Karish first condensate export started as planned
Israel’s first-ever stream of hydrocarbon liquid (condensate) exports has launched from Energean’s Karish development in the eastern Mediterranean, a landmark moment for a country once vulnerable to a lack of domestic energy supplies. The nation’s first overseas shipment was loaded from the Energean Power Floating Production Storage and Offloading (FPSO) unit. The cargo has been sold as part of a multi cargo marketing agreement with Vitol; the first of a new source of East Med energy to reach Europe.
Energean’s FPSO is part of a development that has been politically controversial because of its location on a once-disputed maritime border between Israeli and Lebanese waters. After years of indirect negotiations, a US-backed agreement was reached in October 2022 that demarcated a maritime border between the Karish gasfield and the prospect Qana gasfield on the Lebanese side.
Energean started production at Karish late last year and France’s TotalEnergies is due to begin drilling the Qana gasfield later in 2023. The Seliger Aframax tanker, capable of carrying about 700,000 barrels of crude, was visible on satellite tracking next to the Energean Power FPSO. A firefighting vessel, the EDT Aurora from Cyprus, was also positioned near the tankers. Vitol, the world’s largest independent oil trader, has a deal to offtake and market the Karish cargoes internationally, Energean said.
Energean’s CEO Mathios Rigas said he was happy to help Israel join “the club of international oil exporters” and said it was a “milestone” for the company. In the past decade, multiple discoveries in the waters of the eastern Mediterranean have helped reduce Israel’s dependence on imported fossil fuels. Israel is now self-sufficient in natural gas, which has reduced its reliance on coal and helped smooth ties with its neighbors through export agreements to Egypt and Jordan, although it still imports the majority of its crude oil.
While Karish is primarily a gas field, the success of its associated oil production is crucial to the economics of the project for Energean, according to people familiar with the matter. The price Energean receives for the gas it produces at Karish is lower than international prices because Israel is a relatively isolated market. But the associated oil can be shipped internationally by tanker with Energean expected to get closer to the global price for its crude, which will be known as Karish Blend.
Israel’s largest gas field, Leviathan, which started up in 2019, also produces some associated crude oil (condensate) that is sent to domestic refineries. Energean’s oil and gas production, which includes operations in Israel, Egypt, Italy and Croatia, is expected to rise with the ramp-up of Karish from about 41,000 barrels of oil equivalent a day to 150,000 boe/d by the end of the year and 200,000 boe/d in 2024. Israel is still largely reliant on imported crude for its 300,000 b/d refining sector, with domestic demand of about 250,000 b/d.
Share on