Energean’s brand-new gas deal bringing revenues of more than $2 billion

Energean Israel, a subsidiary of the UK-based oil and gas player Energean, has penned a multi-year gas sale and purchase agreement (GSPA) with Kesem Energy to supply natural gas to the latter’s new power plant under construction in Israel’s Rosh Ha’ayin within the Southern Levant region of the Middle East. This plant is anticipated to be operational before the end of the current decade.

While Energean‘s deal with Kesem revolves around the contracted supply of approximately 1 billion cubic meters of natural gas per year (bcm/yr) from around the middle of the 2030s until the end of the contract period, the firm will supply limited quantities of gas intermittently before this. The GSPA is said to represent over $2 billion in revenues and about 12.5 bcm in contracted supply over approximately 17 years.

Mathios Rigas, Chief Executive Officer of Energean, commented:“We are pleased to announce the signing of another new contract, this time with Kesem, whose new planned power plant demonstrates the robust and growing long-term demand for natural gas in Israel.

“Energean has been a major underwriter of both energy security and transition in Israel and the broader region. We are delighted to continue to meet the needs of Israeli clients and society. This contract also reflects our long-stated commitment to securing stable and reliable long-term cash flows.”

The company highlights that this contract comes with provisions regarding floor pricing, take or pay, and price indexation, not Brent-price linked. Energean is adamant that the deal has been signed at levels aligned with the other large, long-term contracts within its portfolio.

Rigas further added: “We have now secured around $20 billion in contracted revenues over the next two decades. Our strategy emphasises stability and resilience, evidenced by the fact that over 75% of our Group production contains floor pricing.

“This approach safeguards our operations and investments against global financial and commodity price volatility. It is and remains one of the core tenets of our strategy and investment thesis.”

The latest gas deal has been inked weeks after Energean terminated the sale of its asset portfolio in Egypt, Italy, and Croatia because of unobtained regulatory approvals within the agreed timeline.  

The London-based firm is also busy developing its assets in Israel, as confirmed by a final investment decision (FID) for an offshore phased development, covering a string of gas discoveries to be tied back to the Energean Power floating production, storage, and offloading (FPSO) vessel.