A Hong Kong based private equity firm have thrown $50million behind the developer of a planned $1.3 billion project under the Mediterranean Sea.
Kerogen Capital has committed the funds to Energean Israel for the development of the Karish and Tanin gas fields off the coast of the Middle Eastern country.
Energean Israel is the operator and holds a 100 per cent interest in each of the leases.
The Greek firm acquired them from Delek Group in December 2016, for an upfront consideration of $40millionm as well as $108.5million in contingent payments.
Kerogen’s cash injection will be used to develop front end engineering and design (FEED) studies and a field development plan.
The plan is currently being prepared in cooperation with TechnipFMC.
The fields contain at least 2.4trillion cubic feet of gas contingent resources and will be developed through an FPSO that will be the first to be installed and operated in the East Mediterranean.
The gas produced from the fields will supply Israel’s growing domestic energy market, with the fields expected to come onstream in 2020.
Kerogen’s investment is subject to approval by the Israeli Government.
If approved, Kerogen will own a 50 per cent interest in Energean Israel with Energean holding the balance. I
It is intended that Roy Franklin OBE, Kerogen executive board member, will become non-executive chairman of Energean Israel.
Energean Group chairman and chief executive Mathios Rigas, said: “We are delighted to welcome Kerogen to the Karish and Tanin project, planned to deliver gas to a rapidly growing market in 2020 for the benefit of Israeli domestic consumers and the economy.
“Energean has already commenced negotiations with potential gas consumers in Israel and is progressing rapidly the field development plan that we expect to submit to the Israeli Government by May 2017 with an intention to have a final investment decision on the project by year end 2017.”
He added: “We believe Israel is an attractive destination for energy investment offering exciting growth opportunities through the development of Karish and Tanin, as well as through the additional exploration potential in offshore Israel, all of which are underpinned by a supportive government policy and favorable financing environment.”