Energean and DEPA ink deal for 20 pct of EastMed pipeline’s initial capacity

Oil and gas company Energean and the Public Gas Corporation of Greece (DEPA) have agreed on the potential sale and purchase of natural gas from Energean’s fields offshore Israel thus paving the way for commercial operation of the EastMed pipeline. 

Ahead of the Intergovernmental Agreement on the EastMed Pipeline, signed on Thursday by the Ministers of Cyprus, Greece, and Israel responsible for Energy, Energean and DEPA on Thursday signed a Letter of Intent (LoI) for the potential sale and purchase of 2 BCM of natural gas per annum from Energean’s gas fields offshore Israel, where Energean is investing $1.7 billion for the development of the Karish & Tanin fields through the FPSO Energean Power.

DEPA, as a 50% shareholder of the “NATURAL GAS SUBMARINE INTERCONNECTOR GREECEITALY-POSEIDON S.A.” (IGI Poseidon) – a Joint Venture with Edison S.p.A – is developing the EU Project of Common Interest (PCI) EastMed Pipeline and is a player in natural gas supply and retail activities in the Greek and S. E European markets and in the development of major natural gas related infrastructure projects with the objective of enhancing the security and diversification of supply of Greece and the broader region.

Energean stated that additional details, including terms, delivery points, gas composition, the shipper of the EastMed pipeline etc. would also be agreed and detailed in the GSPA.

Konstantinos Xifaras, CEO of DEPA, stated: “With the agreement we have signed today – the first agreement for the commercial use of the EastMed pipeline – we are taking a decisive step for the project’s commercial viability and its realization. With the present LoI, DEPA expresses its intention to buy 2 BCM of gas, which corresponds to 20% of the EastMed’s initial capacity. Thus, a major producer of East Mediterranean gas (Energean) and a key distributor of gas in South East Europe (DEPA) are joining forces to ensure the success of the pipeline.

“DEPA is steadily expanding its international trade activities and is developing, along with international partners, infrastructure projects that guarantee diversification of energy sources and security of supply in both Greece and Europe. By systematically strengthening its international role, our company is becoming a key player in the energy developments of the wider region.”

Mathios Rigas, CEO of Energean, stated: “The agreement with DEPA is an important development in the context of the EastMed pipeline project, which now has not only the support of Governments and the EU but is also attracting commercial interest from buyers and sellers of gas in the region. The EastMed pipeline provides Energean with another monetization route for its strategy to fully utilize the Energean Power FPSO that has an 8 BCM/y capacity and further allows us to continue the exploration and development of our 9 licenses offshore Israel.

“We are very pleased to have signed the LOI with DEPA which is the first commercial agreement for the EastMed pipeline and look forward to further assisting the development of the project, which will substantially benefit the economies, the security of supply and the consumers of the Eastern Mediterranean and Europe.”

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