Continuation of energy strategy minister’s guide at Cairo forum

Recently appointed energy minister Costis Hatzidakis will formally commence work on promoting Greece’s international energy relations at his first meetings abroad, today and tomorrow, at the East Med Gas Forum in Cairo.

The minister, in recent speeches, has already made clear his interest in supporting a national strategy shaped to bolster the country’s energy security, elevate its geopolitical role and fuel economic growth.

Strategic partnerships with Cyprus, the USA, Israel and Egypt will play a pivotal role in this effort.

Greece, Cyprus, Egypt, Israel, Italy, Jordan and the Palestinian Authority will all be represented at the Cairo forum.

Hatzidakis, Greece’s energy minister, is also expected to discuss energy partnerships and regional security with US energy secretary Rick Perry, who is in the Egyptian capital as part of a tour of the east Mediterranean.

Development of the submarine East Med gas pipeline, a project promising security and stability for the wider region, is a leading priority  for Greece.

On a wider level, the minister can be expected to carry on supporting a national strategy pursued over the past decade to establish Greece as a pivotal energy player in the region and key problem solver of regional energy partnership issues.

As for other major energy infrastructure projects, the new Greek government will continue to provide national support for the swift completion of the Trans Adriatic Pipeline (TAP), planned to transport Caspian natural gas to Europe, and the Greek-Bulgarian IGB gas grid interconnector. Other investment plans such as the Alexandroupoli FSRU and the Kavala underground gas storage facility will also keep receiving the support of Greece’s administration.

Energean signs deal with INGL for partial infrastructure transfer

Energean Oil and Gas, a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, has signed a Detailed Agreement with Israel Natural Gas Lines (INGL) for the handover 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. An MOU with INGL was signed in December 2018, Energean has announced in a statement.

As consideration, INGL will pay Energean 369 million Israeli New Shekels, approximately US$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 handover to INGL will become effective shortly after the delivery of first gas from the Karish field in 1Q 2021.

Following handover, 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, commented:

“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. We thank INGL management and professional team for the collaboration – we look forward to developing more projects together in the future”.

Greek PCI support for Eurosia conditional, minister suggests

Greece’s decision to proceed with the development of the Crete-Athens electricity grid interconnection as a national project through power grid operator IPTO’s special purpose vehicle Ariadne rather than as part of a wider Euroasia Interconnector project planned to link the Greek, Cypriot and Israeli grids has cast doubts over the future PCI status of Euroasia’s Crete-Cyprus and Cyprus-Israel segments.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, will need the support of all parties involved if the Crete-Cyprus and Cyprus-Israel segments are to secure a place in the EU’s new PCI list, enabling favorable funding, when the updated list is published later this year, in autumn.

Though Greece’s energy ministry has yet to make its intentions clear, it faces pressure, especially from Cyprus, to support the continued PCI-status of the Crete-Cyprus and Cyprus-Israel segments as their development would end Cyprus’ electricity grid isolation.

Greece’s stance will most likely depend on Euroasia Interconnector’s moves and whether it will seek to obstruct the development of the Crete-Athens interconnection through legal procedures and other action.

Energy minister Giorgos Stathakis has suggested Greece’s support for the wider project’s PCI status would be conditional.

IPTO recently decided to remove the Crete-Athens segment from the wider Greece-Cyprus-Israel interconnection project as the operator was embroiled in a dispute with the Cypriot consortium over the local segment’s control.

Three-way summit to support ambitious East Med project

The leaders of Greece, Cyprus and Israel are expected to unite for a joint statement in support of the East Med natural gas pipeline’s development as well as the reinforcement of regional energy security at a summit in Jerusalem this Wednesday, where they will be joined by US Secretary of State Mike Pompeo.

The anticipated declaration by Greek Prime Minister Alexis Tsipras and his respective Cypriot and Israeli counterparts, Nicos Anastasiades and Benjamin Netanhyahu, will represent yet another step towards the development of East Med, promising a transportation route for regional natural gas to  EU markets.

Pompeo’s presence at the forthcoming three-way summit, combined with ExxonMobil’s recently declared intention to take part in a new round of Israeli tenders offering licenses, make clear Washington’s determination for a leading role in the Mediterranean.

Discoveries of major natural gas fields in the region and plans for EU-bound transportation routes have increased US interest.

However, many obstacles still lie ahead for the East Med pipeline. These include Italy’s step back as a result of objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition. Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach.

Greece, Cyprus and Israel now appear to be examining alternative East Med routes towards Europe, the most favorable option being North Macedonia.

Though Egypt expressed support for East Med last week, Cairo plans to utilize the country’s LNG terminals with the aim of exporting gas in liquefied form. This infrastructure would have an advantage over East Med.

East Med’s commercial feasibility is another concern. Quantities and customers still need to be assured.

 

 

East Med pipeline prospects bolstered by Egyptian support

Egypt’s constructive participation in talks for the development of the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy, has created favorable prospects for the realization of a project promising to play a pivotal role on the southeast Mediterranean energy map.

US support for the project and an effort by participating countries to ensure ExxonMobil’s involvement are also bolstering the East Med’s development prospects.

Last month, Egypt’s petroleum minister Tarek El-Molla had told Cyprus News Agency his country is not interested in participating in the East Med project with its Zohr natural gas deposit.

However, the Egyptian minister changed his tune yesterday at Ceraweek 2019, an international energy in Houston, Texas, noting Egypt will support the East Med project.

Quite clearly, Egypt is looking to establish yet another alternative supply route for its Zohr field, an enormous natural gas discovery, to major consumer markets of the west.

Prior to expressing support for East Med, El-Molla took part in a meeting with his Greek, Israeli and Cypriot counterparts – Giorgos Stathakis, Yuval Steinitz and Giorgos Lakkotrypis, respectively – and US energy under secretary Mark Menezes, at the Houston event.

All four officials confirmed their support for the East Med gas pipeline, according to a statement released by Greece’s energy ministry.

Stathakis, Greece’s energy minister, also held a separate meeting yesterday with ExxonMobil officials for talks on developments concerning the oil major’s hydrocarbon exploration interests at offshore blocks west and southwest of Crete – through a consortium established with Total and ELPE (Hellenic Petroleum) – and the East Med project, energypress sources informed.

 

Greek-Cypriot-Israeli deal for East Med pipeline likely this month

A three-way agreement between Greece, Cyprus and Israel for the development of the East Med natural gas pipeline, planned to carry Cypriot and Israeli natural gas to the EU via Greece and Italy, appears increasingly likely to be signed by the leaders of the three countries at a Tel Aviv summit scheduled for March 20.

A draft of the planned agreement is currently being fine-tuned in Brussels.

Despite the emergence of a growing number of reports contending an agreement is near, objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition, could turn into a problem for the East Med pipeline plan.

Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach. Incidentally, the TAP project to carry gas from Azerbaijan to the EU is also planned to reach this spot. The Five Star Movement has also raised environmental concerns over this project.

Lebanon is another country in the region opposing East Med as a result of its ongoing EEZ dispute with Israel. Turkey, not on good terms with Israel and unsettled by the evolving Israeli-Cypriot cooperation, also opposes the project. Cyprus is continuing its hydrocarbon exploration activities, adding to Turkey’s concerns.

