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.

 

 

 

 

Four-way East Med agreement set to be signed tomorrow

Greek, Italian, Cypriot and Israeli officials are scheduled to sign a Memorandum of Cooperation in Rome tomorrow as a further step in the long road leading to the development of East Med, a 6.2 billion-euro project designed to transmit natural gas along a route stretching from Israel to Europe.

Greece will be represented by the energy ministry’s secretary general Mihalis Veriopoulos at the meeting, to be staged as a prelude to an Intergovernmental Agreement for the pipeline project expected to be signed in Cyprus at the end of this year. The Cyprus agreement, which will also include Italian representation, will be a crucial step for the project’s investment prospects.

In the lead up to tomorrow’s  memorandum, Greece Cyprus and Israel had signed a joint declaration on June 15 in recognition of the significant progress made with preliminary technical and financial plans concerning the East Med project.

The energy ministers of Greece, Cyprus and Israel signed the declaration in June as part of a summit meeting at which the heads of state of all three countries made commitments to develop the project.

The East Med pipeline is planned to cover 1,900 kilometers underwater at a depth of as much as three kilometers and transfer approximately 10 billion cubic meters of natural gas, annually, from deposits in the southeast Mediterranean towards Europe.

The project is receiving full support from the European Commission as it represents a new natural gas supply source that promises to reduce Europe’s major energy reliance on Russia.

Israeli gov’t OKs Energean Karish, Tanin gas fields development plan

Energean Israel, a 50-50 joint venture involving Energean Oil & Gas subsidiary Energean Israel and Kerogen Capital, has received approval from the Israeli Petroleum Commissioner for its Field Development Plan (FDP”) for the development of the Karish and Tanin natural gas fields, offshore Israel, Energean Oil & Gas announced in a statement released today. The FDP application was submitted on 20 June 2017.

As stated at the time of submission, Energean Israel owns 100 per cent of the Karish and Tanin Fields, which combined have 2.7 TCF of natural gas and 41 million barrels of oil equivalent (mmboe) of light hydrocarbon liquids, totalling 531 mmboe of 2C resources.

The Karish Main Development envisages drilling three wells, using a Floating Production Storage and Offloading (FPSO) unit that will be located approximately 90 km offshore with a production capacity of 400 mmscf/day.

The next stage in the field development, which envisages first gas production in 2020, is to reach the Final Investment Decision (FID) which is anticipated before the end of 2017.

The company has appointed Morgan Stanley as Project Finance Advisor for the 1.3-1.5 billion dollar investment required for the Karish development.

Commenting on the approval, Energean CEO, Mr. Mathios Rigas, noted: “The Israeli Government’s approval of the Field Development Plan is a major milestone and achievement for us, and we are grateful for their swift handling of our submission. We are working at full speed to achieve the planned FID by year end, and have made significant progress in agreeing terms on the necessary gas sales contracts to this effect. We have already signed agreements or MOU’s for volumes exceeding 3 BCM per year. FDP approval takes us a significant step nearer to delivering a more competitive gas market to the benefit of the people and businesses of Israel.”

 

 

 

Energean to develop Karish gas field first, then Tanin, in Israel

A plan submitted by Energean Oil & Gas to Israeli authorities for the development of the Karish and Tanin offshore natural gas fields has been approved by a special state committee.

The Greek oil and gas company has reached gas sale agreements in the Israeli market based on annual production forecast to reach a total of 4 billion cubic meters from these fields.

“The plan represents yet another step forward for the Israeli energy sector and indicates that it is in line with the timetable set,” noted Israel’s energy minister Yuval Steinitz. “The implementation of the plan for small-scale deposits endorsed by the government promotes their development, strengthens competition and reduces prices for new contracts,” he added.

Based on the plan submitted by Energean Oil & Gas, the Karish offshore gas field will be developed first, while Tanin will follow, depending on overall gas demand and the progress of development at the Karish field.

It is estimated that the two gas fields possess 55 billion cubic meters of natural gas, while production is expected to commence in 2020.

