Greek firm Energean Oil & Gas has entered a memorandum of understanding (MoU) with Israel Natural Gas Lines (INGL) for the transfer of nearshore and onshore infrastructure.
Under the MoU, INGL will receive the title of the nearshore and onshore part of the infrastructure that will carry gas from the Karish and Tanin floating production storage and offloading (FPSO) unit into the Israeli national gas transmission grid.
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The FPSO unit is located offshore Israel and has been installed to develop Energean’s 100%-owned Karish and Tanin leases.
Energean will receive $98m as consideration for the transaction. The company noted that the detailed agreement is likely to be signed by the parties in the first quarter of next year.
INGL is required to pay around 15% of the total consideration early next year and a further 80% at handover.
The remaining 5% will be paid following an 18-month warranty period.
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By GlobalDataThe transfer is intended to become effective shortly after the Karish field delivers the first gas to the Israeli market in the first quarter of 2021.
Once the handover is complete, INGL will be responsible for the operation and maintenance of the onshore section of the Karish and Tanin infrastructure and the nearshore section of pipeline extending to around 10km offshore.
Energean Oil & Gas CEO Mathios Rigas said: “The open access system infrastructure being built by Energean will enable connection of future gas discoveries to the system, further contributing to Israel’s energy security and diversity of supply.
“Our collaboration with INGL demonstrates the Israeli Government’s support and commitment to the Karish Tanin project, from which natural gas will flow to the Israeli market from 1Q 2021.”