Meanwhile, Greek energy minister Giorgos Stathakis arrived in Houston, Texas yesterday to take part in Ceraweek 2019, an international energy conference running until Friday.

Stathakis is scheduled to take part in a panel discussion tomorrow on east Mediterranean developments following recent natural gas discoveries by Cyprus and Israel. His Cypriot, Israeli and Egyptian counterparts will also join this panel.

Sideline talks, by these officials, on regional energy matters are expected.

Energean signs extra Karish and Tanin sale, purchase deals

Energean Oil and Gas has signed a Gas Sales and Purchase Agreement (GSPA) with I.P.M. Beer Tuvia Ltd. (IPM) to supply an estimated 5.5 BCM of gas from its Karish and Tanin FPSO over a period of 19 years.

The contract is subject to necessary approvals and is contingent on results of the 2019 drilling program, which includes the drilling of four wells in Israel and commences with the spud of Karish North in March 2019, targeting 36.8 BCM (1.3 Tcf) of gas with a volume weighted geological chance of success of 69%.

The agreement adds between 0.265 and 0.38 BCM/yr of gas sales, commencing in approximately 2024. Energean estimates that the agreement will contribute revenues of approximately $0.9 billion over the life of the contract. Energean may supply IPM with limited volumes between 2021 and 2024.

IPM holds an option to increase volumes up to 0.55 BCM/yr.

Energean has now signed GSPAs for 4.6 BCM/yr from its Karish and Tanin FPSO, which is being built with a total capacity of 8 BCM/yr. Energean targets filling the remaining 3.4 BCM/yr of FPSO spare capacity in the medium term, which it believes will deliver attractive incremental economics.

IPM is an independent power producer that will supply the national power grid and large private consumers with power. IPM is building a new power plant that is due to start operating in 2H 2020, and gas purchased from Energean will provide part of the total quantity of gas required for its operations. The remaining gas supply will be purchased in accordance with IPM’s existing Gas Agreements.

The Karish and Tanin development remains on track for first gas in 1Q 2021.

“This additional Gas Sales Agreement aligns with Energean’s strategy to secure offtake for the remaining spare capacity in our 8 BCM/yr FPSO and to commercialize the resource being targeted by our upcoming drilling program, providing competition and energy security to the Israeli domestic market,” noted Mathios Rigas, CEO of Energean Oil & Gas. “The signing of this contract ahead of results from our 2019 drilling program demonstrates not only the attractiveness of the Karish and Tanin fields but the strong incremental demand that we have identified for our gas and we will continue to target additional sales. Our future sales contracts will target both the growing domestic and regional export markets, delivering attractive incremental economics for all of our stakeholders.”

 

 

Energean set for 20-year output high of 1.5m barrels in 2018, new drilling

Officials at Energean Oil & Gas, nowadays a publically traded company following last March’s listing on the London Stock Exchange’s main market, avoided disclosing too much information at a company presentation yesterday but confirmed the achievement of a 20-year production high of 1.5 million barrels for 2018, at a production rate of nearly 4,100 bpd.

Half this amount – 2,000 bpd – was provided by the company’s Prinos North oil field, which began producing last February following horizontal drilling.

Company officials also noted a new drilling effort will be staged at the Epsilon oil field, located in the Gulf of Kavala, northern Greece. Output here will signal Greece’s first point of utilization and oil production since the Prinos and Prinos North fields.

Energean’s detailed new production guidelines are expected to be announced by the board in January.

Beyond Greece, Energean, a leading independent E&P company focused on the Eastern Mediterranean region, plans to commence 3D seismic surveys at a section of offshore licenses held in Israel as well as at two offshore licenses in Montenegro.

In March, Energean plans to drill at its Karish North license in Israel, aiming to discover 34 billion cubic meters of natural gas. This drill has been given an almost 70 percent chance of succeeding.

Last November, Energean began constructing a Floating Production, Storage and Offloading (FPSO) unit to be installed in the east Mediterranean region. It will offer an annual production capacity of 8 billion cubic meters.

Energean’s listing on the London Stock Exchange was the biggest IPO by a petroleum firm in the past four years and the sole entry in 2018. Energean’s share has since been one of the best FTSE 250 performers, rising 35 percent.

Just under two months ago, Energean was also listed on the Tel Aviv Stock Exchange (TASE) secondary list.

 

 

Three-way East Med gas pipeline deal reached, US keen

The leaders of Greece, Cyprus and Israel have reached an agreement to develop the East Med natural gas pipeline, planned to carry enormous southeast Mediterranean natural gas deposits to the EU via Greece. They met today at the Israeli city Beersheba for a fifth summit on the issue.

The project’s development plan still needs to be endorsed by the European Commission before a final agreement is signed by the three countries. This is expected in the the first quarter of 2019.

The European Commission has already received the project’s details and is expected to offer its approval early in 2019.

Greece’s Prime Minister Alexis Tsipras, joined by energy minister Giorgos Stathakis for the Israel trip, and the respective leaders of Cyprus and Israel, Nicos Anastasiades and Benjamin Netanyahu, are scheduled to sign related memorandums later in the day.

In the lead-up to today’s session, diplomats had described the meeting as one of the last pre-construction steps for the East Med project.

A disputed electricity grid interconnection project involving the three countries has not been included on today’s agenda. Greek authorities awarded Ariadne Interconnector, an SPV established by Greek power grid operator IPTO, control of the Greek-Cypriot-Israeli project’s Crete-Athens segment, despite European Commission objections.

Brussels favors Euroasia Interconnector, a consortium of Cypriot interests heading the wider Greek-Cypriot-Israeli project, for control of its Crete-Athens segment.

The East Med natural gas pipeline, whose cost has been estimated at 7 billion dollars, promises to be the world’s biggest submarine pipeline – in terms of length and depth.

The US has showed increased support for the project in recent times. US involvement in the project has not been excluded.

An annual gas transmission objective of 20 bcm has been set for East Med. EU natural gas needs have been forecast to reach 100 bcm in 2030.

RAE to reiterate Crete project link commitments to all parties involved

RAE, the Regulatory Authority for Energy, intends to reiterate and seek reconfirmation of commitments taken on by all parties involved in the delayed Crete-Athens grid interconnection’s development via a letter to be forwarded to all, sources have informed. The move is seen as a counterattack following criticism by Brussels officials.

Besides Euroasia Interconnector – a consortium of Cypriot interests heading a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids – Greece’s power grid operator IPTO and its Cypriot counterpart, RAE will also forward copies of the letter to the European Commission and Greece’s energy ministry, for their information.

A dispute between IPTO and Euroasia Interconnector for control over the wider project’s Greek segment has prompted delays.

According to sources, Euroasia Interconnector and the Cypriot power grid operator, in a letter to RAE, recently named their representatives for a committee being assembled to work on ensuring the technical compatibility of the Greek section with the overall grid interconnection project’s Crete-Cyprus and Cyprus-Israel segments. RAE intends to soon name the committee’s Greek representatives, sources informed.

