Energean, a prominent gas-focused independent exploration and production company operating in the Mediterranean and UK North Sea, on Thursday announced that it has achieved the first gas from Karish North, utilising the second gas export riser that was successfully installed in December 2023.

According to the announcement, this accomplishment, which took place on February 22, 2024, allows the Floating Production Storage and Offloading (FPSO) vessel, Energean Power, to leverage its maximum gas capacity.

Mathios Rigas, Chief Executive of Energean, commented on the latest update, saying “Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production”.

“This provides us operational flexibility and enables us to utilise the FPSO’s maximum gas capacity,” he added.

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Energean’s gas findings in Israel

The company said that with four production wells now operational, Energean has improved redundancy and flexibility, allowing it to meet the evolving demand from its gas buyers.

In addition, the announcement noted that Energean Israel has signed a new Gas Sale and Purchase Agreement with Eshkol Energies Generation LTD, a majority-owned entity of Dalia Energy Companies Ltd.

The agreement covers the supply of an initial 0.6 billion cubic metres per year (bcm/yr), with plans to increase to 1 bcm/yr starting from 2032.

According to the company, the contract entails a duration of approximately 15 years, a total contract quantity of up to approximately 12 bcm, as well as a revenue estimate of approximately $2 billion over the contract’s timeline.

“The contract contains provisions regarding floor and ceiling pricing, take or pay and price indexation (not Brent-price linked),” the company said.

“The GSPA has been signed at levels that are in line with the other large, long-term contracts within Energean’s portfolio,” it added.

Rigas explained that “the new contract with Eshkol is a further testament to the trust in Energean from the Israeli electricity producers, adds circa $2 billion of revenues over the life of the contract to our business, and is in line with our strategy to secure long-term reliable cash flows from long-term gas contracts”.

It should be noted that according to an October 2023 article by Cypriot newspaper Phileleftheros, Energean has long expressed an interest in Cyprus’ energy landscape, dating back to 2014.

The newspaper, reporting on comments made by Energean Greece’s vice president Konstantinos Nikolaou at the 11th Energy Symposium, titled “Cyprus: Time for Energy Projects”, said that the company’s past attempts at participating in Cyprus’ energy market were unsuccessful.

Nikolaou said that at the time despite their interest in 2024, the government favoured major players over newcomers.

He also recounted the company’s efforts in 2017 to sell gas to Cyprus from Israeli reserves, only to face a preference for liquefied natural gas imports.

In 2019, he continued, although buyers expressed interest in Energean’s gas, the lack of a competitive market in Cyprus prevented any deals.

Moreover, Energean’s proposal to bring gas to Cyprus and liquefy it locally, made in collaboration with Vitol, also faced challenges and stalled.

In addition, Nicolaou expressed concerns about operating in a monopolistic market and called for solutions to foster competition and address protectionist practices.