A floating, production, storage and offloading (FPSO) unit will be developed 90 kilometers from the Israeli coastline, along with submarine transmission infrastructure, for extraction. The plan also includes an 80-kilometer pipeline to carry natural gas to Israel’s main network.

The pipeline infrastructure’s transmission capacity will exceed current needs in order to cover additional capacity that may be required in the future.

 

Energean reaches triple gas supply deal for Israeli market

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.

 

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.

 

 

Energean Israel submits FDP for Karish, Tanin natural gas fields

Energean Israel, a subsidiary of Energean Oil & Gas, has submitted a Field Development Plan (FDP) for the Karish and Tanin natural gas fields, offshore Israel, to the Israeli Petroleum Commissioner, Energean has announced in a statement.

Energean Israel holds 100% of Karish and Tanin, which, combined, possess 2.7 TCF of natural gas and 41 million barrels of oil equivalent (mmboe) of light hydrocarbon liquids, totaling 531 mmboe 2C resources.

The Karish Main Development envisages drilling three wells, using a new Floating Production Storage and Offloading (FPSO) unit that will be installed approximately 90 km away from shore, with 400 mmscf/day capacity. The development through an FPSO will enable Energean to maximise the recovery of reserves and minimize environmental impact. It will also allow light hydrocarbons liquid to be safely processed, stored and offloaded away from the coast, with minimal onshore installations needed.

The Karish Main Development will also comprise a dry gas pipeline connecting the field to the Israeli natural gas transmission system. First gas is expected in 2020. Total estimated capex for the Karish development is US$1.3-1.5 billion.

The Tanin Area Development will follow the development of Karish and envisages drilling six wells connected to the same FPSO.

During the term of the lease, which runs until 2034, and which may be extended to 2044, the Karish and Tanin development is estimated todeliver 88 BCM of natural gas to the Israeli market while up to 44 million barrels of light hydrocarbon liquids will potentially be exported to regional and international markets.

On submitting the FDP, Energean Chairman & CEO, Mr. Mathios Rigas, commented: “The submission of the FDP represents the achievement of yet another target we have set for Energean as part of our wider goal to bring competition to the Israeli gas market, for the benefit of consumers and the Israeli economy in general. We will continue working closely with the Israeli Government to obtain the required approval of the FDP as soon as possible in order to be able to reach Final Investment Decision by the end of 2017. Following the gas sales agreement signed recently with Dalia Power Energies and Or Power Energies, we are in discussions with other buyers eager to benefit from competitive terms offered for the supply of gas in Israel.”

“The Karish and Tanin development is a top priority in Energean’s strategy to become the leading independent E&P company in the Eastern Mediterranean.”

 

 

Energean signs gas supply deals with Israel’s Dalia, Or

The Energean Oil & Gas subsidiary Energy Israel has signed respective agreements with Dalia Power Energies and its sister company Or Power Energies for the supply of natural gas from the Karish and Tanin fields, offshore Israel, Energean announced in a statement released today.

Dalia and Or will purchase part of their gas requirements from Karish-Tanin to operate the Dalia power plant, the largest private power station in Tzafit, south-central Israel, as well as future power plants to be built by Or.

Under the supply agreements, Energean Israel has undertaken to supply the purchasers with an overall amount of up to 23 billion cubic meters of natural gas from Karish-Tanin reservoirs over the lifetime of the contracts.

The period of the supply agreements will start from the date natural gas flows in commercial volumes from Karish-Tanin to the purchasers, and conclude at the point when the pPurchasers’ generation licenses need to be extended.

The purchasers have agreed to a Take or Pay arrangement for a minimum annual amount of natural gas from Energean Israel, at a price linked to Israeli electricity markets and underpinned by a floor price.

Energean Oil & Gas Chairman & CEO, Mr. Mathios Rigas commented: “This is a significant day for the Israeli gas market. These are the first contracts for gas supplies from the Karish and Tanin fields signed with the Dalia group, the largest private power producer in Israel. The agreement is a substantial step towards bringing competition and cheaper energy to the market for the benefit of Israeli consumers and the country’s economy. Energean is in talks regarding further contracts with other potential customers in the market and is aiming to submit a Field Development Plan for the Karish and Tanin project in the next few weeks.”

