Oil and gas company Energean has brought the Karish North and second gas export riser online at the Karish field in the Mediterranean Sea, offshore Israel.
Karish North first gas was safely achieved on February 22, 2024, Energean informed. The Karish North production well is currently utilizing the second gas export riser, the installation of which was completed in December 2023.
The Energean Power FPSO, moored 80 kilometers west of Israel's coast, now has four production wells in operation, increasing well stock redundancy and flexibility to meet the demand requirements of Energean’s gas buyers.
According to Energean, the start of gas export from the Karish North enabled the utilization of the FPSO’s maximum gas capacity, which stands at 8 bcm/yr.
Energean started gas production at its Karish gas field in the Mediterranean Sea back in October 2022, with the initial capacity of up to 6.5 bcm/yr reached months later.
In addition to the Karish North milestone, Energean signed a new gas sale and purchase agreement (GSPA) with Eshkol Energies Generation, majority owned Dalia Energy Companies.
The agreement is for the supply of an initial 0.6 bcm/yr, from June 2024 to the end of 2031, rising to 1 bcm/yr from 2032 onwards.
Energean supplies gas to all four IEC power stations that have been privatized: Ramat Hovav, Alon Tavor, East Hagit and now Eshkol. This new contract is in line with Energean’s strategy to bring competition and security of supply to the Israeli market, and to secure long-term cash flows for its shareholders via its long-term gas contracts.
The GSPA is for a term of approximately 15 years, for a total contract quantity of up to approximately 12 bcm and represents circa $2 billion in revenues over the life of the contract.
The contract contains provisions regarding floor and ceiling pricing, take or pay and price indexation (not Brent-price linked). The GSPA has been signed at levels that are in line with the other large, long-term contracts within Energean's portfolio, the company said.
“Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production. This provides us operational flexibility and enables us to utilize the FPSO’s maximum gas capacity.
“The new contract with Eshkol is a further testament to the trust in Energean from the Israeli electricity producers, adds circa $2 billion of revenues over the life of the contract to our business, and is in line with our strategy to secure long-term reliable cash flows from long-term gas contracts,” said Mathios Rigas, Chief Executive of Energean.