Energean Seals $1.4 Billion Gas Deal With Israel's Sorek Power Plant

Energean, the British-Greek energy company operating Israel's Karish gas field, has signed a significant agreement to supply natural gas to the new Sorek power station. The deal is valued at approximately $1.4 billion and spans about 15 years, with total gas supply expected to reach up to 7.7 billion cubic meters (BCM).

This latest contract brings Energean's total future contracted revenues from major Israeli electricity producers to over $5 billion, including previous agreements with the Ksam and Dalia 2 power plants. The Sorek deal, finalized in the first half of the year, will see Energean supply up to 0.5 BCM of gas annually starting in late 2029, increasing to 0.6 BCM per year from September 2035. The agreement includes a floor price, indexation mechanisms, and a take-or-pay clause, ensuring payment for a minimum gas volume.

The company, listed in London and Tel Aviv, reported a net profit of $160 million for the first half of the year, a 45% increase year-over-year, with free cash flow rising 35% to $250 million. However, production revenues decreased by 8% to $743 million, and adjusted EBITDAX fell 5% to $478 million. This decline was partly due to a 41-day production halt in Israel during February and March, related to the conflict with Iran and the "Operation Iron Swords" military campaign, which temporarily shut down the Karish and Leviathan fields.

Energean noted that production has since recovered, with August output exceeding 180,000 barrels of oil equivalent per day (boepd). The company maintained its full-year production forecast at 130,000-140,000 boepd. Development of the Katlan field is also progressing, with Energean anticipating production to begin in the first half of 2027. The company invested $267 million in Katlan during the first half of the year, with over 60% of its $1.2 billion development budget now committed.

Looking ahead, Energean CEO Mathios Rigas announced plans to commence gas exploration in Block 2 in Greece next spring, in partnership with ExxonMobil. The company is also exploring further growth opportunities in Europe, the Middle East, and Africa through mergers and acquisitions. Energean is also interested in participating in Israel's fifth natural gas tender and is discussing potential collaborations with ExxonMobil for Israeli ventures.