Energean has begun producing gas at Karish North, the company said, while also celebrating the signing of an additional gas sale and purchase agreement.
Karish North began producing on February 22. The company has hooked the Karish North well up to its second gas export riser, which was installed in December.
There are now four producing wells tied in to the Energean Power FPSO.
“Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production,” said Energean CEO Mathios Rigas. “This provides us operational flexibility and enables us to utilise the FPSO’s maximum gas capacity.”
Energean did not provide an update on the proposed second oil train, which reached final investment decision (FID) in 2021. Security woes – linked to the war in Gaza – have delayed Energean’s progress on this installation.
The company signed the new sales agreement with Eshkol Energies Generation, which is majority owned by Dalia Energy. This controls the largest privately owned power plant in Israel, Eshkol.
Under the agreement, Energean will supply initial volumes of 0.6 billion cubic metres per year. This will increase to 1 bcm per year from 2032 onwards. The deal will run for 15 years, with a total capacity of 12 bcm.
Energean said it will now supply gas to all four privatised power plants, with the addition of the Eshkol deal. The agreement, it said, would bring “competition and security of supply to the Israeli market”. The deal is worth around $2 billion over its lifetime.
“The new contract with Eshkol is a further testament to the trust in Energean from the Israeli electricity producers”, said Rigos. It is “in line with our strategy to secure long-term reliable cash flows from long-term gas contracts”.
Mediterranean expansion
Energean next expects to begin producing at a gas project in Italy with Eni. Cassiopea is due to begin producing in the summer. It will provide the Israeli company with around 10,000 barrels of oil equivalent per day net to its 40% stake.
Earlier this month, Energean signed a memorandum of understanding (MoU) with Shell Egypt to co-operate on decarbonisation. Energean said it would use its carbon capture and storage (CCS) experience, gained at Prinos, to work on capturing emissions from the Idku LNG plant.
CO2 from the liquefaction facility could go to Energean’s Abu Qir concession, into a depleted reservoir.