Energean’s FPSO for Israeli project sails away from Singapore

Hydrocarbon exploration and production company Energean has revealed that its FPSO for the Karish project located offshore Israel has sailed away from Singapore.

As informed by Energean on Tuesday, the Energean Power FPSO sailed away from Singapore and the company remains on track to deliver the first gas from the Karish project in 3Q 2022. The FPSO was previously scheduled to sail away from the yard in 2021 but, due to the Covid-19 pandemic, the project has experienced delays.

In early 2022, Energean expected the vessel to be ready for sail-away from Singapore by the end of the first quarter. From sail-away to first gas, Energean expects 4-5 months, including tow, hook-up and commissioning. The vessel is expected to arrive in Israel in early June.

In March, Energean connected the Karish gas field to the Israel National Gas Line (INGL), saying it was an important milestone in facilitating the operational readiness of the Karish field development.

The connection between Energean’s land-based system at Dor Beach in Northern Israel and the INGL delivery system was completed by welding together two 30-inch diameter pipe sections. Gas from the Karish field will flow to the Energean Power FPSO located 90 km offshore where production output will be processed and separated.

Energean also said on Tuesday it has signed a new Gas Sales and Purchase Agreement (GSPA) for up to 0.8 bcm/yr.

Under the GSPA, Energean will supply gas to the East Hagit Power Plant Limited Partnership, a partnership between the Edeltech Group and Shikun & Binui Energy. EH Partnership was the winning bidder in the IEC East Hagit tender process, the third IEC power plant in the current series of four to be privatised. Energean is also a supplier of gas to Ramat Hovav and Alon Tavor, the first two power stations privatised in the series.

The GSPA is for a term of approximately 15 years, for a total contract quantity of up to 12 bcm. The contract contains provisions regarding floor pricing, offtake exclusivity and a price indexation mechanism (not Brent price linked). The GSPA has been signed at levels that are in line with the other large, long-term contracts within Energean’s portfolio.

The agreement has the potential to generate revenues of up to $2 billion over the offtake period and is subject only to buyers’ completion of the privatisation process, including lenders’ consent.

Combined with the spot sales agreement signed in March 2022 with IEC, the agreements have enhanced Energean’s gas sales portfolio towards filling the 8 bcm/yr of capacity on the Energean Power FPSO.