Dalia Power Energies Company CEO, Mr. Eitan Meir added: “Dalia and Or Energy are working to expand the volume of production offered by them while continuing to reduce the price of electricity. We are pleased to sign the agreement that expands the gas sources and the ability of the companies to offer their customers electricity at a competitive price. Competition in all segments of the electricity sector will serve the public and the Israeli economy.”

Dalia Power Energies Ltd. was established in 2005 with the aim of building and operating a private power plant that would provide cheaper electricity than Israel Electric Corporation, while encouraging and developing competition in the electricity sector. The Dalia power plant was set up at Tzafit in accordance with government policy and on the understanding that cooperation between private power producers and promotion of competition in the Israeli electricity sector are essential. The plant is based on combined-cycle technology and operates using a steam turbine and a gas turbine with an overall output of approximately 900MW, with maximum energy efficiency of 58%. Dalia is a major player in the Israeli electricity market and accounts for about 7% of the country’s electricity production capacity.

Energean Israel is the operator of, and holds a 100% interest in, both the Karish and Tanin licenses, acquired from Delek Group in December 2016, for an upfront consideration of $40m as well as $108.5m in contingent payments. The fields contain at least 2.4 TCF of gas contingent resources, as reported by the NSAI, and will be developed through a Floating Production Storage and Offloading (FPSO) vessel, the first to be installed and operated in the East Mediterranean. The gas produced from the fields will supply Israel’s growing domestic gas market, with first gas expected in 2020. Kerogen Capital has agreed to invest an initial US$50 million in Energean Israel. Kerogen’s investment is subject to approval by the Israeli Government, after which Kerogen will own a 50% interest in Energean Israel with Energean holding the balance.

Energean is a leading independent E&P company focused on the Eastern Mediterranean region where it holdsnine 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 480 oil and gas professionals.

Energean has reserves of 2.4 TCF of natural gas (2C) at the Karish and Tanin fields, offshore Israel as well as 41 million barrels (2P) in the Prinos License, offshore North-Eastern Greece.

The company has planned to submit to the Israeli Government an FDP for the Karish and Tanin fields by mid-2017, aiming to use an FPSO and produce gas in 2020.

The company is pursuing an ongoing investment and development program to increase production from the Prinos and North Prinos Oil Fields and develop the Epsilon Oil Field. The company has secured a 25-year exploitation license for the West Katakolo offshore block in Western Greece with first oil expected in 2019/20, which will represent the first production of oil or gas in the west of 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.

Kerogen Capital is an independent private equity fund manager specializing in the international oil and gas sector. Kerogen Capital was established in 2007 and manages approximately US$2 billion across its funds.

Its investors comprise a range of blue-chip institutions including endowment funds, foundations, pension plans, fund of funds, international corporations and family offices. The team at Kerogen Capital comprises highly experienced investment professionals, in-house technical and operations expertise and a world class Executive Board. Kerogen Capital seeks to support and assist its portfolio companies in delivering the full potential of their assets. Energean Israel represents Kerogen Capital’s first investment in the Eastern Mediterranean hydrocarbon province.

 

 

East Med pipeline will meet all prerequisites, Canete supports

European governments and the Israeli administration today pledged full support for the development of the East Med project, designed to transmit natural gas along a route stretching from Israel to Europe.

An objective has been set for the pipeline infrastructure project to be ready by 2025. The East Med project is planned to measure some 2,000 km and connect Israeli and Cypriot natural gas deposits with Greece and possibly Italy. The project’s budget could reach as much as 6 billion euros.

“This is an ambitious project that is clearly supported by the European Commission as it carries tremendous value with regards to supply security and the objective for diversification,” noted the European Commissioner for Climate Action and Energy Miguel Arias Canete.

Following a meeting with the energy ministers of Israel, Cyprus, Greece and Italy, Canete told reporters he believes the East Med project will meet all prerequisites to enable financial commitment.

