The Energean Oil & Gas subsidiary Energean Israel, also involving the investment group Kerogen Capital, has signed a memorandum of cooperation for natural gas supply from the Karish and Tanin fields, offshore Israel with three enterprises controlled by Israeli entrepreneur Idan Ofer.
Ofer’s ORL, a refinery, IC, a chemical industry, and power producer OPC stand to be supplied 39 billion cubic meters of gas supply over a 15-year period, according to the agreement.
All three Israeli companies announced their respective arrangements at the Tel Aviv bourse.
Energy Israel has so far reached supply deals concerning over four billion cubic meters of natural gas, annually, well over a three-billion sustainability level set by Energean for its Karish and Tanin fields.
The Israeli government still needs to approve the development plan for the Karish and Tanin fields before Energy Israel finalizes its investment decision, expected within the current year.
Energy Israel has also launched a financing intiative worth 1.3 to 1.5 billion dollars for the project.
It is estimated that production at the Karish and Tanin fields can commence in 2020, according to Energean’s project plan. Natural gas production from these fields will need to be exclusively supplied to the Israeli market, according to Israeli law.
The Karish and Tanin fields possess a total of 2.7 trillion cubic feet (74 billion cubic meters) of natural gas. The extraction process is being planned through a floating, production, storage and offloading (FPSO) unit. This would represent the first time that such a floating vessel will be used in the Mediterranean.