Work recommences on Energean FPSO at Karish Gas Field

Energean announced that work recommenced on the subsea installation campaign offshore Israel on the border to Lebanon. ENERGEAN POWER FPSO On 2 June 2020, the Sembcorp Marine Admiralty Yard, Singapore, reopened as well. An application has been submitted to the Singapore Economic Development Board for the return of up to 529 workers for the Energean Power project. The ramp-up of the workforce, currently expected over the course of June, will be dictated by the Singaporean authorities’ ongoing evaluation of the situation. Before any further effects of COVID-19, the key FPSO activities that are required to achieve first gas are as follows:

· Topsides integration and commissioning activities in Singapore – expected to take approximately ten months; and then

· FPSO tow to the Karish field in Israel and subsequent mooring, hook-up and commissioning of the FPSO – expected to take up to four months.

SUBSEA

The pipelay vessel Solitaire and construction support vessel Normand Cutter arrived offshore Israel in May 2020. The near-and-onshore pipeline installation has now been completed and laying of the remaining 80km gas pipeline that will deliver gas from the Energean Power FPSO to Israel has now commenced. Core installation using the Solitaire is expected to be completed by end-June 2020. The full pipeline installation and pre-commissioning program is expected to be completed in 4Q 2020, well within the project schedule. Installation of the subsea equipment at the Karish field is progressing in line with expectations. Installation of the manifold and subsea isolation valves is ongoing and is expected to be completed by end-June 2020. Installation of the three sets of risers that will connect the three producing wells to the FPSO is expected to commence in 4Q 2020 and to be completed in 1Q 2021.

COMMERCIAL

Following a CPR of Karish North resource volumes, issued by Energean’s independent reserves auditor, Energean Israel has converted a further 0.6 bcm/yr of gas sales and purchase contracts (GSPAs) from contingent to firm. Energean Israel’s firm GSPAs are now expected to deliver sold volumes of 5.6 bcm/yr on plateau, or approximately 75% of Energean’s independently verified resource base. The CPR enables Energean to continue marketing its gas resources into the growing Israeli domestic market and regional export markets, with the aim to secure additional long-term cash flows and fulfil its goal of filling the 8 bcm/yr capacity of its FPSO. All of Energean’s Karish GSPAs contain take-or-pay and floor pricing provisions, which reduce the risks on Energean’s cash flow generation profile on the Karish project and limit Energean’s exposure to global commodity price fluctuations.