Private power producer Dorad has signed an agreement to purchase gas from the Karish and Tanin reservoirs belonging to Greek energy company Energean. The deal is worth billions of dollars. It covers the supply of six BCM over fourteen years, Dorad said.
The average price in the deal is $4 per million British thermal unit, about 20% lower than the price in purchase agreements from the Leviathan reservoir.
Energean bought the Karish and Tanin reservoirs as part of the terms of the gas agreement between the Israeli government and the owners of the Leviathan and Tamar reservoirs, Delek Group Ltd. (TASE: DLEKG) and Noble Energy, and is in competition with those reservoirs. The agreement with Dorad brings Energean closer to the critical mass that with enable it to obtain financial closing by the end of the year, which in turn will enable it to start developing the Karish and Tanin reservoirs and have the gas flowing by 2020, in accordance with the development agreement it signed in August with Israel's Ministry of National Infrastructures, Energy and Water Resources.
Energean Oil and Gas chairman and CEO Mathios Rigas has said in the past that the condition for developing the reservoirs is obtaining sale agreements of at least 3 BCM annually. The company has already signed agreements and memoranda of understanding on the sale of more than this amount.
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2017
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