RAE, in its letter, will also highlight the need for the local interconnection project’s swift progress so as to prevent an energy shortage threat on Crete as of 2020 due to EU-required closures of outdated diesel-fired power stations still operating on the island.

Euroasia Interconnector has been granted a deadline extension until the end of the year to present capital needed for its participation in Ariadne, a special purpose vehicle (SPV) established by IPTO for the project’s Greek segment, RAE is expected to remind in its letter.

RAE’s overall handling of the matter does not contravene EU regulations or threaten the project’s PCI status, the authority contends.

 

Energean’s 2019 Israel drilling to target 2.3 Tcf in resources

Energean Oil and Gas, the London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic, has issued a Trading Update for the period from July 1 to November 13, 2018. The Group will publish a Trading Statement and Operational Update on January 16, 2019, while full-year results for 2018 will be announced on March 21, 2019, it has announced.

Highlights

  • On track to deliver first gas from the 2.4 Tcf Karish – Tanin development in 1Q 2021.
  • Scheduled first steel cut on the Karish – Tanin FPSO for 26 November 2018.
  • Targeting 2.3 Tcf gas and 31 million barrels liquids gross prospective resources with a high probability of success through the 2019 Israeli drilling programme.
  • Aiming to fill the 3.8 BCM per annum (‘bcma’)[1] of FPSO spare capacity in the medium term. Identified strong incremental demand for gas with future sales contracts targeting growing domestic and regional export markets.
  • Expecting first oil from the Epsilon extended reach well in late 2018 and achieved first steel cut on the Epsilon jacket on 26 September.
  • Started trading on the Tel Aviv Stock Exchange (“TASE”) on 29 October and expecting to enter the TA-90, TA-125 and TA-Oil & Gas Indices.
  • Strengthened the senior management team with the appointment of Iman Hill as Chief Operating Officer.
  • Well-funded for all development projects. At 30 September 2018 the group had gross cash of $289 million (net cash $160 million), plus liquidity of $68 million under its RBL and $1,275 million under its project finance facility.

Mathios Rigas, CEO of Energean said:

“Our developments are on schedule and we have an active programme of drilling in both Israel and Greece in the months ahead, targeting significant increases in prospective resources and production.

We are seeing strong incremental demand for our gas and aim to prove up enough resources to fill the 3.8 bcma of spare capacity in our 8 bcma FPSO. Future gas sales agreements will focus on both further contributing to security and diversity of supply in the Israeli markets as well as targeting key regional export markets.”

Operational Update

Israel – Karish and Tanin Development

Energean’s Karish and Tanin development remains on track to deliver first gas into the Israeli domestic market in 1Q 2021. The next visible milestone will be first steel cut on the FPSO hull on 26 November 2018.

Karish development drilling will immediately follow the Karish North well. Three development wells will target Karish Main with completion expected by 2019 year end. These three wells will deliver 4.2 bcma (c. 406 mmcfd) of firm gas sales into the Israeli domestic market from 1Q 2021. Gross production capability of the three wells is expected to be far in excess of the 4.2 bcma requirement.

The subsea workstream, managed and executed by TechnipFMC under the $1.36 billion lump sum turnkey EPCIC contract signed earlier this year, is progressing in line with expectations.

Energean has recently awarded a second contract to Wood. The latest contract, effective immediately, is to provide operations and maintenance manpower and specialist engineering services over the next five years. This follows an earlier two-year contract, awarded in April 2018, which involves the preparation of systems and procedures to ensure safety and efficiency in all aspects of the pre-operation period.

Israel – Exploration

Energean sees strong incremental demand for its gas and future gas sales contracts will target both the growing domestic and key regional export markets. Over the medium term, Energean aims to prove up enough resource to fill the remaining 3.8 bcma of spare capacity[2] in its 8 bcma FPSO and fulfil this additional demand.

The Company’s 2019 drilling programme will target 2.3 Tcf of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetised.

Planning for Karish North is currently being concluded. Spud is expected in March 2019 and drilling is forecast to take 45 days. Karish North will directly target 1.3 Tcf of gas and 16 million barrels of liquids (gross) with a volume weighted geological chance of success of 69%4.

Energean is of the view that success at Karish North could have a positive read-across to Karish East; technical analysis indicates that the fault between Karish North and Karish East does not form a barrier and, therefore, does not limit the extent or flow of any hydrocarbons. Karish East contains gross prospective resources of 0.5 Tcf of gas and 7.5 million barrels of liquids with a volume weighted geological probability of success of 70%. Karish North will also provide important read-across information for the Karish Main structure.

The exploration component of the Karish Main wells consists of drilling into the deeper D sand horizons, which have been proven in the Tamar field (upper D sands) and Aphrodite (lower D sands) discovery. Energean believes that Karish Main drilling offers additional upside beyond that reflected in NSAI independent estimates.

Greece proposes corresponding Cypriot SPV for needed grid link

Energy minister Giorgos Stathakis, responding to a Cypriot appeal for Greece to not stand as an obstacle in the island nation’s effort to end its energy isolation, has proposed that Cyprus establish an SPV of its own for swifter development of the Crete-Cyprus segment of a wider interconnection plan aiming to link the Greek, Cypriot and Israeli grids.

Despite European Commission objections, RAE, Greece’s Regulatory Authority for Energy, has remained adamant about its decision to place an SPV named Ariadne, a Greek power grid operator IPTO subsidiary, at the helm of the Crete-Athens segment’s development.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests heading the wider Greek, Cypriot and Israeli PCI-status interconnection plan, have fought for control over the Crete-Athens segment, creating a Greek-Cypriot dispute.

Cyprus fears the Greek-Cypriot-Israeli interconnection plan could be brought to the ground by the dispute, which would end the island nation’s aspirations for an electricity market interconnection with Greece and, by extension, other European energy markets.

Stathakis, Greece’s energy minister, contends the Greek SPV does not breach any regulations or agreements as all parties involved have already agreed on IPTO holding a stake of at least 51 percent in the company to develop the Athens-Crete link.

He supports that a corresponding Cypriot SPV controlling the Crete-Cyprus segment would lead to swifter progress for both the Crete-Cyprus and Crete-Athens segments of the wider project and end the island nation’s energy isolation.

 

 

Energean shares begin trading on Tel Aviv Stock Exchange

The shares of independent oil and gas exploration and production company Energean Oil and Gas have begun trading on the Tel Aviv Stock Exchange (TASE) secondary list, the group has announced in a statement.

Energean is the first London-listed, international oil and gas operator to list shares on the Tel Aviv bourse, following the largest E&P IPO in London since 2014.

Delivery of Energean’s highly attractive, flagship Karish and Tanin gas development, offshore Israel, remains on track for first gas in 1Q 2021 providing energy security and supplying gas to the Israeli domestic market.

Energean is currently at the start of an active 18-month period including first steel cut for Energean’s FPSO, the only FPSO in the East Mediterranean, scheduled for 26 November 2018, and drilling of the high potential Karish North well to commence in March 2019, with the potential to de-risk up to 1.8 TCF of resources across Karish North and Karish East.