Israel’s energy minister Yuval Steinitz noted that the pipeline project could be ready by 2025. “But we will try to speed up and shorten this timeline,” Steinitz informed. Asked about Israel’s energy plans, Steinitz responded: “I will develop both pipelines,” referring to East Med and an Israeli-Turkish pipeline.

Elio Ruggeri, CEO of IGI Poseidon, the owner of the East Med project, told Reuters that, according to the current budget, the project is estimated to cost 5 billion euros to reach Greece’s gas network and 6 billion euros to reach the Italian system.

IGI Poseidon is a joint venture formed by DEPA, Greece’s Public Gas Corporation, and Italian energy group Edison.

The energy ministers of all East Med project participants said they plan to meet in Cyprus six months from now to discuss the pipeline’s further development.

 

 

 

 

Greek-Israeli-US naval exercise in area of major energy interest

A trilateral naval exercise between the Greek, Israeli and American navies, dubbed Noble Dina, is planned to begin later this month with nearly a dozen surface ships, submarines and related air assets to engage in joint reconnaissance, counterterror and antisubmarine warfare training.

The exercise will be staged in an area that has produced major hydrocarbon discoveries in recent times and already led to major investments. Two major energy infrastructure projects of Greek interest, the East Med gas pipeline, to link Greece, Israel and Cyprus all the way to the Italian coast, and the Eurasia Interconnector, planned to link the Greek, Cypriot and Israeli power grids, will be developed in a wider area to serve as part of the arena for the upcoming naval exercise.

Cyprus will participate as an observer in the three-way drill, which is staged annually. It begins in Greece and will conclude in mid-April at the Israeli Navy headquarters in Haifa.

“It’s one of our most important exercises that allows us to hone our proficiencies in very complex scenarios,” Commander Assaf Boneh, the head of international cooperation for the Israeli sea service, told Defense News. “We’ll be training in a vast area from Greece to Israel, and this gives us a lot of room to practice multiple scenarios that require jointness.”

Kerogen Capital invests in Energean Israel for Karish and Tanin gas fields

Kerogen Capital has committed to invest an initial US$50 million in Energean Israel, a subsidiary of Energean Oil & Gas, ahead of the planned $1.3 billion development of the Karish and Tanin gas fields, offshore Israel, Energean announced in a statement released today.

Energean Israel is the operator of and holds a 100% interest in each of the Karish and Tanin licences, acquired from Delek Group in December 2016, for an upfront consideration of $40mm as well as $108.5mm in contingent payments.

Proceeds from Kerogen’s investment in Energean Israel will finance the acquisition and key workstreams including FEED studies and the Field Development Plan currently being prepared in cooperation with TechnipFMC.

The fields contain at least 2.4 Tcf of Gas contingent resources (NSAI report), and will be developed through a Floating Production, Storage and Offloading (FPSO) unit, the  first to be installed and operated in the East Mediterranean. The gas produced from the fields will supply Israel’s growing domestic gas market, with first gas expected in 2020.

Kerogen’s investment is subject to approval by the Israeli government, after which Kerogen will own a 50% interest in Energean Israel with Energean holding the balance. It is intended that Roy Franklin OBE, Kerogen Executive Board Member, will become Non Executive Chairman of Energean Israel.

Energean Group Chairman & CEO, Mr. Mathios Rigas, commented: “We are delighted to welcome Kerogen to the Karish and Tanin project, planned to deliver gas to a rapidly growing market in 2020 for the benefit of Israeli domestic consumers and the economy. Energean has already commenced negotiations with potential gas consumers in Israel and is progressing rapidly the Field Development Plan that we expect to submit to the Israeli Government by May, 2017 with an intention to FID the project by year end 2017. 

“We believe Israel is an attractive destination for energy investment offering exciting growth opportunities through the development of Karish and Tanin, as well as through the additional exploration potential in offshore Israel, all of which are underpinned by a supportive government policy and favorable financing environment.”

Roy Franklin, Kerogen Executive Board Member, commented: “Energean’s track record speaks for itself. The company has successfully redeveloped the Prinos complex in Greece, increasing reserves and production substantially. Kerogen intends to collaborate with Energean to deliver a successful development of the Karish and Tanin fields in Israel.

