Gas Sales Agreements to supply an additional 0.4 Bcm/yr of gas in Israel - ENERGEAN OIL & GAS

London, 17 December 2020

Energean plc (LSE: ENOG, TASE: אנאג (is pleased to announce that Energean Israel Limited (Energean 70%) has entered into a new set of agreements and amendments to existing agreements with Rapac Energy Limited and its related companies to supply an additional amount averaging 0.4 Bcm/yr of gas for terms of between 6 and 15 years commencing from first gas from the Karish gas development project. The agreements include take-or-pay, exclusivity and floor pricing provisions.

Energean Israel Limited now has gas sales agreements in place to supply approximately 7.4 Bcm/yr of gas on plateau. All contracts contain provisions for take-or-pay and / or exclusivity, and floor pricing, ensuring that Energean’s revenue stream in Israel is secured, predictable and largely insulated from global commodity price fluctuations, supporting Energean’s target to begin paying a dividend following first gas from the 8 Bcm/yr Karish project, which is currently expected in Q4 2021.

Noble Energy announces execution of gas sales agreements for export of gas to Egypt - WORLD OIL

FEB/19/2018

HOUSTON -- Noble Energy, Inc., has announced that it has signed agreements to sell significant quantities of natural gas from Leviathan and Tamar fields to Dolphinus Holdings Limited to supply gas in Egypt. These agreements, one for natural gas from Leviathan and one for Tamar, each provide for total contract quantities of 1.15 Tcf of natural gas. The natural gas is anticipated to supply industrial and petrochemical customers, as well as future power generation in Egypt.

Sales volumes under the agreement associated with Leviathan field are anticipated to begin at a firm rate of approximately 350 MMcfd at the startup of the Leviathan project at the end of 2019. For the Tamar agreement, sales volumes are anticipated to begin at an interruptible rate of up to 350 MMcfd, dependent upon gas availability beyond existing customer obligations in Israel and Jordan. Noble Energy will have an option to convert the Tamar interruptible quantity to a firm-basis with a significant take or pay commitment. Both contracts are for a 10-year term.

Gas supply changes in Turkey - NATURAL GAS WORLD / THE OXFORD INSTITUTE FOR ENERGY STUDIES

Jan 10, 2018 11:59:pmOIES | Gulmira Rzayeva

SUMMARY

The Turkish government is in the process of making significant structural changes in the country’s energy sector in attempts to lessen its dependence on current import and transmission infrastructure capacity which is constrained and cannot meet gas demand in peak periods.

The Turkish government is in the process of making significant structural changes in the country’s energy sector in attempts to lessen its dependence on current import and transmission infrastructure capacity which is constrained and cannot meet gas demand in peak periods. It intends to diversify supply sources and gas import types (both pipeline gas and LNG/FSRU) to ensure imports are available from a wider range of available sources on competitive terms, at the same time storing more gas in the country once downstream infrastructure capacity allows, to export the excess of gas in the future.

 Consequently, BOTAŞ expects its maximum daily gas supply capacity to almost double by 2023, from the current 252 mcm/d (including storage capacity) to 473 mcm/d as new projects come on stream. This will extend Turkey’s ability to import gas from various sources by eliminating technical constraints. By doing so, Turkey intends to ensure supply security during the peak demand seasons and to reduce its dependence on existing suppliers, allowing it room to manoeuvre between them and other new options. 

Turkey is also expanding capacity at its existing LNG receiving terminals and building new FSRUs, taking advantage of the fact that this method of importing natural gas is available in a flexible and near immediate manner. This will give BOTAŞ and private companies an advantage in meeting the growing demand in winter time, instead of having to increase annual pipeline contract quantities (ACQ) due to the application of “take or pay” clauses.

Greece’s Energean inks deals to supply Israeli gas to Dalia and Or - NEW EUROPE

May 31, 2017 09:00
New Europe Online/KG

Dalia and Or will purchase part of their gas requirements from Karish-Tanin to operate the Dalia power plant as well as future power plants to be built by Or

Greece’s Energean Oil & Gas announced on May 30 that its subsidiary Energean Israel has signed with Dalia Power Energies and its sister company – Or Power Energies, two agreements for the supply of natural gas from the Karish and Tanin fields, offshore Israel.

Dalia and Or will purchase part of their gas requirements from Karish-Tanin to operate the Dalia power plant, the largest private power station in Tzafit, south-central Israel, as well as future power plants to be built by Or, Energean said.

Greece's Energean Offers to Sell Gas to Israel Electric Corp. at a Discount - HAARETZ

Energean CEO Mathios Rigas. Credit Ofer Vaknin

Feb 13, 2017 12:04 AMAvi Bar-Eli 

Greek company proposes bargain rate to secure key contract for its Karish and Tanin fields in Israel, which it purchased last year.

