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02 Jan 2019 | 07:23

Energean Oil and Gas signs agreement to supply IPM with gas

Energean Oil and Gas signed an agreement with IPM Beer Tuvia to supply an estimated 5.5 BCM of gas from its Karish and Tanin FPSO over a period of 19 years.

The gas sales and purchase agreement would add between 0.265 and 0.38 BCM of gas sales, commencing in approximately 2024, and was estimated to increase Energean's revenues by approximately $0.9bn over the life of the contract.

The contract also included an option for Energean to supply IPM with limited volumes between 2021 and 2024, and also allowed IPM to increase volumes up to 0.55 BCM a year, the company said.

The gas to be provided by Energean would form part of the total quantity of gas required for IPM's new power plant due to start operating in the second half of 2020. The contract was subject to necessary approvals and contingent on results of the Energean's 2019 drilling programme, which included the drilling of four wells in Israel, commencing with the spud of Karish North in March 2019, targeting 36.8 BCM of gas with a volume weighted geological chance of success of 69%.

'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 commercialise the resource being targeted by our upcoming drilling programme, providing competition and energy security to the Israeli domestic market,' said Mathios Rigas, CEO of Energean Oil & Gas.

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