Energean in talks for new Israeli gas supply agreement

Greek firm Energean Oil & Gas is currently engaged in talks with Oil Refineries Ltd (ORL), Israel’s biggest refinery and petrochemicals corporate group, as well as two subsidiaries, for a new gas supply deal, the Israeli group comfirmed yesterday in an announcement forwarded to the Tel Aviv bourse.

The two ORL subidiaries, Israel Chemicals and OPC Rotem, also confirmed being involved in the negotiations with Energean in equivalent updates delivered to the Israeli bourse.

The three firms are looking to sign an agreement with Energean for the latter’s sale of 39 billion cubic meters of natural gas to the Israeli group and its subsidiaries.

The Israeli firms are aiming to sign a non-binding Memorandum of Understanding (MoU) for the purchase of natural gas from Energean, their announcements to the Tel Aviv bourse informed.

This deal would stand as Energean’s second-biggest achieved in the Israeli market following a major agreement reached on May 30 with Dalia Power Energies, the biggest independent electricity producer in Israel, and its sister company Or Power Energies, for the supply of up to 23 billion cubic meters of natural gas from the Karish and Tanin fields, offshore Israel, which the Greek firm acquired the rights to last December.

Energean’s latest negotiations with the ORL group also concerns supply from the Karish and Tanin fields.

The two fields contain at least 2.4 trillion cubic feet (TCF) of gas contingent resources, while the total investment cost for their development is estimated at between 1.3 and 1.5 billion dollars.

No information has yet to be released on the financial terms being discussed between Energean and the ORL group. However, it is believed that the prospective supply agreement could have a duration of up to 15 years.

The overall amount of natural gas Energean expects to sell to Israeli firms, seen reaching 62 billion cubic meters, is equivalent to the amount of natural gas consumed in Greece over a 16-year period.