Energean Oil & Gas, the Greek company that bought Israel’s Karish and Tanin offshore natural-gas fields last year, has offered to sell natural gas to Israel Electric Corporation for around 25% less than IEC is currently paying, beginning in 2021, TheMarker has learned.

The offer is for the sale of about 1 billion cubic meters a year more than IEC is already contracted to buy from the Tamar field. That field is controlled by Noble Energy, Delek Group and Isramco.

The price would be from $4.50 to $4.60 per million British thermal units, compared to the $6 IEC will likely have to pay in 2021 based on the formula in the 2012 contract it signed with the Tamar partners, TheMarker has learned.

IEC buys Dalia gas more cheaply than Tamar - GLOBES

24 Jan, 2017 14:12
Nati Yefet

The Electric Corporation will save $1.34 million on its fuel costs.

Sources inform "Globes" that Israel Electric Corporation (IEC) (TASE: ELEC.B22) board of directors last Thursday approved a deal to buy surplus natural gas from Dalia Energies, owner of the Dalia power station, for 50 days at a price that will save the company at least $1 million. While IEC buys gas from the Tamar reservoir at $5.80 per mmbtu, it will pay less than $5 for the gas from Dalia. Dalia, the largest power station in Israel, has a 900 megawatt capacity, enabling it to supply 7% of Israel's electricity.

The IEC decision followed the start of a two-month shutdown of one of Dalia's two turbines earlier this month, shortly after the other turbine ended a two-month shutdown. As reported to "Globes," each turbine generates NIS 32 million a month in revenue, meaning that the four-month shutdown of one turbine will reduce Dalia's revenue by nearly NIS 130 million. Adding several million dollars for repairing each turbine brings the projected damage suffered by Dalia to NIS 150 million. A malfunctioning turbine is not a rare event; IEC combined cycle turbines are shut down an average of 29 days.

Engagement in a Non-Binding LOI for the Supply of Natural Gas from the Leviathan Project to Edeltech Ltd. - DELEK GROUP

Tel Aviv, January 17, 2017.

Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) provides below an Immediate Report published by each of Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership ("the Partnerships") with regard to an engagement in a non-binding LOI for the supply of natural gas from the Leviathan project to Edeltech Ltd.

Further to the provisions of Section 7.14.1 of the Partnerships’ periodic report as of December 31, 2015, as released on March 28, 2016 (the “Periodic Report”) regarding the conduct of negotiations of the partners in the Leviathan project including the Partnerships (the “Leviathan Partners”) for the marketing of natural gas and condensate to potential offtakers in the domestic economy, the Partnerships hereby respectfully announce as follows:

Update on Israeli natural gas industry - ENGINEER LIVE

11th January 2017

Israeli natural gas industry – where do we go now?

Partners Shiri Shaham and Simon Weintraub at Israeli law firm Yigal Arnon & Co. explore the natural gas industry in Israel

After years of deliberations, negotiations and amendments, the Israeli government recently adopted its final framework for the regulation of the burgeoning natural gas sector. This exciting development is a reflection of the country’s vibrant democracy, strong rule of law and climate of regulatory certainty; it will hopefully foster geopolitical stability in the eastern Mediterranean basin, and will potentially promote economic co-development projects and unprecedented investment opportunities in the region.

Noble Energy executes Leviathan gas sales contract with the National Electric Power Company of Jordan - NOBLE ENERGY

September 26, 2016

Houston, Sept. 26, 2016 (GLOBE NEWSWIRE) -- Noble Energy, Inc. (NYSE: NBL) ("Noble Energy" or "the Company") today announced the execution of a gas sales and purchase agreement (GSPA) to supply natural gas from the Leviathan field to the National Electric Power Company Ltd. (NEPCO) ofJordan for consumption in power production facilities. Under terms of the GSPA, Noble Energy and the Leviathan partners will supply a gross quantity of approximately 1.6 trillion cubic feet (Tcf) of natural gas from the Leviathan field, or 300 million cubic feet per day (MMcf/d) over a 15-year term. The buyer has an option to purchase an incremental 50 MMcf/d for a total of up to 350 MMcf/d.

Natural gas supplied under this agreement will include industry-typical take-or-pay commitments, with pricing linked to Brent oil and a firm floor price. Gross contract revenues are estimated to be approximately $10 billion.

