Greek oil producer Energean has exceeded its target for gas sales agreements needed before it goes ahead with plans to tap two gas fields offshore Israel, market sources said on Aug. 9.
Energean bought the deepwater Karish and Tanin fields in August 2016 for $148 million from U.S.-Israeli partners Delek Group and Noble Energy. It plans to lease its own FPSO vessel and build a separate pipeline to Israel at a cost of up to $1.5 billion.
Energean had targeted gas sales contracts of 3 billion cubic meters (Bcm) annually before making a final investment decision and has so far secured 4.6 Bcm a year, market sources said.
Israel Chemicals, Bazan Group Oil Refineries and OPC Energy signed agreements this week to buy 39 Bcm of gas from the Karish and Tanin fields over 15 years, or 2.6 Bcm annually.
Energean has secured another 0.8 Bcm per year from agreements with power producer Dorad and Rapac Communications and Infrastructure, and 1.2 Bcm annually from Dalia Power, which operates Israel’s largest private power station, sources said.
Most of the agreements are memorandums of understanding and the contracts have yet to be signed.
Energean is Greece’s only oil producer with an average production of 3,500 barrels per day last year. The Karish and Tanin fields are the company's biggest assets with combined gas reserves of an estimated 2.4 trillion cubic feet.
Production is expected to begin in 2020 and Energean has appointed Morgan Stanley as global financial coordinator on the project.