Energean has pushed back the expected start of operations at its Karish project, offshore Israel, owing to delays in Singapore, while also approving more Karish North work.
The company has reported that the authorities have reintroduced enhanced COVID-19 restrictions in Singapore.
Work on Karish was 90% complete as of the end of March and 90.6% as of the end of April. Energean had expected to deliver first gas in the first quarter of 2022.
The company has now said that it is focused on optimising the revised timetable. It is considering around 30 improvements, it said. These may have an impact on the schedule.
Yard woes
The floating production, storage and offloading (FPSO) vessel in a Singaporean yard is now expected to leave in the first quarter of 2022.
“Due to the ongoing impact of COVID-19 in Singapore, we are prudently updating our guidance for Karish first gas to reflect revised forecasts from our EPCiC contractor, TechnipFMC; but we continue to work together to improve the timetable,” said Energean CEO Mathios Rigas.
“Although unfortunate, the revised timetable should not have a material impact on the 15+ year secured revenue stream of our Israeli gas business.”
There has been no significant impact on subsea and onshore work in Israel. The subsea work is 82.3% complete while the onshore work is 97.7% complete.
The FPSO was 95.6% complete as of the end of April. Energean said this was the “critical path item” to achieving first gas at Karish.
The Energean Power FPSO is at the Admiralty Yard, in Singapore. The country has imposed new restrictions on the movement of people.
The yard is facing difficulties in mobilising its workforce. There was a shutdown at the facility from April 22 to April 27, after the discovery of COVID-19 case. Owing to related shutdown and restart work, this led to an “extended period of reduced manpower”.
More workers should become available in the coming weeks as other projects in the yard progress.
Karish North
Energean also reported a final investment decision (FID) on two projects in Israel, with a second oil train and a second gas sales riser.
It expects both projects to come onstream in summer 2023. Capital expenditure on these will be around $110 million, with the oil train costing $70mn and the gas riser $40mn.
The second oil train will be used to handle production from the KM-03 development well, on Karish Main. This equipment will increase liquids handling capacity on the FPSO to 32,000 barrels per day, from 18,000 bpd.
The second gas riser will increase FPSO capacity to 8 billion cubic metres per year, from 6.5 bcm per year currently. Energean has sales commitments of 7.4 bcm per year.
The company is also preparing to sign a rig contract for five wells. The first, on the 20 bcm Athena prospect, is expected to spud in the first quarter of 2022. If the well is successful, Energean could opt to begin development work on Block 12 without the need for any further exploration drilling.
The second well will be a first Karish North development well. The third will be on the Karish Main block, potentially following up an oil rim found in KM-03.
The last two drilling slots are optional.