Energean Israel has announced the signing of a gas sale and purchase agreement (SPA) with Kesem Energy to supply gas to Kesem’s upcoming power plant.
The plant is expected to be operational before the end of the decade, with Energean Israel committed to supplying approximately one billion cubic metres (bcm) annually from the mid-2030s.
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The agreement represents significant revenues, with Energean Israel projecting more than $2bn (NIS7.37bn) from approximately 12.5bcm of contracted supply over the 17-year period.
Energean CEO Mathios Rigas said: “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. We have now secured around $20bn in contracted revenues over the next two decades.”
Prior to the full commencement, Energean will supply limited gas quantities intermittently.
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By GlobalDataThe contract includes provisions for floor pricing, take-or-pay terms and price indexation, which are not linked to Brent prices.
Energean has aligned this gas SPA with other long-term contracts in its portfolio.
“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,” Rigas added.
In a related development, Energean reached a $1.2bn final investment decision for the Katlan project in Israel in July last year.
This project, fully owned and operated by Energean, is scheduled to begin gas production in the first half of 2027.
The Israeli Government approved the Katlan development plan in December 2023. The initial phase is estimated to contain 229 million barrels of oil equivalent.
Discovered in 2022, the Katlan area will be developed in phases through a subsea tieback to the existing Energean Power floating storage and offloading unit.