In addition, during this 18-month period, Energean will continue to de-risk its wider Israeli portfolio which has 7.5 Tcf of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) and pursue future gas sales contracts, to target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders. Energean is also focusing on an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

Energean has also reported a significant further upside from its diverse eastern Mediterranean portfolio including exploration and appraisal opportunities in Israel, Greece and Montenegro.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented:

“There is strong momentum at Energean as we prepare to begin our active Israeli work program to deliver our flagship Israel gas project which will not only deliver significant shareholder value but provide competition and energy security to the Israeli domestic market. Alongside this in Greece we continue to focus on growing our low cost production.

“As such, we are delighted to be the first UK listed international oil and gas operator to list its shares on the Tel Aviv Stock Exchange, fulfilling our commitment that we made to shareholders at the time of our IPO, improving the breadth and depth of the Company shareholder base.

“Israel is a core component of our portfolio and we are on track to start producing gas from the only FPSO in the Eastern Mediterranean in 1Q 2021 providing competition and energy security to the Israeli domestic market, so it is only natural that we expand the accessibility of our company to the Israeli market.”

Mr. Yuval Steinitz, Minister of National Infrastructure, Energy and Water Resources, who attended the opening ceremony, remarked:

“Having Energean in the Israeli Stock Exchange is an important development. It is a positive message to the stock market, but mostly a positive message to the developing energy market of the country, a message that shows that Israel is emerging as a player in the global energy market”.

On track for first gas in 1Q 2021

Energean’s secondary listing precedes an operationally active 2019 as it continues to progress its flagship gas development on track for 1Q 2021 and the wider Israeli portfolio which has 7.5 Tcf* of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) that were awarded as part of the recent offshore licencing round.

Energean will kick off its 2019 campaign with the drilling of the high potential Karish North well in March which has the potential to de-risk more than 1.8 Tcf** of resources across Karish North and Karish East and is in line with the company’s strategy to target near field prospects where potential discoveries can be quickly, economically and safely monetised through its offshore FPSO.

Following Karish North, the Stena DrillMAX will drill three development wells into the Karish Main structure. These three wells will be the producers that deliver 4.2 bcma of gas sales into the Israeli domestic market from 1Q 2021.

Energean is building its FPSO with a production and processing capacity of 8 bcma and first steel cut is planned for 26 November 2018. Current gas sales contracts, which account for all of its existing discovered resource, underpin the 4.2 bcma of firm contracts signed to date, leaving 3.8 bcma of spare capacity for the tie-back of additional discoveries.

Future gas sales contracts will target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders.

Energean has a strong environmental track record and working successfully with local communities, The company has over 37 years’ experience of working safely in environmentally sensitive locations in NE Greece and is focused on transferring this safety and success to all areas where it is present. As the first operator of a FPSO in the eastern Mediterranean, Energean is committed to the safe production of hydrocarbons in Israel as well as being focused on leaving as little environmental footprint as possible.

 

 

Energean announces timing of Secondary Listing on Tel Aviv bourse

Energean Oil and Gas, a London Premium Listed independent FTSE250 E&P company with operations offshore Israel, Greece and the Adriatic, expects the process for its Secondary Listing on the Tel Aviv Stock Exchange to be completed on 29 October 2018, the company has announced in a statement.

Energean, whose portfolio carries 349 mmboe of 2P reserves and 48 mmboe of 2C resources, expects to become a constituent of the TA-90 and TA-Oil and Gas Indices.

The TA-90 is composed of the 90 most highly capitalized companies listed on the Tel Aviv Stock Exchange that are not included in the TA-35 Index. Energean maintains its Primary Listing on the Premium Listing Segment of the Official List of the FCA and its shares will continue to trade on the main market of the London Stock Exchange. Shares will be fully transferrable and fungible between the two markets. Energean is not issuing any new shares in connection with the Secondary Listing.

Energean is pursuing the Secondary Listing in order to further expand the accessibility of its Oil & Gas growth story to a wider pool of investors; improve the breadth and depth of the company shareholder base, ultimately improving the liquidity and tradability of the shares; and fulfil the commitment the Company made at IPO to pursue a secondary listing on the Tel Aviv Stock Exchange.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented: “Israel is a core component of our portfolio and we are on track to start producing gas from the only FPSO in the Eastern Mediterranean in 1Q 2021. We have already secured contracts to supply 4.2 bcma of gas into the growing Israeli domestic market, contributing diversity and security of supply. Looking ahead, our future gas sales agreements will target both domestic and key export markets in the region. Our Tel Aviv Stock Exchange Listing fulfils a further commitment that we made to shareholders at the time of our London Stock Exchange IPO and I am pleased to further expand the accessibility of our company to a wider pool of investors.”

In August, 2017, Energean Oil & Gas received Israeli Governmental approval for the FDP for its flagship Karish-Tanin gas development project, where it intends to use an FPSO and 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.

In Greece, the company is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

ACER complaint on Crete-Athens link backs Brussels, project in limbo

Just days after objections were raised by the European Commission, ACER, Europe’s Agency for the Cooperation of Energy Regulators, has also expressed its disapproval of a decision by RAE, Greece’s Regulatory Authority for Energy, giving power grid operator IPTO permission to establish a special purpose vehicle (SPV) for financing and development control of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

ACER, which made clear its discontent – and astonishment – in a letter forwarded to RAE, described the authority’s initiative as a “unilateral move”, energypress sources informed. RAE has yet to respond.

The Crete-Athens interconnection project’s future now appears to be in limbo as this second intervention by a European institution adds further weight to the European Commission’s insinuation that the link would cease to enjoy PCI status and subsequent EU backing if the RAE decision is upheld.

Brussels reacted to the RAE move by noting the authority cannot award Crete’s major-scale interconnection with Athens to any party until the end of the year, the time period given to Euroasia Interconnector – a consortium of Cypriot interests responsible for a wider project planned to link the Greek, Cypriot and Israeli power grids – to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

Compatibility concerns have already been raised about four transformers to be installed in the wider Athens area, Crete, Cyprus and Israel for the Euroasia Interconnector.

Also, Cypriot officials, in comments to energypress, cited the emergence of a national issue as Cyprus now finds itself detached from the EU – regarding the project – as a result of the RAE move at a time when the island’s Turkish-occupied northeast is seeking a power grid interconnection with Turkey.

 

 

 

Energean gas resources in Israel 40 times the size of annual Greek needs

The 212 billion cubic meters (bcm) of recoverable prospective natural gas resources included in an updated Competent Persons Report (CPR) by petroleum industry consulting firm Netherland Sewell & Associates (NSAI) for the Israeli portfolio of Energean Oil and Gas, the independent oil and gas exploration and production company focused on the eastern Mediterranean, would cover demand in a country with the consumption patterns of Greece for about 40 years.

Annual natural gas demand in Greece ranges between 5 and 6 billion bcm, roughly forty times less the figure reported by NSAI, an independent consulting firm.

Of the 212 bcm, 86 bcm are located in the Karish and Tanin fields being exploited by Energean in Israel, while the other 126 bcm have been identified at five new blocks, numbered 12, 21, 22, 23 and 31, whose rights were acquired by the energy company last December.