“This investment provides Kerogen with exposure to a large-scale, low break-even discovered gas resource located within an OECD country, which, as a near-term development, can benefit from today’s deflationary cost environment.”

 

 

‘Realism, win-win approach key for gas developments, exports’

Realism, a gradual and more practical approach are needed in order to ensure that natural gas exports from the East Mediterranean may commence, Israeli gas expert Gina Cohen, in the Greek capital for last week’s Athens Energy Forum, told energypress in an interview.

The Israeli energy authority believes that export activity concerning the region’s natural gas may begin on a regional basis, to surrounding countries, where trading can be conducted more competitively. Mrs. Cohen also pointed out that Greece and Cyprus will potentially need to begin with smaller-scale plans before moving ahead with the development of more ambitious gas transmission projects, failing which they may lose out on all fronts.

  • Last year, two major developments took place in Israel’s natural gas market. Firstly, the Greek company Energean Oil & Gas entered Israel’s Exclusive Economic Zone (EEZ) by acquiring licenses for the Karish and Tanin natural gas offshore fields and, secondly, the Israeli government announced a new international tender for re-opening the sea for exploration. Are you optimistic about the prospects of this tender or do you think that the government should have waited until a final investment decision was taken on the Leviathan deposit?

When staging a tender, it is important to select the appropriate time, blocks and number of blocks offered. I believe that this was not the right time because one needs to have previously identified one’s markets and, in addition, natural gas prices are currently low, while there is an oversupply, internationally. In addition, I think that the Ministry in Israel should have first completed matters of greater importance locally such as providing small field incentives, developing the transmission and distribution infrastructure and ensuring that there is sufficient demand in the local market to enable to develop those gas fields that have already been discovered (Leviathan, Tanin and Karish). Israeli officials may have decided that this was the right time to go ahead because Cyprus, Egypt and Lebanon had proceeded with respective tenders of their own. Israeli officials may have feared being left behind. Also, the tender’s staging also offers a case with regards to the liberalization of the domestic market, otherwise how could there be complaints of an oligopolistic market. However, the purpose of the tender will be defeated if it proves to be unsuccessful. We shall see in March, when it is completed.

  • As for Cyprus, do you believe natural gas export developments can be expected prior to the completion of new drilling ventures that will result from the third licensing round?

What should have taken place long ago is for the island to supply itself with natural gas. This would have offered multiple benefits, both economically and geopolitically. If natural gas discovered is a good enough product and fuel to be exported, then it is also surely appropriate for the domestic market. Therefore, it is not important as to when Cypriot exports will begin because the natural gas must first reach Cyprus. In my opinion, exports will not begin before the drilling efforts of the third licensing round. The fact that Cyprus is an island is forcing authorities to wait. The natural gas amounts are too modest for supply as LNG to Europe or the Far East and market prices are currently too low. If, in the future, authorities determine that greater gas amounts are possessed, then a better decision can be taken.  The Aphrodite partners have long ago offered to do a one well development and a small 12-inch pipeline to bring gas to the Island, but the government of Cyprus refused, wanting to wait for a more grandiose LNG export option.

  • Given the current environment and prevailing prices, is it possible for East Mediterranean natural gas to become internationally competitive?

Natural gas can be feasible for regional use. In Israel, it is cheaper than all other energy sources. Also, gas export activity to Turkey, where demand exists, is certainly feasible as Turkey has no indigenous reserves and has often had to pay excessively high gas prices. Egypt possesses great amounts of natural gas but also needs a lot of gas and is in fact still importing 10 bcm a year. Exporting natural gas to this market would be viable, as this country pays 5.8 dollars per mmbtu to purchase gas from its local suppliers and a higher price for its LNG imports. However, issues do exist, such as a 3.5 billion-dollar debt owed by the country to energy corporations. The other problem is that Egypt has announced it will become self-sufficient, in terms of energy needs, by 2020, so such statements cause misunderstanding, especially as I somehow doubt they will achieve this and so they should clearly leave all options open.

