Energean’s FPSO hull nearly ready to sail away from China

Oil and gas company Energean expects to see its hull for the Energean Power FPSO sail away from China to Singapore in the coming weeks. The first gas from the Karish project, located offshore Israel, is on track to be delivered in the first half of 2021. 

The FPSO keel-laying took place at the COSCO Yard, Zhoushan, China, in April 2019 and in October 2019 the hull was undocked and floated out from COSCO Shipyard’s dry dock.

The hull was previously expected to sail away from China in late 2019. However, the sailaway date was in January 2020 postponed for the end of March this year. Come February and the spread of the coronavirus in China, Energean still remained sure it would stay on track to deliver first gas in 1H 2021 despite potential delays over coronavirus.

In an update on Thursday, Energean confirmed it is on track to deliver the first gas from its Karish project in 1H 2021. As of December 31, 2019, physical progress on the project was approximately 72% complete, the drilling of the three Karish Main development wells had been completed and significant progress had been made on the hull and topsides of the Energean Power FPSO.

The FPSO Hull is expected to sail away from China in the coming weeks and arrive in the Admiralty Yard in Singapore shortly thereafter.

Good progress has been made on the construction of the topsides in Singapore, and Energean is working with TechnipFMC to mitigate the impact of the deferred sailaway from China on Practical Completion of the project, the company said.

The hull is expected to sail away from Singapore to Israel around YE 2020.

Mathios Rigas, Chief Executive Officer, Energean Oil & Gas commented: “In the coming weeks, you will see our FPSO hull sail away from China to Singapore, a key milestone in the delivery of first gas from Karish, which is on track for 1H 2021.

“During 2019 we completed the drilling of the three development wells of Karish, confirmed excellent productivity rates from the wells and made a new discovery (Karish North) in Israel that we intend to develop in 2021. We continued to gain market share in Israel securing additional long-term gas contracts and bringing us closer to our target to maximize capacity utilization of our FPSO.

Capex cuts

When it comes to actions the company is taking as a response to the current market volatility, Energean reduced its 2020 capex guidance by $155 million.

Rogas said: “The COVID-19 pandemic and OPEC+ price war have put us into uncertain times, but we are well-placed to weather the challenges. Once the Edison E&P transaction is completed, around 70% of our production will be sold under long-term gas sales agreements that insulate our future revenues against oil price volatility.

“Following completion of the Edison E&P transaction, we will continue to own and operate the majority of our asset base, and are well-funded for all of our projects. This will ensure that we can respond quickly and appropriately to the macro environment and take the right decisions to protect our business and our shareholders, as demonstrated by the $155 million cut to our 2020 capex guidance.”

The completion of Edison E&P transaction is expected during 2020.

Rigas also added: “The crisis finds Energean well prepared with full discretion on our non-Israeli capex program and a very strong balance sheet further strengthened only recently by a further $175 million committed funding for our Karish project, demonstrating the strength of our banking relationships and the commitment of our lenders to the project.”

Offshore Energy Today Staff

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