The NSAI report’s findings essentially bolster Energean’s potential to export from its Israeli fields to other markets. Possible export destinations will depend on geopolitical developments and outcomes of various regional pipeline development plans being negotiated in recent years.

A portion of Energean’s offshore Israel natural gas resources could be exported to Cyprus, for example, if a 200-km pipeline plan linking the two countries is developed. A portion of these resources could also be exported to Greece should the ambitious East Med pipeline plan proceed.

A Floating Production Storage Offloading (FPSO) facility being constructed for the development of the Karish field is planned to have an annual natural gas production capacity of 8 bcm.

Also, Energean Israel, an Energean subsidiary holding a 70 percent stake of the aforementioned Israeli fields, has already signed a sale agreement for 4.2 bcm of annual supply to the Israeli market of natural gas reserves already discovered. Given the FPSO’s capacity, a further 4 bcm could be exported.

Energean recently announced a decision to go ahead with exploratory drilling at Karish North. According to an NSAI estimate, this area holds 38 bcm of natural gas resources and 16.4 million barrels of liquid hydrocarbons resources.

 

Energean’s Israeli reserves, resources increase significantly

An updated Competent Persons Report (CPR) for the Israeli portfolio of Energean Oil and Gas, the independent oil and gas exploration and production company focused on the eastern Mediterranean, includes the certification of 63 bcm (2.2 Tcf) of 2P reserves and 7.5 Tcf of gross prospective resources and is the first assessment of prospective resources in the new Blocks (12, 21, 22, 23 and 31) that were awarded as part of the recent offshore licencing round, Energean has just announced in a statement.

The oil and gas firm’s updated CPR was provided by petroleum industry consulting firm Netherland Sewell & Associates.

Mathios Rigas, CEO of Energean Oil & Gas, commented: “We are pleased that our independent reserves auditors have identified 7.5 Tcf of prospective resource across our Israeli acreage with a very high probability of geological success, across which we have limited exploration capital commitments.  The outcome is consistent with Energean’s view that our portfolio contains multiple attractive near-field exploration opportunities that could deliver significant upside alongside our existing Karish and Tanin development. The conversion of contingent resources demonstrates our commitment to increasing reserves and underpins a more-than-six times increase in our independently verified 2P reserves at IPO.”

The updated CPR includes 63 bcm (2.2 Tcf) of gas and 31.8 million barrels of liquids (gross, Energean 70%) of 2P reserves in the Karish and Tanin fields. Energean’s independently certified net 2P reserves are now 349 mmboe, an increase from the 51 mmboe estimated when Energean undertook its London Stock Exchange listing in March 2018.

Contingent resources in the Karish field of 5.4 bcm (0.2 Tcf) of gas and 1.0 million barrels of liquids (Gross, Energean 70%) are recognized. Remaining contingent resource relates to the Karish B reservoir.

Overall 2P reserves plus contingent resources across the Karish and Tanin leases remain the same.

The updated CPR also recognises gross recoverable prospective resources of 212 bcm (7.5 Tcf) of gas and 101 million barrels of liquids (Energean 70%), consistent with Energean’s view that its acreage contains an attractive number of near-field prospects where potential discoveries can be quickly and economically monetised. The Karish FPSO is being built with gas production and processing capacity of 8 bcm/yr.

Energean Israel (Energean 70%) has sold 4.2 bcm/yr of discovered gas volumes, leaving 3.8 bcm/yr of available FPSO capacity for the potential tie-back of future discoveries.

Energean recently committed to drill a well in the Karish North exploration prospect. NSAI estimates that the Karish North well will target 38 bcm (1.3 Tcf) of gas and 16.4 million barrels of liquids (gross, Energean 70%) and has a 69% volume weighted probability of geological success.

The option to drill additional exploration wells remains open. Energean has six options remaining within its Stena drilling contract.

 

 

 

Slow Athens-Crete link action raising island’s energy fears

Crete’s major-scale electricity grid interconnection with Athens is a PCI-status project as it represents a part of the wider Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids, meaning EU terms and conditions will need to be observed for the Crete-Athens link, the European Commission informed participants at a related meeting in Brussels earlier this week.

Greek and Cypriot regulatory authorities for energy, the European Commission, and the Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector project, took part in the meeting.

Officials of Greece’s power grid operator IPTO, which is at odds with the Euroasia Interconnector consortium for control of the Athens-Crete link’s development, skipped the meeting claiming there was no chance of any agreement on the issue with Euroasia Interconnector, a consortium of Cypriot interests.

The Athens-Crete interconnection has fallen behind schedule. Slow-moving bureaucratic procedures in Brussels have intensified Greek concerns of a serious power sufficiency problem on Crete as of 2020. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

The Athens-Crete link’s PCI status promises to offer the project fast-track licensing advantages, reduce the risk of legal challenges by rival companies, and ensure transparent procedures.

RAE, Greece’s Regulatory Authority for Energy, will most likely award the Athens-Crete link’s development to IPTO, but, even so, the power grid operator will need to stage a tender and include other companies. Belgian power grid operator Elia, currently examining details of the wider Greek-Cypriot-Israeli link, is believed to be interested in participating in the Athens-Crete project.

Valuable time will have been lost by next month, when developments are expected, which will increase the urgency of Crete’s looming energy sufficiency problem.

 

 

Energean board endorses Karish & Tanin project’s FID

The board of directors at Energean Oil & Gas has approved the Final Investment Decision (FID) to proceed with the $1.6 billion Karish & Tanin Development Project, offshore Israel, the company has just announced in a statement.

$405 million of the $460 million raised from the recent IPO of Energean will be used to fund the company’s 70% share in the project, while the remaining 30% will be funded by Kerogen Capital, Energean’s partner in the project.

The project is also being financed through a Senior Credit Facility of US$1.275 billion recently announced and underwritten by Morgan Stanley, Natixis, Bank Hapoalim and Société Générale.

Energean has secured long-term gas agreements with some of the largest private power producers and industrial companies in Israel. The company has contracted for the purchase of a total of 61 BCM of gas over a period of 16 years, at an annual rate of approximately 4.2 BCM per year (on an ACQ basis).

Energean will develop the project through a new build, owned FPSO with gas treatment capacity of 800 MMscf/day (8 BCM/per annum) and liquids storage capacity of 800,000 bbls, which the company believes provides a flexible infrastructure solution and, potentially, the scope to expand output for potential additional projects.

A 90km gas pipeline will link the FPSO to the Israeli coast and necessary onshore facilities to allow connection to the domestic sales gas grid operated by INGL, the national gas transmission company.

The entire project infrastructure has been contracted to be engineered, built and commissioned under a lump sum EPCIC Contract with Technip FMC, with a contracted delivery date of Q1 2021.

During 2019, three wells will be drilled into the Karish discovery, using the Stena Forth Drill Ship which is under contract from Energean.

The company has also secured options to drill five further wells in the licences Energean holds in Israel.

Energean Oil & Gas CEO, Mathios Rigas, commented: “We committed to the investors in the IPO that we would take FID immediately after the equity raise and I am pleased to be honouring this, the day after the shares started trading on the London Stock Exchange.

