Singapore yard prepares for topside works on Energean FPSO as workforce ramps up

Energean has informed that the work restarted on the Energean Power FPSO in the Admiralty Yard, Singapore, on 2 June 2020 and the subsea installation campaign offshore Israel is progressing as planned.

The FPSO hull, meant for the Karish and Tanin development offshore Israel, sailed away from the COSCO yard in China in early April and arrived in Singapore for topside integration works in mid-April.

However, due to a temporary halt of operations at the yard amid coronavirus pandemic restrictions, the integration works were postponed.

At first, the delay was expected to last for at least two weeks, but it lasted over a month and a half.

Energean said on Monday that, on 2 June 2020, the Sembcorp Marine Admiralty Yard, Singapore, reopened. Preparation works for the lifting of the topside modules of the Energean Power FPSO has started.

An application has been submitted to the Singapore Economic Development Board for the return of up to 529 workers for the Energean Power project.

The ramp-up of the workforce, currently expected over the course of June, will be dictated by the Singaporean authorities’ ongoing evaluation of the situation, Energean explained.

The forward work programme on the FPSO is contingent on the evolution of the global pandemic and decisions of the Singapore authorities.

Before any further effects of COVID-19, the key FPSO activities that are required to achieve first gas are topsides integration and commissioning activities in Singapore, which is expected to take approximately ten months; and then FPSO tow to the Karish field in Israel and subsequent mooring, hook-up and commissioning of the FPSO – expected to take up to four months.

Energean does not expect the revised timetable to have a material financial impact on the company due to the contracting structures that it has in place with its main contractor and its gas buyers.

The pipelay vessel Solitaire and construction support vessel Normand Cutter arrived offshore Israel in May 2020.

The near-and-onshore pipeline installation has now been completed and laying of the remaining 80km gas pipeline that will deliver gas from the Energean Power FPSO to Israel has now started.

Core installation using the Solitaire is expected to be completed by end-June 2020. The full pipeline installation and pre-commissioning programme is expected to be completed in 4Q 2020, well within the project schedule.

Installation of the subsea equipment at the Karish field is progressing in line with expectations. Installation of the manifold and subsea isolation valves is ongoing and is expected to be completed by end-June 2020.

Installation of the three sets of risers that will connect the three producing wells to the FPSO is expected to start in 4Q 2020 and to be completed in 1Q 2021.

Following a CPR of Karish North resource volumes, issued by Energean’s independent reserves auditor, Energean Israel has converted a further 0.6 bcm/yr of gas sales and purchase contracts (GSPAs) from contingent to firm.

Energean Israel’s firm GSPAs are now expected to deliver sold volumes of 5.6 bcm/yr on plateau, or approximately 75% of Energean’s independently verified resource base.

The CPR enables Energean to continue marketing its gas resources into the growing Israeli domestic market and regional export markets, with the aim to secure additional long-term cash flows and fulfil its goal of filling the 8 bcm/yr capacity of its FPSO.

All of Energean’s Karish GSPAs contain take-or-pay and floor pricing provisions, which reduce the risks on Energean’s cash flow generation profile on the Karish project and limit Energean’s exposure to global commodity price fluctuations.