Energean plc (LSE: ENOG, TASE: אנאג) has announced a significant step in its expansion strategy with the Final Investment Decision (FID) for the Katlan development project in the Israeli waters of the Mediterranean Sea. The decision to proceed with this substantial venture marks a pivotal moment for Energean, highlighting its commitment to enhancing gas production and extending its operational footprint in the region.

Key Investment and Development Details

The Katlan development project will be executed in phases, with an initial subsea tieback to the existing Energean Power Floating Production Storage and Offloading (FPSO) unit. This development is expected to bolster the production plateau from the FPSO, introducing volumes that bypass seller royalties and export restrictions. The phased approach will ensure that production underpins Energean’s current gas sales agreements and targets new international markets, with first gas anticipated by the first half of 2027.

The Engineering, Procurement, Construction, and Installation (EPCI) contract for the subsea scope has been awarded to TechnipFMC. This contract encompasses the creation of a four-well-slot tieback system connected to a nearly 30-kilometre production line, designed to accommodate future phases of the Katlan project. The total capital expenditure for this development is estimated at approximately US$1.2 billion. This budget covers the construction of subsea infrastructure, upgrades to the FPSO topsides—including MEG treatment, injection, and storage enhancements—and the drilling of the first two production wells, named Athena and Zeus. The planned reserves for these wells amount to 170 million barrels of oil equivalent (mmboe), which includes 26 billion cubic meters (bcm) of gas.

Regulatory Approvals and Discoveries

Energean has secured a 30-year lease for the Katlan area from the Israeli Ministry of Energy and Infrastructure, with an option for a 20-year extension. Additionally, the Ministry has ratified the Hermes discovery, located in the newly designated Drakon area (Block 31), which was part of Energean’s 2022 drilling campaign.

Mathios Rigas, Chief Executive Officer of Energean, remarked on the significance of this decision. He noted that the FID for Katlan is a testament to Energean’s proven track record and its dedication to the rapid development of gas assets. Rigas expressed satisfaction at the Ministry’s approval of the Katlan lease and the confirmation of the Hermes discovery, highlighting that these advancements de-risk nearby accumulations and reveal potential in the Drakon area.

Project Scope and Future Phases

The Katlan area was initially discovered by Energean in 2022. As the sole owner and operator of the Katlan Lease (I/21 Katlan), Energean will oversee the project’s development in water depths reaching up to 1,800 metres. The field development plan for Phase 1, including the Athena, Zeus, Hera, and Apollo fields, has already received approval from the Israeli Government as of December 2023. This phase alone holds 229 mmboe of reserves, including 35 bcm of gas. Future phases are expected to develop an additional 223 mmboe, including 34 bcm of gas, with a streamlined pipeline connection benefiting from the Phase 1 infrastructure and investments.

  Drakon Area, Energean, energy infrastructure, energy investments, FPSO, Gas Production, Hermes Discovery, Israeli Gas Fields, Katlan Development, Mediterranean Sea, TechnipFMC