Egypt’s LNG terminals possess an annual capacity to export 17 billion cubic meters, but export activity, either from Cyprus or Israel, needs to be sustainable. Seventy percent of the world’s natural gas is traded regionally. Egypt is located 450 km from Cyprus whilst Turkey is only 100 km away from the Island, which increases gas transmission costs, in the former case, as well as its liquefaction, so Cyprus should certainly keep in mind the Turkish export option.

  • In your opinion, what is the optimal way to export Israel’s natural gas?

Egypt and Turkey are the two options. Contrary to Cyprus, Israel is located roughly midway between Egypt and Turkey. So both options are on the agenda, sometimes one becomes more prominent than the other. If the Egyptians settle their debt issue, Egypt would become an ideal preferable option, as it would mostly entail dealing with strong credit worthy international entities such as Shell. When BG controlled the liquefaction facilities in Egypt, the possibility of exporting from Israel was easier, whereas now that this company has been acquired by Shell, the prospect has become a little more difficult as Shell has a more extensive presence in many Arab countries. Things have now become easier in Turkey following the improvement in bilateral ties with Israel. Turkey also experienced a very harsh winter and realized that it lacked gas to supply for both heating purposes and for electricity generation. However, the conditions concerning both options are constantly changing. Israel’s relations with Turkey and Egypt are very important for Israel. Ultimately, one of the two options will be carried out. I believe that Cyprus will need to consider Turkey as an option, even though Cyprus has declared that it does not want to do so at present.

  • How do you assess the situation concerning Greece’s hydrocarbon prospects?

Greece will need to base its efforts on its own companies, such as Energean, or companies with a presence in the region, such as Repsol, in order to carry out drilling ventures. LNG is also important and the country already possesses one LNG terminal. I was surprised to find out that the Greek islands are not interconnected with the Greek mainland’s electricity network. The prospect of transmitting electricity from Israel and Cyprus to Greece and Europe is widely discussed but the Greek islands have yet to be interconnected. Start with smaller, more realistic plans, such as the interconnection of the Greek islands, the mobilization of local corporate groups, such as Energean, or the upgrade of the country’s natural gas network so that gas can be transmitted bidirectionally from and to Bulgaria for example. Greece should examine the prospect of upgrading the transmission of natural gas from Turkey via Greece (a 7 bcm a year pipeline already exists but needs better compression and higher capacity), as new natural gas sources will be added along this axis in the near future, hopefully including also East Med gas going into Turkey. Greece should, for now, leave aside overambitious plans such as the East Med offshore pipeline and focus on more immediate and achievable projects.

 

 

 

 

Greek, Cypriot, Israeli common climate change action discussed

Greek, Cypriot and Israeli officials making up a working group on climate change, a front being tackled by all three countries in unison, will convene today for a meeting at the Greek energy ministry.

As part of a strategic decision made by all three countries, Greece, Cyprus and Israel are coordinating their efforts and taking joint action in various fields, including climate change, prompting three-way meetings on a regular basis.

Approximately twelve climate change experts, as well as officials and representatives of the three countries are expected to take part in today’s working group.

The framework concerning common climate change action being taken by the three countries is detailed in a joint declaration of intent for environmental issues, signed last April by the energy ministers of Greece, Cyprus and Israel.

Issues to be addressed at today’s meeting include assessements of where the three countries stand in terms of respective knowhow on climate change adjustment planning, while the establishment of a prospective central observatory to monitor climate change and administer adjustments will also be discussed.

Subjects to be discussed at forthcoming meetings include defining specific fields of cooperation and establishing water resource impact models.

Greece, Cyprus and Israel decided to stage today’s meeting last December during a three-way meeting in Israel involving the environment ministers of all three countries.

 

Energean to look for partners, funds, buyers for Israeli output

The Petroleum Council of Israel’s endorsement of Energean Oil & Gas’s acquisition of two significant offshore natural gas fields, Karish and Tanin, from Delek Drilling and Avner, a decision announced yesterday, paves the way for the internationally oriented Greek oil and gas exploration company’s next moves, expected to move along three fronts.