“Today, we commence the development of the project having, in a very short period of time, secured the necessary gas contracts, a turn-key EPCIC contract with Technip FMC, a drilling contract with Stena and project finance backed by four international banks. All this has been achieved in just 14 months since January 2017, when the Israeli Government approved the transfer of the licences to Energean.

“The Karish & Tanin development will bring competition and security of supply to the Israeli gas market, and will support Energean’s strategy to become a major player in the gas developments of the East Mediterranean.

“Owning and operating the only FPSO in the East Mediterranean with an 8 BCM per annum capacity gives Energean significant scope for growth through being able to support potential additional gas discoveries from Karish & Tanin and the five adjacent licences that we own in Israel.”

 

 

Energean signs $1.275bn finance deal for Karish project

Energean Oil & Gas subsidiary Energean Israel has signed a secured  Senior  Credit Facility of up to US$1.275  billion with Morgan  Stanley, Natixis, Bank Hapoalim and  Societe Generale as Mandated Lead Arrangers (“MLAs”), the company has announced in a statement.

The Facility Agreement will be the primary source of funding for the development of the Karish offshore gas field over the next three years, with first gas production expected in early 2021.

It also promises to provide further momentum for the company to make a Final Investment Decision (“FID”) on Karish and Tanin.

Energean Oil & Gas CEO, Mathios  Rigas, commented:  “We are  rapidly  advancing the Karish and Tanin development by continually delivering on substantial project milestones.

“The participation of four international banks in the Facility Agreement is a strong vote of confidence in Energean’s flagship project. Long-term cash flow from Karish and Tanin has been secured through our previously signed gas supply agreements for approximately 4.2 BCM per year with 12 established counterparties.

“Furthermore, Energean has signed a US$1.36 billion contract with TechnipFMC for the construction of an FPSO with a production capacity of 8 BCM per year, potentially enabling us to take advantage of future production potential from our existing licences or adjacent fields to deliver gas to a rapidly growing regional market.

“The company is in the process of raising the equity required to develop Karish and Tanin through a premium listing on the London Stock Exchange’s Main Market. At the same time, we are pressing  ahead  with  the  expansion  programme  of  our  existing  production and development base in the Eastern Mediterranean, to deliver our next phase of growth.”

East Mediterranean action suggests gas export boundaries stretchable

Heightened natural gas sector activity witnessed in the east Mediterranean region over the past few days, combined with various other moves, including changing regional market conditions, to a certain degree, suggest gas exports to more distant markets beyond the east Mediterranean are possible.

Developments in recent days have included the establishment of an agreement for Israeli gas supply to Egypt, which coincides with an increased drive by Greece’s Energean to finance an ambitious investment plan.

The Israeli firms Delek Drilling and Noble Energy have just signed two binding agreements to export gas to Egyptian company Dolphinius Holdings Ltd. The energy companies will supply 64 billion cubic meters (bcm) of natural gas from the Tamar and Leviathan gas fields over ten years.

The two sides will, as a first objective, seek to transport the gas via the existing EMG pipeline, which previously transported gas in the opposite direction, from Egypt to Israel.

If this is not possible, other options include exporting the gas via pipeline to Jordan and then to Egypt or via a new pipeline linking Israel to Egypt.

The Israeli gas will be directly aimed at the Egyptian market, not Egypt’s two LNG terminals for liquefaction, meaning the agreement does not represent an additional step for Delek Drilling and Noble Energy. For the time being, both firms are continuing to eye regional markets ahead of more distant ones.

This agreement, in an indirect way, should facilitate the export of Cypriot gas for liquefaction at the Egyptian plants, as it leaves unutilized larger production capacities at the terminals.

A recent move by Greece’s Energean into the Israeli gas market with gas sales and purchase agreements for natural gas supply from its Karish and Tanin fields, offshore Israel, at price levels 33 percent less than those paid by Israel’s power utility for supply from the Tamar gas field, has prompted the utility to react and request a price reevaluation from its suppliers. They have remained adamant, noting no changes will be made until at least 2021, based on supply contracts already signed.

Energean’s entry into the Israeli market has certainly not gone by unnoticed. The increased level of competitiveness resulting from this entry vindicates Israeli government and market officials who, in the past, had backed competition and the  division of gas fields so as to enable the entry of new players.

The maintenance of low prices in Israel could eventually make exports to more distant markets, such as European markets, more viable.

Energean Israel appoints Stena Drilling for drilling at Karish Field

Energean Israel, a subsidiary of leading independent E&P company Energean Oil & Gas, has signed a contract with Stena Drilling for the development drilling of its Karish Field, offshore Israel, the firm has announced.

A wholly-owned subsidiary of Sweden’s Stena AB, Stena Drilling, headquartered in Aberdeen, Scotland, and standing as one of the world’s leading independent drilling contractors, will deploy the Stena Forth drillship, or any substitute agreed to by the parties, to drill three development wells in Q1 2019, with provision for further options, subject to Energean’s Final Investment Decision (FID) regarding the Karish and Tanin fields.

The Stena Forth, one of the DrillMAX Fleet vessels, is a DP Class 3 ultra-deep water drillship with a track record in world-wide operations, ranging from the Mediterranean (Libya), Egypt (Gulf of Suez), Malaysia, Greenland and the US (Gulf of Mexico).

The Stena Forth will be mobilised from Las Palmas, Spain, where the vessel is currently located. The Karish development program includes the drilling of three development wells and production from a new Floating Production, Storage and Offloading (FPSO) vessel, approximately 90km offshore. First gas is expected in 2021.

Energean considers this agreement to be a significant step in the development of Karish and part of a development plan targeting gas supply to the growing Israeli gas market.

Stena Drilling’s calibre, experience and safety record was crucial in making this decision, given Energean’s commitment to achieving the highest standards of HSE performance and the requirement to operate in line with or exceed the European Directive on Safety of Offshore Oil & Gas Operations, as implemented by the UK safety directive, the company noted.

Israeli gas grid operator considering East Med entry

The participation of Israel’s natural gas grid operator, the Natural Gas Lines Company, in the development of the East Med pipeline, planned to carry southeast Mediterranean natural gas deposits along a route stretching from Israel to Europe, is being examined by the Israeli government, energy minister Yuval Steinitz has revealed.

Established in 2003, the Israeli gas grid operator, wholly owned by the Israeli State, holds a 30-year license for development and management of the country’s natural gas network.

In comments offered to Israeli financial daily Globes, Steinitz, highlighting the important role played by the Natural Gas Lines Company in the domestic natural gas market’s growth, noted that the participation of a state-controlled Israeli firm in the East Med pipeline project would offer further impetus to its development.

The prospective pipeline has already received political support from the governments of Greece, Cyprus, Israel and Italy, as was made clear at a four-way meeting in December, staged for the signing of a Memorandum of Understanding.

The Globes article on the East Med project made reference to the gas pipeline’s technical challenges, which exist mainly because of the deep seas between Cyprus and Crete, an area where waters run close to 3.3 kilometers deep.

