Greek energy exploration and production company Energean Oil & Gas plc (LSE: ENOG; TASE: ENOG) has announced that it is to receive $98 million from Israel Natural Gas Lines (INGL). According to a Memorandum of Understanding (MoU) signed between Energean Israel and INGL, $98 million will be paid to Energean in consideration for constructing and transferring to INGL, the onshore and near shore part of natural gas facilities in Israel for the Karish and Tanin gas fields.
Energean CEO Mathios Rigas: "This is an important milestone, which demonstrates the support and commitment of the Israeli government to the Karish-Tanin project"
15% of the amount will be paid and will contribute to the company’s available liquidity between now and end of the first quarter of 2019. Another 80% is expected to become available at handover of the infrastructure in 2021, with the remaining 5% due following an 18 month warranty period.
The MOU covers the onshore section of the Karish and Tanin infrastructure and the near shore section of pipeline extending to 10 kilometers offshore. The hand over to INGL will occur shortly after the delivery of first gas from the Karish field in the first quarter of 2021.
Following handover, INGL will be responsible for the operation and maintenance of this part of the infrastructure. Energean will not incur any charges or tariffs for use of this infrastructure. Energean expects the detailed agreement to be signed in the first quarter of 2019.
Israel's Minister of Energy Yuval Steinitz said, "This is an important step in the way to further development of small and mid-size gas fields, relying on the infrastructure built for INGL. It will encourage exploration and development of natural gas and contribute to Israel’s energy security in the future
INGL chairman Eitan Padan said, "This MOU, which was signed today following a whole year of intensive negotiations, will contribute to the development of INGL Marine transmission system project, ‘Maagarim’, and will enable Karish Tanin as well as other future fields to connect to INGL transmission grid, saving time and costs. With further adaptation, the system will be able to serve for Israeli gas export to future destinations as well."
Published by Globes, Israel business news - en.globes.co.il - on December 17, 2018
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