Energean Signs Supply Deals for Offshore Israeli Gas

In two long-term deals worth approximately $2.5 billion, Energean plc, a Greece-based energy exploration and production firm, will supply Israeli power plants with natural gas from Israel’s Karish field in the Eastern Mediterranean. The gas is scheduled to reach the customers in the second half of 2021. Energean acquired the rights to work Karish and another Israeli offshore field, Tanin, in 2016. It said the Karish deals represent the supply of up to 1.4 billion cubic meters (bcm) annually. Though the price per heating unit was not announced, it is thought that it could be as low as $3.70-$3.80, some 40% below what the Israel ElectricCorporation is currently paying for gas from Tamar, another Israeli offshore field being operated by Noble Energy, which was forced by Israel’s government to relinquish control over Karish and Tanin due to potential antitrust issues. Noble, which will be taken over by Chevron toward the end of the year, is overseeing, together with affiliates, production at much larger offshore gas fields in Israel’s exclusive economic zone. Energean says that Karish’s total annual output is 8.0 bcm and therefore approaching capacity.