Subdued natural gas prices at present have also raised questions about the project’s feasibility. The price gap between regional and European markets will need to be between 1 and 2 dollars per mmBtu, currently not the case, if East Med’s feasibility is to be ensured.

However, this could change with the involvement of Greek firm Energean Oil & Gas, now a player in Israel’s Exclusive Economic Zone (EEZ) with licenses to the Karish and Tanin Fields, offshore Israel. Energean recently acquired further hydrocarbon exploration rights in another Israeli tender.

Less than two months ago, Energean Oil & Gas signed a series of natural gas sales agreements with Israeli gas retailers, offering price levels of less than 4 dollars per mmBtu, well below the price of Russian gas being sold to Europe, ranging between 6 and 7 dollars per mmBtu. This discrepancy is good news for the East Med pipeline’s prospects. Other players may follow Energean with similar price levels.

Utilization of recently discovered natural gas deposits in the wider area, such as Cyprus’s “Aphrodite” gas field and the Israeli-controlled block “Leviathan”, is in jeopardy as a result of the inability, so far, of governments and energy companies to establish export solutions.

 

 

 

Communications cable alongside EuroAsia Interconnector

An agreement has been reached for the installation of a submarine communications cable system (Quantum Cable) to connect Greece, Cyprus and Israel. It will run parallel to the EuroAsia Interconnector, planned to link the power grids of the three countries.

It has just been revealed that a Memorandum of Cooperation was signed last week in Nicosia between Quantum Cable and a leading global sector player based in the US for the communications cable system’s installation.

This subsea ultra-fast cable system will be installed at a depth of more than 3,000 meters. Its overall development cost is expected to reach approximately 200 million dollars and will be undertaken by the Quantum Cable firm.

Nasos Ktorides, who heads both Quantum Cable and the EuroAsia Interconnector consortium, formed to develop a 2,000-MW electricity interconnection, noted that the Quantum Cable submarine communications cable system will offer considerable capacity to handle tens of millions of concurrent high-resolution teleconferences between Asia and Europe.

A simultaneous launch for the two projects is being planned, which would greatly reduce the development costs of both.

Ktorides noted that the fiber-optic cable connection will also play a supportive role for the growing demand in high-speed connections, Cloud, data center and electronic services between Asia and Europe.

Last June, Greek Prime Minister Alexis Tsipras and his Israeli and Cypriot counterparts, Benjamin Netanyahu and Nicos Anastasiades, respectively, agreed to support the development of the undersea cable, whose broader scale is seen as a vital link between Europe, the Middle East and Asia.

 

 

 

Katakolo 10m barrel estimate a major bonus for Energean

An Energean Oil & Gas hydrocarbon block in Katakolo, off western Peloponnese, has been certified to measure 10.7 million barrels by an independent agency, representing triple the amount of an initial estimate of 3 million barrels made by Greek authorities when staging an international tender for the block.

The development comes as a major bonus on the domestic front for Energean Oil & Gas, whose CEO Mathios Rigas has essentially based himself in London to organize financial matters concerning a 1.5 billion-euro investment by the company in Israel. As a result, Dimitris Gontikas, managing director of Energean Oil & Gas subsidiary Kavala Oil, is now managing Energean’s domestic matters.

Besides the Katakolo bonus, Energean’s domestic prospects include the Prinos block in south Kavala, certified by an independent agency to possess 40 million barrels, and, possibly, a further 20 billion barrels.

As for Energean’s interests in Israel, the company’s certified deposits amount to 2.4 trillion cubic feet of natural gas, the equivalent of 446 million barrels of crude. Energean holds a 50 percent stake in Energean Israel, which fully owns the Karish and Tanin fields.

Energean signs further gas sale contracts with Israeli firms

Energean Israel has signed further gas sales and purchase Agreements (GSPAs) for natural gas supply from the Karish and Tanin fields, offshore Israel, Energean Oil & Gas has announced.

GSPAs totalling up to 2.6 billion cubic meters of natural gas annually have been signed with one of the largest industrial groups in Israel, comprising Israel Chemicals, Bazan Oil Refineries, and the independent power producer OPC.

In addition, a GSPA totalling up to 0.3 BCM has also been signed with Rapac Group, a leading group focusing on telecom, government, as well as energy and infrastructure in Israel.

The new GSPAs, together with those already signed with Dalia Group, Dorad Group and Edeltech Group, bring the annual total committed purchase volume to more than 4 BCM per year of natural gas from the Karish and Tanin fields.

“In just one year since the Israeli government granted its approval for the acquisition of the Karish and Tanin fields, Energean has succeeded in securing its targeted gas supply volume to help de-risk the project. Some of the leading private Israeli companies have seized the opportunity to buy gas at an attractive price and Energean has brought competition to the market for the benefit of Israeli consumers and the country’s economy,” commented Mathios Rigas, CEO at Energean Oil & Gas.

 

East Med natural gas pipeline MoU to be signed in Nicosia today

Greece’s energy minister Giorgos Stathakis is in Nicosia today for a four-way Greek, Cypriot, Israeli and Italian meeting, along with EU participation, at which a Memorandum of Understanding for the East Med natural gas pipeline project is expected to be signed.

The prospective pipeline project is planned to carry southeast Mediterranean natural gas deposits along a route stretching from Israel to Europe.

Rejuvenated interest expressed by Italian officials in East Med has bolstered the ambitious project’s development prospects and prompted European Commission support for the project.

Preliminary studies co-financed by the EU have determined the project is technically feasible, financially sustainable and commercially competitive.

Its annual transmission capacity is planned to measure 10 billion cubic meters. The pipeline will be designed to enable a capacity increase to 16 billion cubic meters if needed. The project’s cost is estimated at 6 billion euros. Studies conducted to date indicate the project could be completed by 2025.

Following up on today’s MoU, technical teams representing Greece, Cyprus, Israel and Italy are scheduled to meet on December 21 to sign a finalized agreement.

Then, the leaders of Greece, Cyprus and Israel plan to stage a three-way meeting in Nicosia on January 8.

An article published by the Jerusalem Post to coincide with today’s four-way meeting presented the Greek-Cypriot-Israeli energy collaboration as part of a “series strategic interests” as well as an effort by the three countries to “restrict the Russia-Iran-Hezbollah axis in the region.”

This description has raised eyebrows and further complicates any attempt to determine hydrocarbon trends in the southeast Mediterranean, highly significant both geopolitically and geoeconomically.

 

 

Minister heading to Nicosia for EuroAfrica Interconnector

Energy minister Giorgos Stathakis is scheduled to attend a trilateral meeting in Nicosia next Tuesday where Greek, Cypriot and Egyptian officials will discuss the development of the EuroAfrica Interconnector, a 2,000-MW submarine cable project planned to link the electricity networks of Greece, Cyprus and Egypt with the European system.

Next week’s meeting comes follows a Memorandum of Understanding signed with the Egyptian electricity company EEHC in Cairo last February.

The ambassadors of Greece and Cyprus, as well as top officials from Egypt’s electricity and energy ministry, attended February’s signing ceremony, during which Egyptian president Abdel Fatah al-Sisi expressed personal interest for the interconnection project’s development.