Energean will seek to establish partnerships for its Israeli natural gas fields with major companies active in such projects on an international scale. It will also begin a quest to raise financing needed for the project’s development. Energean will also look to establish gas supply deals with possible buyers in the Israeli market. However, the prospects here could be limited as supply deals have already been established by Israel’s market leader.

Energean’s search for partners and financing will be aided by the current market conditions, including the slight increase of crude oil prices, expected to bolster the overall interest of investors.

Energean acquired 100% of the Karish and Tanin natural gas fields for 148 million dollars as well as a percentage of exploitation revenues. The fields are estimated to possess a production capacity of up to 2.4 trillion cubic feet of natural gas. Light crude reserves measuring 25 million barrels and located approximately 1,600 meters deep, within Israel’s Exclusive Economic Zone (EEZ), have also been detected.

As noted yesterday by Mathios Rigas, CEO of Energean, Energean’s investment program for hydrocarbon exploration and production in Greece, Egypt, Montenegro and Israel over the next five years reaches 1.3 billion dollars.

 

Israeli council OK’s Energean’s Karish and Tanin gas field acquisitions

The Petroleum Council of Israel has announced its approval of the acquisition of 100% of the Karish and Tanin Natural Gas Fields by Energean Oil & Gas from Delek Drilling and Avner.

The transaction, estimated to be valued at $148m, is being implemented as part of the Israeli Government’s Gas Framework Strategy.

The Karish and Tanin Fields, discovered in 2013 and 2011 respectively, have 2C gas resources of circa 2.4TCF.

Energean will now proceed towards completion of the transaction, and within six months will submit to the Israeli authorities a Field Development Plan (FDP) for both fields. The company intends to start producing gas from the fields in 2020. The development of Karish and Tanin is expected to involve an investment of circa $1bn over the next few years.

Commenting on the approval, Mathios Rigas, CEO of Energean, said: “We are delighted to have received the approval of the Israeli Government on this transaction and for their swift consideration of the matter. The acquisition of Karish and Tanin and their development is a significant step for Energean, but it is also a big milestone for Israel in developing its gas strategy, by bringing competition in the local market. Energean is committed to delivering a mutually beneficial and successful development and gas sales program as partners with the Israeli Government.”

“Karish and Tanin will supply the Israeli domestic market for many years and we are eager to press ahead with its development as soon as possible. We will be submitting a comprehensive Field Development Plan within six months of closing the transaction, and will be selecting our proposed contracting partners in the near future. We will also be starting negotiations with potential gas users and are confident that we can deliver competitive gas prices and services for the Israeli consumers.”

The Karish and Tanin FDP is the third FDP that Energean is committed to over the next few years with development programs being prepared for the Epsilon (North Aegean Sea) and West Katakolon (Western Greece/Ionian Sea) with combined 2P reserves of circa 25 million barrels. Katakolon was approved to move into development by the Greek Government in late November.

Energean has additional exploration acreage in western Greece, Montenegro and Egypt. The company anticipates an investment of around $1.3billion in exploration and development (including Karish and Tanin) over the next 5 years.

DEPA’s East Med pipeline plan receiving Israeli, US support

The development prospects of the East Med underwater natural gas pipeline being promoted by DEPA, the Public Gas Corporation, as a plan to trasnsmit gas from the east Mediterranean to European market, are being propelled by Israeli and US support.

Commenting about a forthnight ago, Israel’s national infrastructure, energy and water resources minister Yuval Steinitz noted the project could serve as a main natural gas supply channel if the current signs of substantial deposits in areas controlled by Egypt, Cyprus and Israel are proven.

The recent establishment of talks between DEPA and US oil company Noble Energy, which led to the signing of a memorandum of cooperation in June, reflects the US interest in the development of the underwater project, a key part of energy relations linking Greece, Cyprus and Israel.

Noble Energy is the biggest company active in the development and exploitation of deposits in the east Mediterranean. The US energy company holds stakes in an offshore block within Cyprus’s Exclusive Economic Zone (EEZ) as well as a major Israeli-conttrolled block, Leviathan.

The developing ties between DEPA and Noble Energy have been propelled by encouraging results produced by two different studies conducted on the pipeline’s technical and financial sustainability.

