Energean begins testing Karish gas pipeline

Karish floating rig credit: Energean
Karish floating rig credit: Energean

Despite threats from Hezbollah, testing procedures have commenced for the flow of gas between the Israeli shore and Karish.

The running-in process has begun for Israel's Karish offshore gas field. UK-Greek energy exploration and production company Energean plc (LSE: ENOG; TASE: ENOG), which has the rights to the field, has notified the Tel Aviv and London stock exchanges that following approval received from Israel's Ministry of National Infrastructures, Energy and Water Resources to start testing procedures, the flow of gas from onshore to the Karish floating, production, storage and offload (FPSO) rig has commenced.

The buy-back procedure, in which gas will flow from the shore along the underwater pipelines to the Karish field to test their operational capabilities, is an important step in the commissioning process of the field.

Approval from Israel's Ministry of National Infrastructures, Energy and Water Resources was delayed for two weeks to allow for the completion of negotiations with Lebanon over the maritime border. Hezbollah had threatened that the start of production, before an acceptable agreement was reached, might result in attacks on the rig.

"Globes" reported that Energean CEO Mathios Rigas and Israel's Ministry of Defense opposed any such postponement. But the political echelon prevented the Ministry of National Infrastructures, Energy and Water Resources from granting approval for the buy-back process to start.

But at the cabinet meeting last Thursday the issue was raised and the postponement aroused opposition from some ministers. Minister of Interior Ayelet Shaked described the delay as like cowering to a protection racket and in the end the cabinet agreed to let the buy-back process begin.

Already three weeks ago, Hezbollah secretary general Hassan Nasrallah withdrew his initial ultimatum and said that as far as he was concerned, an attack would only be warranted after the start of gas production from Karish and its transfer to the coast, and not the inspection process. He attributed this position to the clarifications he had received indirectly from Israel.

A Lebanese television channel reported that the Americans informed Lebanon yesterday about Israel's intention to start the buy-back commissioning process of the Karish rig, while stressing that it is not about to start the production itself.

The buy-back testing process should last a few days, and if no problems are discovered, it is technically possible to start producing and conveying the gas from Karish to the coast within a few weeks. However, it is not clear what a few weeks exactly means, since Energean is not ready to commit to a specific schedule due to the state's conduct on the matter. This flexible date will allow Prime Minister Yair Lapid and Defense Minister Benny Gantz to delay production while denying any connection to Hezbollah's threats.

Optimism on negotiations with Lebanon

At the same time, the negotiations with Lebanon continue. On Tuesday, Lebanon officially received from the Americans the Israeli refusal on its demands for changes in the agreement proposal submitted by US mediator Amos Hochstein. According to reports in the Lebanese media, there is a certain willingness to be flexible in the wording, and the atmosphere from the Lebanese leadership is positive.

According to another report in Lebanese newspaper "Al Akhbar," which is identified with Hezbollah, French President Emmanuel Macron sent a message to Lebanese Prime Minister Najib Mikati that despite the difficulties in the talks, Israel is not interested in any escalation.

An Israeli source stressed that the issue of compensation for the Qana/Sidon field has been resolved. In addition, the second issue of the semi-official recognition of the buoy border line is more complicated, but even there, through international formulations and guarantees, the dispute can be resolved. This means that the pessimistic atmosphere created during Israel's most recent cabinet meeting, may have been just a smoke screen for progress in the agreement.

According to Israel's Attorney General Gali Baharav-Miara, even if the cabinet approves the agreement with Lebanon, it must be discussed by the Knesset. This is a process that should last about two weeks, until just before Israel's elections on November 1.

Published by Globes, Israel business news - en.globes.co.il - on October 9, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Karish floating rig credit: Energean
Karish floating rig credit: Energean
Tel Aviv light rail Light rail fares in Israel jump 33.3%

Bus fares will also rise 33.3% after the 2025 budget is passed.

Quantum Machines founders credit: Eyal Izhar Israeli co Quantum Machines raises $170m

Sources say that the company's valuation, which before the latest round was $520 million, has now risen to $670 million.

Pay cuts illustration: Shutterstock Treasury plans pay cuts for doctors, teachers, and civil servants

The move is intended to ensure that the budget savings target of NIS 5 billion shekels in 2025 is achieved, as part of efforts to reduce the state budget deficit.

Shekel credit: Shutterstock Vladirina 32 Shekel weakens after BoI rate call

Poria Financial Planning chairman Or Poria: There is growing uncertainty over the collapse of the hostage deal, and the increasing probability of renewed fighting in the south.

Daniel Aronovitz credit: Joseph Laor Insight Partners: $6b and still investing in Israel

Insight Partners newly appointed Israel partner Daniel Aronovitz tells "Globes" about the US firms plans for Israel and reveals the huge extent of past investment.

Bank of Israel Governor Amir Yaron credit: Eyal Izhar, Tali Bogdansky BoI Governor: We hope for two rate cuts in second half

Bank of Israel Governor Prof. Amir Yaron tells "Globes" he remains concerned about inflation, higher demand than supply, and real estate balloon loans.

Bank of Israel Governor Prof. Amir Yaron credit: Yossi Cohen BoI keeps rate unchanged for ninth consecutive time

The Bank of Israel Monetary Committee reiterated: the interest rate path will be determined in accordance with the convergence of inflation to its target.

Supervisor of Banks Daniel Hahiashvili credit: Yossi Cohen Regulator opposes Israeli banks increasing dividends

Supervisor of Banks, Daniel Hahiashvili is reportedly reluctant to let banks increase their dividend distribution, from a ceiling of 40% of profits towards 50%.

Metro credit: Bar Lavi Metro dispute over station entrances to delay tenders

NTA believes stations only need one entrance while the Israel Planning Administration says several are necessary.

Declining tech industry pay  credit: Ussama Azam Unsplash Tech salaries in Israel falling with jobs harder to find

Despite inflation tech salaries are declining, the Central Bureau of Statistics reports.

Tel Aviv credit: Shutterstock New Tel Aviv master plan massively boosts building rights

The plan, set to be approved for deposit, adds 11.3 million square meters of housing, 6.1 million square meters of office space and allows construction of 80-floor buildings in certain places.

Israeli apartments Credit: Shutterstock Apartments sold and rented

A selection of recent real estate deals in Israel in Kfar Saba, Even Yehuda, Rishon Lezion, Hadera, Haifa and Tzfat.

Jerusalem's Midtown project credit: DBLD architects Foreign residents dominate Jerusalem city center housing market

Wealthy foreign residents are increasingly pricing residents out of the market in central neighborhoods, as ghost apartments haunt the city.

Egyptian tanks in Sinai near Rafah credit: Reuters Mohamed Abd El Ghany Egyptian military violations in Sinai concern Israel

President Donald Trump's relocation plan for Gazans is further straining fraught relations between Israel and Egypt. "Globes" examines whether it could spark a war.

Yitzhak Tshuva credit: Gidon Levy and Tali Bogdanovsky Isracard shareholders approve acquisition by Delek

For the deal to go through, approval is now needed from the Supervisor of Banks and the Israel Competition Authority.

Air Canada Photo: Shutterstock Air Canada to resume Israel flights in June

The Canadian airline will resume Toronto-Tel Aviv flights on June 8 and Montreal-Tel Aviv flights in August.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018