The supply of gas from Karish is scheduled to begin in 2021, while production from Tanin will begin later.
The board of directors of Greek energy company Energean today approved a final investment decision (FID) for a $1.6 billion investment in development of the company's Karish and Tanin natural gas reservoirs, the company today notified the London Stock Exchange (LSE).
The supply of gas from the offshore Israeli fields is scheduled to begin in early 2021. Development of Karish will include placing a gas pipeline from the reservoir through Israel's natural gas transportation system. Development of Tanin, which is scheduled later, will include the drilling of a six wells that will be connected to a floating production storage and offloading (FPSO) platform.
Energean raises $460m in London IPO to develop Israeli gas fields
Israeli investment institutions also took part in Energean's IPO in London. The leading purchaser from Israel was Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), which spent $100 million on the offering, and is accordingly likely to become a party at interest in Energean with a 10% stake. Other investment institutions taking part included Psagot Investment House Ltd., Meitav Dash Investments Ltd. (TASE:MTDS), and Sphera Fund.
Competition with Leviathan and Tamar
Energean, which acquired the Karish and Tanin reservoirs following approval of Israel's gas plan, is competing with the Leviathan and Tamar gas reservoirs, controlled by Delek Group Ltd. (TASE: DLEKG) and Noble Energy. The average price in the deals signed in recent months is about $4 per BTU, 20% lower.
Energean last week raised $460 million in an IPO on the LSE. The company previously signed a $1.275 billion financing deal with a consortium of four Israeli and international banks: Bank Hapoalim (TASE: POLI), Morgan Stanley, Societe Generale, and Natixis. The senior partner in the consortium, Bank Hapoalim, will invest $375 million, and the three foreign banks will invest $300 million each.
Energean recently announced that it had enough signed contracts to start the financial closure process and announce an FID, which it in fact did today. The company has signed contracts with private electricity producers to supply 61 BCM of gas over a period of 16 years, at an annual rate of approximately 4.2 BCM per year (on an ACQ basis).