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development plans
Energean took the final investment decision (FID) in early 2018 on a $1.6bn eld develop- ment plan approved by Tel Aviv the previous year.
In a results statement in March, the company con rmed that the rst well of a four-well 2019 drilling campaign had been spudded at the Kar- ish North prospect a week earlier. In doing so, it took up one of seven optional wells included in a contract with the UK’s Stena Drilling. e exploration well is directly targeting 37 bcm of gas and 16.4mn barrels of liquids, and is also hoped to have a positive read-through into the Karish East prospect.
Gross prospective resources at Karish East are estimated at 14 bcm and 7.5mn barrels of liquids. e drilling has been budgeted at $25mn and is due to take 45 days.
Karish North is located only 5.4 km from the planned location of the FPSO unit due to be installed at the eld. Commercialisation of any discovery would thus potentially provide a cost-e ective means of delivering additional gas to that envisaged coming from so-called Karish Main. A er Karish North, the Stena drillship will move to drill three development wells at Karish Main, the core of the company’s plans.
Pipeline timeline
Energean CEO Mathios rigas has been quickly lling the company’s project pipeline since it acquired Karish and Tanin as it seeks to monetise the assets swi ly.
Output from Karish will deliver the 4.2 bcm of gas that has already been rmly contracted by Energean under sales and purchase agreements (SPAs) starting in 2021.
The FPSO will have capacity to process 8 bcm per year of gas, and alongside e orts to tap upstream resources beyond Karish Main, Ener- gean is also seeking new supply commitments to absorb 3.4 bcm of spare capacity. e company’s rst SPA, which was signed in May 2017 with the local Or Power Energies, includes an option for a further 0.7 bcm per year in addition to the vol- umes rmly contracted.
e most recent SPA, signed in January with IPM Beer Tuvia for 0.4 bcm, is due to come into force by 2024. Elaborating on the develop- ment plans in the results statement, Energean explained that reservoir sections and comple- tions would be batch-drilled to cut costs and that the “required production” was expected to be met by only two of the wells.
Meanwhile, a timeline was outlined for completion and installation of the newbuild FPSO. e facility was ordered last year from Singapore’s Sembcorp Marine by the EPCIC contractor on the overall project, UK-based TechnipFMC.
e hull, which was outsourced to Chinese yard COSCO, is due to set sail for Singapore in the fourth quarter and topsides integration will then start in early 2020. Completion and saila- way for Israel is anticipated by the end of 2020 in time for rst gas in the rst quarter of 2021.
In late June, Energean agreed a $102mn deal to acquire the onshore and near-shore sections of the 90-km pipeline that will feed gas from the FPSO into the Israeli network from Israel Natu- ral Gas Lines (INGL). e handover of the assets will follow production of rst gas at Karish.
e Greek rm is betting big on the East Med and the latest deal is a sign that it is committing itself for the long run.™
Energean’s estimated trajectory for the company post the acquisition of the Edison assets.
Week 27 09•July•2019 w w w . N E W S B A S E . c o m
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