As a result, IEC will now have the right to purchase natural gas from Energean’s fields. The agreement comes following the connection of the Energean-operated Karish gas field to the Israel National Gas Line (INGL), an important milestone in facilitating the operational readiness of the field development located offshore Israel.
Announcing the agreement with IEC on Monday, Energean said the gas price would be determined in each period, with purchased amounts determined on a daily basis. Starting upon the commencement of the first gas production from Karish, the agreement will be valid for an initial one-year period with an option to extend subject to ratification by both parties.
According to Energean, this is the first agreement of its kind for the company and represents a significant step in the development of the company’s position in the Israeli gas market. The agreement will optimise Energean’s gas sales portfolio and ensure full utilization of its FPSO capacity.
IEC CEO, Ofer Bloch, commented, “IEC continues to aim to diversify its gas procurement sources, while seeking and finding the lowest and most competitive prices for the benefit of the public.”
Energean CEO, Mathios Rigas, added: “We are pleased to have contracted with IEC – the largest natural gas consumer in Israel. This is another significant in Energean’s involvement within Israeli’s energy economy.
“Alongside the first gas production from Karish, expected in Q3 2022, we will continue to expand the natural gas reserves of Israel and the Eastern Mediterranean. Our operations benefit Israel and Israelis in multiple ways, providing both energy security and a new level of market competition; avoiding the potential downside of monopoly supply.”
As Rigas stated, Energean is on track to deliver the first gas from the Karish offshore field by 3Q 2022. The project’s vessel, Energean Power FPSO, is expected to be ready for sail-away from Singapore by the end of the first quarter. From sail-away to first gas, Energean expects 4-5 months, including tow, hook-up and commissioning.