The EuroAfrica Interconnector promises to provide considerable economic and geopolitical benefits to the countries involved, Greek, Cypriot and Egyptian officials have pointed out.

Sector experts will also attend next Tueday’s meeting to offer their views on the project’s prospects and sustainability, and also present the results of studies called for by the MoU.

If officials reach a consensus on the findings, prospects and sustainability, then procedures leading to the project’s actualization are expected to gain momentum.

According to initial estimates, the interconnection project will require 36 months to develop once all related studies have been completed.

Greece is also involved in another prospective international interconnection project, the EuroAsia Interconnector, along with Cyprus and Israel.

Development of both projects promises to establish Cyprus as a hub linking the electricity networks of three continents.

According to reports, a further extension of the EuroAfrica Interconnector, to incorporate other African and Middle East countries, is also being looked at. Such a prospect would greatly increase the significance of both projects and their combined role in the transmission of electricity from various sources to Europe’s network.

 

Energean signs new agreements for gas supply from Karish, Tanin fields

Energean Israel has signed three new Gas Sales and Purchase Agreements (GSPAs) with Dorad Energy Ltd, and with Ramat Negev Energy Ltd and Ashdod Energy, both subsidiaries of the Edeltech Group, for natural gas supply from the Karish and Tanin Fields, offshore Israel, Energean Oil & Gas has announced.

Under the GSPA signed with Dorad, Dorad will purchase up to 6.75 billion cubic metres of natural gas from Karish and Tanin’s reservoirs over the lifetime of the contract, a period of at least 14 years.

Under the GSPAs signed with Ramat Negev and Ashdod, the two companies will purchase a total amount of up to 2.65 BCM of natural gas from Karish and Tanin’s reservoirs over the lifetime of the contracts, a period of at least 14 years.

Energean Oil & Gas CEO, Mathios Rigas, commented: “We are delighted to have made such rapid progress in securing these agreements. Israel’s private sector is taking advantage of the competitive prices offered by Energean. Companies that agree to receive natural gas from the Karish and Tanin fields strengthen their position in the local market and secure cheaper energy for the future.

“Energean has signed with Dalia, Dorad and Edeltech GSPAs for a total of up to 33 BCM in volume so far. The company has secured revenues of approximately $3 billion, underpinned by Take or Pay arrangements and firm floor prices once all conditions are satisfied. We are delivering the contracts we have promised as planned and we are working steadily towards achieving all the milestones on the project required to reach Final Investment Decision.”

On behalf of Dorad, Erez Halfon, Chairman of EAPC and Dorad said: “The agreement balances the need for certainty and reliability of supply alongside an attractive price. The agreement with Energean will enable Dorad to prepare for the expansion of Dorad’s production capacity through Dorad B and the progression towards selling electricity to end users in the regions of Ashkelon and the Gaza perimeter. The Dorad Power Plant is responsible for creating competition in the electricity market, and Dorad naturally supports the development of small reservoirs that promote competition in the Israeli natural gas market. ”

On behalf of Ramat Negev and Ashdod it was stated: “The GSPA’s signed today enable the diversification of natural gas supply sources for local projects and contribute to the companies’ business strategies.”

Energean is a leading independent E&P company focused on the eastern Mediterranean region, where it holds nine E&P licenses, encompassing offshore Israel, Greece, the Adriatic and onshore North Africa. It is the only oil and gas producer in Greece with a 35-year track record of operating offshore and onshore assets in environmentally sensitive areas and employs 382 oil and gas professionals. The group has 37 million barrels (2P) in the Prinos License, offshore North-Eastern Greece and through its subsidiary Energean Israel, a company jointly owned by Energean and Kerogen Capital, resources of approximately 430 million barrels of oil equivalent (2C) in the Karish and Tanin Fields.

The company has recently received approval from the Israeli Government of the FDP for the Karish and Tanin fields, aiming to use an FPSO and produce first gas in 2020. The company is also pursuing an ongoing investment and development programme to increase production from the Prinos and North Prinos Oil Fields and develop the Epsilon Oil Field, located in the Gulf of Kavala, Northern Greece. Energean has secured a 25-year exploitation license for the Katakolo offshore block in Western Greece with first oil expected in 2019/20, representing the first production of oil or gas in the west of the country. Energean also has significant exploration potential in the licenses held in Western Greece, Montenegro and Egypt, which provide the basis for future organic growth.

Dorad, established in 2014, is owned by EAPC (37.5%), Zorlu Energy (25%), Dori Energy (18.75%) and Edelcom (18.75%). The power plant is based on Combined cycle and is supplied with natural gas as its main fuel, and diesel fuel as a backup. The plant has a production capacity of approximately 860MW.

Dorad’s customers include Osem, Strauss, Bank Hapoalim, Mekorot, the Ministry of Defense and others.

Dorad is planning to build another power station – Dorad B, which is expected to be built in the existing station, and to produce 650 MW of electricity. With the establishment of Dorad B, Dorad will supply the Israeli economy with more than 10% of the total electricity consumption.

The projects, which began to operate commercially about two years ago, are owned by Edeltech Ltd. (57.85%) and Zorlu Energy (42.15%). The companies operate in the sites of Adama Company, with Ramat Negev Energy operating in the Adama Machteshim site in Neot Hovav, at a capacity of 125 megawatts, and Ashdod Energy with a capacity of 65 megawatts operating in the Adama Agan site at Ashdod industrial area. Both power plants are providing electricity to the sites consumers and other consumers, and also provide steam, as well as other industrial services, to the host factories and to nearby factories as well.

 

 

Cyprus taking on East Med investment, operational costs

Cyprus willl take on investment and operational costs that may arise for East Med, a prospective pipeline to carry southeast Mediterranean natural gas deposits along a route stretching from Israel to Europe, RAE, Greece’s Regulatory Authority for Energy, and RAEK, its Cypriot counterpart, have agreed.

Both authorities also agreed that the division of the project’s overall cost is substantiated, making conditions mature for the project’s development to commence.

IGI Poseidon, a 50-50 joint venture comprised of DEPA, Greece’s Public Gas Corporation, and Italy’s Edison, is promoting the East Med pipeline.

At present, preliminary deep-sea survey work is being planned around Cyprus and Crete to determine the pipeline’s route.

Then, the next step, scheduled for December, will entail a four-way meeting to bring together the energy ministers of Greece, Cyprus, Israel and Italy for the signing of a Memorandum of Understanding.

The East Med pipeline is planned to cover about 1,900 kilometers and connect east Mediterranean deposits with western Greece via Cyprus, Crete and the Peloponnese.

Its annual transmission capacity is planned to measure 10 billion cubic meters. The pipeline will be designed to enable a capacity increase to 16 billion cubic meters if needed. Studies conducted so far indicate the project’s construction cost could reach 6 billion euros.

Officials plan to utilize prospective interconnections towards Bulgaria (IGB), Albania (IAP) and Italy (ITGI).

East Med was classified as a Project of Common Interest (PCI) by the EU in 2013, a decision that facilitates EU funding, while an EU-financed feasibility study was completed last year.