Erdogan’s Delusions of Energy Grandeur: Why Turkey Will Not Achieve “Energy Hub” Status - HIPPO READS / HUFFINGTON POST

Constantinos Papalucas

With Erdogan’s democratic countercoup enforcing temporary order and the recent rapprochement with Russia and Israel, Turkey’s expected next step is to focus on its long-standing aspiration: to become a regional energy hub in the Eastern Mediterranean (East-Med). The US-Turkey negotiations for the conditional use of Incirlik Airbase by NATO forces, ongoing since 2003, and the recent EU-Turkey deal on migration have both reaffirmed that Erdogan’s Turkey would not miss an opportunity to extract political rents from the West and monetize its geographic monopoly with morally ambiguous political demands. Erdogan’s interpretation of a Turkish energy hub, coupled with Western inertia, has even allowed Islamic State to “enjoy Turkish money for oil for a very, very long period of time.” [1] But is a Turkish energy hub a realistic target that would help the West diversify its energy imports, or is it just another Trojan horse amplifying Western dependency on countries that use energy as a weapon?

Turkey can’t replace Russian gas with Qatari LNG - ASIA TIMES NEWS

The world's biggest Liquefied Natural Gas tanker Duhail
crosses the Suez Canal in thei file photo

BY SALMAN RAFI on APRIL 1, 2016

Turkey made a smart move in December 2015 when it signed a Memorandum of Understanding (MoU) with Qatar to replace Russian gas with liquefied natural gas (LNG) from that Gulf country.

By showing Russia it can find alternative sources of gas supply, Turkey probably hoped to extract some concessions with regard to the role of Kurds in the future of Syria.

While Turkey inked the LNG deal to serve its own interests, Russia was taking some positive steps. In March, the Russian military began its partial pull-out from Syria. In another surprise move, Russia lifted the ban on flights to Antalya, a resort destination in Turkey popular with Russian tourists.

Turkey hopes to catch up with Azeri gas by 2017: REPORT

January 13th, 2016

Turkish state importer Botas hopes to receive more gas from the Shah Deniz Phase 1 project by the end of 2017 to compensate for lower intake in the past, Zaman newspaper reported on January 12.

Botas pays before delivery from the Shah Deniz consortium, set at 6.6bn m³/yr. Over the past years, Azerbaijan has exported less than this volume owing to a lack of pipeline capacity inside Turkey. A gas compressor station was only installed in Erzurum in 2014.

The report says that the terms of the take or pay clause mean the total debt due to Azerbaijan for gas that Botas did not take – but had agreed to – was TL205.6mn lira ($114.9mn) as of the end of 2012 and TL687 million by the the end of 2013. This had risen further to TL892.9mn by the end of 2014.

The report added that Botas has until 2017 to even out its contractual offtake with its actual offtake.

In the first 11 months of last year Azerbaijan exported 6bn m³ of Shah Deniz gas, about 1.6% more than in the same period in 2014, operator BP told Natural Gas Europe December 25. The year before, exports from the field were 6.5bn m³.

The minimum annual volume of gas, which Turkey has to buy as a part of the agreement, is 5.2bn m³. Turkey has to pay $45/’000m³ for the gas it was contracted to take delivery of, but could not do so owing to the lack of capacity.

SOURCE

Israel Electric Faces $800 Million Tamar Contract Loss | Natural Gas Europe

December 07th, 2015t

ISRAEL ELECTRIC FACES $800 MILLION TAMAR CONTRACT LOSS

Israel Electric Corp. (ICE) will have to pay $800 million to the Tamar Partnerships for natural gas it will not use, according to the corporation's latest filing with the Tel-Aviv Stock Exchange (TASE).  

In 2012, IEC signed a Take-or-Pay (ToP) 15-year contract with Tamar Partnerships for the years 2013-2028 for a purchase of 90 bcm natural gas.

In the filing, ICE estimates that the quantity of natural gas it will consume in the coming years will be smaller than its purchase obligation under the contract.

Therefore, in the years 2018-2019, IEC said it expects to pay $400 million and until to 2023 another $400 million for natural gas it will not consume, an expenditure that will not be covered by revenues. IEC said that it will try to sell the gas in the secondary market but if it fails it will ask raising electricity tariffs to cover those expenses.

Under normal circumstances, IEC would have to report a loss of $800 million due to its estimation error. However, Tamar Partnerships helped it to avoid such a grim outcome. In a letter from November 19, Tamar Partnerships said it will be ready to supply IEC with natural gas beyond the contract end-date in 2028. IEC will have to pay for the natural gas supply years before actual consumption, a situation that will probably create difficulties in cash flow.

The surplus issue has been known for two years and last year, in order to mitigate the situation, IEC was allowed by the regulator to sell 1 bcm of gas on the secondary market. Recently it was allowed to sell 4 bcm untill 2020, priced at 12% above the purchase price.

In a response, IEC said that according to an agreement reached with Tamar Partnerships, the company's exposure was significantly reduced and raising electricity tariffs is a solution of last resort, which currently seems unlikely.

Tamar Partnerships main partners are Noble Energy (36%, the operator), Delek Group (31.25%), Isramco (28.75%) and Alon (4%).

Ya'acov Zalel

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