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Energean to Receive $98M from Israel Natural Gas Lines

Source: 12/17/2018, Location: Middle East

According to a Memorandum of Understanding signed between Energean Israel and INGL, US$98 million will be paid to Energean in consideration for constructing and transferring to Israel Natural Gas Lines the onshore and near shore part of natural gas facilities in Israel for the Karish and Tanin development.

Mathios Rigas: “This is an important milestone – which demonstrates the support and commitment of the Israeli government to the Karish Tanin project”

Energean Oil and Gas plc, listed on both London and Tel Aviv Stock Exchange pleased to announced it has signed a Memorandum of Understanding (MOU) with Israel Natural Gas Lines (INGL) for the construction and transfer of the near shore and onshore part of the infrastructure that will deliver gas from the Karish and Tanin FPSO into the Israeli national gas transmission grid.

Energean will be paid 369 million Israeli New Shekels, approximately US$98 million, 15% of which is expected to contribute to the Company’s available liquidity between now and end 1Q 2019. Another 80% is expected to become available at handover of the infrastructure in 2021, with the remaining 5% due following an 18 month warranty period.

The MOU covers the onshore section of the Karish and Tanin infrastructure and the near shore section of pipeline extending to approximately 10km offshore. The hand over to INGL will occur shortly after the delivery of first gas from the Karish field in 1Q 2021. Following handover, INGL will be responsible for the operation and maintenance of this part of the infrastructure. Energean will not incur any charges or tariffs for use of this infrastructure. Energean expects the detailed agreement to be signed in 1Q 2019.

Minister of Energy, Dr. Yuval Steinitz: “This is an important step in the way to further development of small and mid-size gas fields, relying on the infrastructure built for INGL. It will encourage exploration and development of natural gas and contribute to Israel’s energy security in the future”.

CEO of Energean Oil & Gas plc, Mathios Rigas, said: “This is another important milestone for the Karish and Tanin development. The 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”.

Chairman of INGL, Eitan Padan: “This MOU, which was signed today following a whole year of intensive negotiations, will contribute to the development of INGL Marine transmission system project, ‘Maagarim’, and will enable Karish Tanin as well as other future fields to connect to INGL transmission grid, saving time and costs. With further adaptation, the system will be able to serve for Israeli gas export to future destinations as well”.

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