First steel for Karish/Tanin FPSO by year-end

Energean has issued a progress report on its Karish/Tanin gas project in the eastern Mediterranean Sea, offshore Israel.

Offshore staff

ATHENS, GreeceEnergean has issued a progress report on its Karish/Tanin gas project in the eastern Mediterranean Sea, offshore Israel.

The company and its partner sanctioned the 2.4-tcf development via a newbuild FPSO and subsea wells in March, with first gas scheduled for 1Q 2021.

To date, Energean has contracted gas sales in the Israeli sector of 4.2 bcm/yr, with average contract durations of 16 years, leaving 3.8 bcm/yr of spare capacity in the 8-bcm/yr FPSO for monetization of future discoveries. Over the next 18 months, the company aims to fill this capacity.

It has also offered sales of 0.5 to 0.8 bcm/yr to Cyprus via a pipeline that could be installed by the early 2020s.

Under a turnkey, lump-sum EPCIC contractTechnipFMC is providing the full FPSO and SURF services during the construction phase. Energean believes this arrangement is critical to risk mitigation and that by minimizing contractor interfaces, project management will be simplified.

TechnipFMC has subcontracted COSCO to provide the FPSO hull, which will be built at the fabricator’s yard in Zhoushan, China, with first steel due to be cut by year-end. The FPSO is based on an existing design and will be secured offshore by a spread-moored system.

Construction of the hull should take 12 months, after which it will travel to theSembcorp Admiralty Yard in Singapore for installation of the Siemens-built topsides. The completed FPSO should depart Singapore in late 2020.

Stena and Halliburton will provide drilling services, and Wood Group operations and maintenance services once production has started.

TheKarish North prospect in the Karish lease is due to be drilled before the end of March 2019, subject to approvals. In the event of a success case, the well should to take 45 days to drill at a cost of $25 million.

It would then be completed as a potential producer for tieback to the Karish FPSO in the future.

NSAI’s competent persons report last month estimated that Karish North contains 1.3 tcf recoverable. If proven these additional volumes could allow Energean to delay Tanin development, replacing $700 million of capex currently planned for 2024-2025 with tieback costs of only $100 million.

Following the Karish North commitment, the company has six remaining slots in the Stena drilling contract.

09/18/2018

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