Energean Oil and Gas plc is pleased to announce that it has signed a Gas Sales and Purchase Agreement with I.P.M. Beer Tuvia Ltd. to supply an estimated 5.5 BCM of gas from its Karish and Tanin FPSO over a period of 19 years. The contract is subject to necessary approvals and is contingent on results of the 2019 drilling programme, which includes the drilling of four wells in Israel and commences with the spud of Karish North in March 2019, targeting 36.8 BCM of gas with a volume weighted geological chance of success of 69%.
The agreement adds between 0.265 and 0.38 BCM/yr of gas sales, commencing in approximately 2024. Energean estimates that the agreement will contribute revenues of approximately USD 0.9bn over the life of the contract. Energean may supply IPM with limited volumes between 2021 and 2024. IPM holds an option to increase volumes up to 0.55 BCM/yr.
Energean has now signed GSPAs for 4.6 BCM/yr from its Karish and Tanin FPSO, which is being built with a total capacity of 8 BCM/yr. Energean targets filling the remaining 3.4 BCM/yr of FPSO spare capacity in the medium term, which it believes will deliver attractive incremental economics.
IPM is an Independent Power Producer that will supply the national power grid and large private consumers with power. IPM is building a new power plant that and gas purchased from Energean will provide part of the total quantity of gas required for its operations.