Important developments related to Israeli gas in preparation for increasing exports to Egypt - Energy

The British company, Energean, announced a new discovery related to Israeli gas, which reinforces its interest in the potential of the eastern Mediterranean.

Preliminary analysis indicates that the Athens exploration well contains recoverable gas volumes of 8 billion cubic metres, well below the company’s previous estimate of 21 billion cubic metres.

The company explained that the Athena well – which is the fifth in a row that Energen has successfully drilled in Israel – is located in Block 12, between the Karish and Tanin fields, at a water depth of 1769 meters.

Operations were carried out by the Stena ISMEX drillship over a period of 51 days, at a cost of $35 million less than the budget, according to a press release issued by the British company.

The importance of discovering new Israeli gas

Energean emphasized that the discovery of new Israeli gas is particularly important, as it removes the risk of an additional 50 billion cubic meters of average non-vulnerable potential resources across Energean’s Olympus area, which is estimated at 58 billion cubic meters.

“We are pleased to announce the new gas discovery in Athens and the potential of the wider Olympus region,” says Energean CEO Mateos Rigas.

“We are studying a range of strategic marketing options for the independent and broader development of the Olympus region, including multiple domestic export routes,” he added.

He also stressed that “this discovery and the removal of risks on a larger scale for a number of prospects in the Olympus region reaffirms the role of the eastern Mediterranean, as a global hotspot for gas exploration.”

“It reinforces our commitment to providing competition and security of supply to the region, allows for the improvement of our portfolio in Israel, and achieves one of our key milestones for 2022,” he concluded.

Israeli gas
Floating production and offloading vessel – Image via Energy

Israeli gas marketing

The Athens well can be marketed in the short term by connecting it to the floating production and storage vessel, which Energean plans to use to send gas to the Israeli market from the Karish field in the third quarter of this year.

Energen is seeking multiple marketing options for the discovery of Athens and the potential development of the wider Olympus region, including local customers and export routes.

These options include sales of Israeli gas domestically, through new gas sale and purchase agreements backed by the continued growth of the Israeli energy market, or through immediate sale through the agreement it signed with the Israel Electric Corporation in March.

The company is also studying export options by developing the memorandum of understanding signed with the Egyptian Natural Gas Holding Company (EGAS); To supply up to 3 billion cubic meters annually into a binding agreement.

The Memorandum of Understanding was signed in December 2021 for the sale and purchase of 3 billion cubic meters of natural gas annually for a period of 10 years, starting with initial volumes of up to 1 billion cubic meters annually.

The company is also looking into the possibility of exporting gas to other regional and European markets via pipelines, and liquefied natural gas through Cyprus and Egypt.

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