the Karish and Tanin development, which will start flowing natural gas to the Israeli market in 1Q 2021. This demonstrates the commitment of the Israeli government to the project, and to long term development of gas resources offshore Israel. The infrastructure being built by Energean will enable connection of future gas discoveries to the system, further contributing to Israel’s energy security and diversity of supply.”
Energean made a Final Investment Decision (FID) in March 2018 for its flagship Karish-Tanin gas development project, where it intends to use the only FPSO in the Eastern Mediterranean to produce first gas in 2021.
Energean has already signed firm contracts for 4.2 bcma of gas sales into the Israeli domestic market. Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region.
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