JERUSALEM Jan 11 Greek company Energean Oil &
Gas plans to build its own production system in the eastern
Mediterranean at a cost of up to $1.5 billion to tap two Israeli
offshore gas fields, the group's chief executive said on
Greece's only oil producer is also looking to bring a
financial partner into the project to develop the Tanin and
Karish fields which are situated in deep waters around 100
kilometres (62 miles) off Israel's coast and have combined gas
reserves estimated at 2.4 trillion cubic feet.
Energean bought Karish and Tanin last August for $148
million from U.S.-Israeli partners Delek Group and
Noble Energy, who are developing two much larger fields
nearby and were required by Israel to sell off other discoveries
in an effort to open up the sector to competition.
Rather than piggyback off that group's infrastructure, an
idea previously floated by some experts, Energean plans to lease
its own floating production, storage and offloading (FPSO)
vessel and build a separate pipeline to Israel.
"We are going to be a totally independent system," CEO
Mathios Rigas told Reuters, adding that a combination of local
and international banks will help finance the $1.3-$1.5 billion
Before making a final investment decision, which is expected
in December, the Israeli government must first approve the
development plan and Energean needs to secure sales contracts
for 3 billion cubic metres of gas per year, Rigas said.
Israel has determined that gas from Tanin and Karish must be
The Israeli fields are Energean's biggest assets and the
company is looking to lighten the load.
"In the next three to six months maximum we will bring in a
financial partner ... that will work with us to share the risk
and help us develop the project," Rigas said.
He expects gas production to begin in 2020.
(Reporting by Ari Rabinovitch; Editing by Greg Mahlich)