Energean Israel signs $1.2bn facility agreement to fund Karish project

6 March 2018 (Last Updated July 29th, 2020 13:07)

Energean Oil & Gas' subsidiary Energean Israel has signed a secured senior credit facility (the facility agreement) of up to $1.2bn with four international banks as mandated lead arrangers (MLAs) to finance the development of Karish, which is part of the company’s Karish and Tanin project.

Energean Oil & Gas’ subsidiary Energean Israel has signed a secured senior credit facility (the facility agreement) of up to $1.2bn with four international banks as mandated lead arrangers (MLAs) to finance the development of Karish, which is part of the company’s Karish and Tanin project.

The facility agreement, which is led by Morgan Stanley, Natixis, Bank Hapoalim and Societe Generale, will be the primary source of funding for the development of the Karish offshore gas field over the next three years.

First gas production at the Karish offshore gas field is expected in early 2021.

The deal also provides further momentum for Energean Israel to make a final investment decision (FID) on Karish and Tanin.

Energean Oil & Gas CEO Mathios Rigas said: “We are rapidly advancing the Karish and Tanin development by continually delivering on substantial project milestones.

“The participation of four international banks in the Facility Agreement is a strong vote of confidence in Energean’s flagship project. Long-term cash flow from Karish and Tanin has been secured through our previously signed gas supply agreements for approximately 4.2 billion cubic metres (bcm) per year with 12 established counterparties.”

Additionally, the company has also signed a $1.36bn contract with Technip FMC to build a floating production storage and offloading (FPSO) vessel with a production capacity of 8bcm per year.

“We are rapidly advancing the Karish and Tanin development by continually delivering on substantial project milestones.”

The FPSO will help Energean to take advantage of future production potential from its existing licences or adjacent fields to deliver gas to the growing regional market.

Rigas further added: “The company is in the process of raising the equity required to develop Karish and Tanin through a premium listing on the London Stock Exchange’s Main Market.

“At the same time, we are pressing ahead with the expansion programme of our existing production and development base in the Eastern Mediterranean, to deliver our next phase of growth.”

Energean is focused on the Eastern Mediterranean region, where it operates in offshore Israel, Greece, the Adriatic and Egypt.

With a total of 388 oil and gas professionals, the company is claimed to be the only oil and gas producer in Greece.

The company secured approval in August last year from the Israeli Government of the FDP for the Karish and Tanin fields.