ENERGY: Energean in $1 bln gas sales agreement with Israel’s MRC

Greece’s Energean has signed a $1 bln Gas Sales and Purchase Agreement with Israel’s MRC Alon Tavor for the sale of approximately 0.5 billion cubic metres of gas a year, or up to 8 bcm over 15 years.

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Supply will commence at Israel’s Karish first gas and the contract term is for a period of 15 years from the date of signature.

The GSPA is linked to the Israeli Electricity Production Index and has floor pricing and take-or-pay provisions. Energean estimates that the GSPA will add revenues in excess of $1 bln over the term of the contract.

The oil and gas producer, recently signed a contract amendment with OPC Rotem that accelerated the rate of gas consumption and increased annual gas supply by 0.2 bcm/yr.

This was accompanied by a shortening of the contract term such that there was no change in the total contract quantity of gas. 

Energean now has firm GSPAs for the supply of 5.0 Bcm/yr of gas into the Israeli domestic market, excluding the contingent GSPAs that have been signed with I.P.M Beer Tuvia (0.4 Bcm/yr) and Or Power Energies (“Or”) (0.7 Bcm/yr). 

It has nine exploration licences offshore Israel, and a 25-year exploitation licence for the Katakolo offshore block in Western Greece.

On 4 July 2019, Energean announced the conditional acquisition of Edison E&P for $750 mln plus $100 mln of contingent consideration.