Until recently, Noble Energy had maintained a reserved stance on the plan to construct an underwater gas pipeline, preferring LNG solutions instead for the export of gas from the Cypriot and Israeli deposits. The US company now appears more open to alternatives.

Greek, Cypriot and Israeli officials are scheduled to meet during the current month in Athens, at the European Commission’s local headquarters, to examine the results of preliminary technical and economic studies conducted on the East Med pipeline. Participants will seek to pave the way for more advanced talks at a summit meeting in Israel this December to involve the energy ministers of Greece, Cyprus and Israel, as well as the European Commissioner for Climate Action and Energy Miguel, Arias Canete.

 

 

Energean buys Tanin, Karish deposits from Israel’s Delek

Energean Oil & Gas, the international oil and gas exploration and production company focused on the Mediterranean and North Africa, has agreed to purchase two offshore natural gas deposits from Anver Oil and Gas and Delek Drilling, both members of Israel’s Delek Group.

The deal, which includes future exploitation rights, is worth 148.5 million dollars, of which 40 million dollars will be paid in cash and the other 108.5 million dollars in ten installments over the next year.

The acquisition represents the first sign of Greek presence on the region’s development map for major natural gas deposits discovered in recent years within Israeli and Cypriot territory, and, more recently, Egypt (Zohr deposit).

Expected to gradually fully cover national needs, these deposits will also serve other major Mediterranean and European markets, establishing a new energy map in the wider region.

In a company announcement, Energean described the move as one that sets new conditions in the wider region’s entrepreneurial and geopolitical map.

The two natural gas deposits, Tanin and Karish, were discovered in 2011 and 2013, respectively, in the Levantine Sea, close to the Tamar deposit, already producing natural gas, as well as the Leviathan deposit, whose development is imminent.

The Tanin deposit has a capacity of 1.4 trillion cubic feet (TCF), while the capacity for Karish is estimated at one TCF.

“Energean, based on today’s agreement, yet again proves that it is ready to lead the hydrocarbon sector’s development not only in Greece but the wider region as well, thereby contributing to the upgrade of our country’s geopolitical role through wider energy-sector collaboration amid the Greece-Cyprus-Israel triangle and with Egypt, a country where our company is already present with exploratory activity,” noted Mathios Rigas, Chairman and CEO at Energean Oil & Gas.

The agreement comes at a time of increased business activity in the southeast Mediterranean region. Just weeks ago, numerous energy companies, including majors, emerged for a new international tender staged by Cyprus.

Energean’s agreement with the Delek Group companies now needs to be endorsed by Israeli authorities.

 

 

Natural gas at the core of upcoming Greek, Cypriot, Israeli talks

Energy matters, along with other entrepreneurial interests, will top the agenda of upcoming talks between Prime Minister Alexis Tsipras and Israeli officials in Israel.

The Greek leader, to be joined by a delegation of ten ministers, will be in Israel this Wednesday to take part in the 2nd High Council on Cooperation, during which a Greek-Israeli declaration on energy cooperation, a precursor to a finalized agreement, is expected to be signed by the two sides.

A three-way summit involving Greece, Israel, and Cyprus is scheduled to follow in Nicosia. Here, the leaders and officials of the three neighboring countries will discuss energy matters concerning the prospective submarine Eurasia Interconnector, to carry electricity, as well as another project plan concerning the transportation of natural gas from deposits in the eastern Mediterranean.

A number of alternatives are available for the regional natural gas plan, including an LNG solution, either through a terminal in Cyprus or utilization of exisiting infrastructure in Egypt. Also, an additional option entailing the development of a submarine gas pipeline to link Greece and Cyprus, a solution proposed by Greece, is also possible.

The talks planned for the next few days come following moves towards reconciliation between Israel and Turkey, made just prior to the festive season. Natural gas is high on the agenda for both countries, which are expected to examine the prospect of developing a pipeline to carry Israeli gas to Turkey. However, Cyprus and Israel have agreed that such a project, involving Turkey, can only be developed if endorsed by Cyprus.