First gas from Energean's Israeli fields could slip into H2 2021

London — First gas from Energean's fields offshore Israel could slip into the second half of 2021, according to a new timetable released June 8 for work on its dedicated gas production vessel.

UK-based Energean -- which last month dropped the Oil & Gas from its name -- had hoped to produce its first Israeli gas in the first half of 2021, but the work schedule for the 8 Bcm/year FPSO now suggests the project timeline could slip.

However, the company said it did not expect the revised timetable to have a material financial impact "due to the contracting structures it has in place with its main contractor and its gas buyers."

Energean is developing a cluster of gas fields offshore Israel, comprising the Karish, Tanin and Karish North fields.

The dedicated FPSO Energean Power -- which sailed away from its Chinese shipyard in April to the Sembcorp Marine Admiralty Yard in Singapore -- will sit above the Karish field.

Energean said the Singapore shipyard reopened on June 2 and preparation works for lifting of the topside modules of the FPSO have begun.

It said an application had been submitted to the Singapore Economic Development Board for the return of up to 529 workers for the Energean Power project. "The ramp-up of the workforce, currently expected over the course of June, will be dictated by the Singaporean authorities' ongoing evaluation of the situation," Energean said.

It added that the work program on the FPSO was contingent on the evolution of the global coronavirus pandemic and decisions of the Singapore authorities.

Work on the FPSO in Singapore is expected to take approximately ten months, while the FPSO tow to the Karish field and subsequent mooring, hook-up and commissioning of the FPSO is expected to take up to four months.

A 14-month work program would see first gas in around August 2021.

Energean has firm sales agreements for 5.6 Bcm/year of gas with Israeli buyers and hopes to secure more offtake deals to be able to fully utilize the FPSO's 8 Bcm/year capacity.

All of Energean's sales agreements from the Karish field contain take-or-pay and floor pricing provisions.

This, the company said, "reduces the risks on Energean's cash flow generation profile on the Karish project and limit Energean's exposure to global commodity price fluctuations."