Energean working to stay on track with FPSO hull in China amid Coronavirus outbreak

  • Infrastructure

Energean Oil and Gas still expects to remain on track to deliver first gas from its Karish and Tanin project offshore Israel in the first half of 2021 despite potential further delays in China amid Coronavirus outbreak. Energean is working with its contractors to mitigate any delay.

Energean Power FPSO hull

Once completed, the FPSO will be deployed at Energean’s Karish and Tanin fields located offshore Israel.

As reported in late January, Energean experienced a delay in delivery of a hull for its Energean Power FPSO, which is being built by a Cosco yard in China. Namely, the hull sailaway date from the Cosco yard had been deferred to March 31, 2020, a delay of 3.5 months. The hull was previously expected to sail away in late 2019.

In a statement on Thursday, Energean provided an update on the potential impacts of the Novel Coronavirus on the construction of the Energean Power FPSO Hull, which is being built in Liuheng Island, and the overall project timetable.

Work on the hull is ongoing and, at this stage, Energean reiterated that the Karish Project remains on track to deliver first gas in 1H 2021.

The Novel Coronavirus was recently identified in China and has spread to most provinces within China and several other countries, leading the World Health Organisation to declare the virus a “Public Health Emergency of International Concern”. In order to prevent the spread of the virus, several countries, including China, have issued emergency travel and transportation restrictions, which have had an immediate impact on the availability of labour and resources in affected areas, including Liuheng Island.

Energean has received a notice under its EPCIC contract with TechnipFMC in relation to the travel restriction constituting a Force Majeure event, potentially entitling TechnipFMC to claim an extension of time under the EPCIC contract. Energean has, in turn, issued corresponding notices to its buyers of Karish gas and other relevant counterparties.

The rapidly evolving nature of these circumstances is such that it is impossible, at this stage, to determine the overall impact, if any, on Energean’s project timeline.

However, work is still progressing well in the Chinese yard with approximately 550 staff on site; and Energean is working actively with TechnipFMC to ensure that all appropriate measure are being taken to avoid or mitigate any delay. Based on the information available at this stage, Energean still expects that the Karish Project remains on track to deliver first gas in 1H 2021.

Energean said it would provide further updates as the situation clarifies.


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