Greek company Energean has gained a third customer for its Karish natural gas reservoir in Israeli economic waters. Rapac Communication and Infrastructure Ltd. (TASE: RPAC) yesterday reported to the Tel Aviv Stock Exchange (TASE) that it had signed a memorandum of understanding for buying gas for 17 years from an undisclosed company. Gas industry sources today confirmed that the company involved was Energean, which is in the process of obtaining financing to develop the Karish natural gas field this year.
The Rapac-Energean deal is for the supply of gas to two power stations being built by Rapac in northern Israel. The two power stations, Alon Tavor and Ramat Gabriel, will each have a 73-megawatt capacity. Rapac's announcement to the TASE stated that the agreement was "based on a commitment for minimum annual consumption derived from an agreed volume of gas consumption, with stipulations for overconsumption and under-consumption."
Energean estimates that Karish and Tanin, its other gas reservoir in Israeli waters, contain 74 BCM of gas. The company has signed several deals to date, some of them optional. The first was in May with fellow subsidiaries Dalia Energies and Or Energies for the supply of 23 BCM over 15 years, assuming that Or Energies manages to build the power station that it is planning.
Last week, OPC Energy, Oil Refineries Ltd. (TASE:ORL), and Israel Chemicals (TASE: ICL: NYSE: ICL), all controlled by Idan Ofer, reported that they were close to an agreement with Energean for the purchase of 39 BCM of gas over 15-17 years. The three companies are negotiating jointly in order to take advantage of their economies of scale.
It is believed that Energean signed agreements around $4 per heating unit, compared with $4.70 per heating unit paid by private producers for gas from the Tamar reservoir.
Energean said in response that it "does not comment on commercial matters pertaining to the contracts before they are signed, and is continuing to takes steps to offer competitive prices to all the potential customers in the market."
Published by Globes [online], Israel Business News - www.globes-online.com - on July 19, 2017
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