UK-based Energean said Jan. 21 that first gas from its flagship Karish offshore field in Israel could be delayed past the end of 2021 due to COVID-19 related manpower issues at a shipyard in Singapore, where its dedicated production ship is being prepared.
In a trading update, Energean said first gas could slip into first-quarter 2022 if the workforce at the shipyard is not increased.
It said it continued to target sailaway of the 8 Bcm/year capacity Energean Power floating production, storage and offloading vessel from Singapore to Israel in the third quarter, with first gas around year-end 2021.
But it said the timetable required a full ramp-up in manpower at the yard, which has plateaued at about 1,000 workers since December 2020 primarily due to COVID-19 working conditions.
"Energean and its contractors are in ongoing discussions to achieve the required workforce numbers to deliver first gas around year-end," it said.
"However, in the case that no further ramp-up in the workforce is achieved, first gas could slip by between two and three months."
It added that there was "limited risk" to the workforce falling below current levels, and remains confident that some mitigating actions can be delivered to optimize the timetable.
2021 guidance
Energean, which last month closed its acquisition of Italy's Edison E&P, said it expects production to average 35,000-40,000 b/d of oil equivalent in 2021, down on pro forma output of 48,300 boe/d last year.
Energean's production was limited to small volumes from Greece before it completed the $203 million acquisition of Edison E&P, which gave it upstream assets in Egypt, Italy, the UK, Croatia and Malta.
The guidance for 2021 is lower than pro forma output last year due to investments in Egypt and Italy being delayed until after the Edison E&P deal was completed "to ensure workstreams are optimized."
It also assumes no meaningful contribution from Israel in 2021, it said.
Nonetheless, the company looks very different in 2021 than it did in 2020 after the Edison E&P closure.
"We completed the first phase of our transition to become the leading independent gas producer in the Mediterranean with the completion of the acquisition of Edison E&P," CEO Mathios Rigas said.
"The second phase of that transformation will be completed once Karish, our multi-Tcf flagship gas project offshore Israel, commences production," Rigas said.
Last year, a further 1.8 Bcm/year of sales agreements were signed taking the total to 7.4 Bcm/year at plateau, meaning the Energean Power FPSO will be 93% utilized.
"Energean is exploring options to fill the remaining 0.6 Bcm/year spare capacity in its FPSO," the company said.
Egyptian FID
In a separate statement Jan. 21, Energean said it had taken final investment decision on the North El Amriya and North Idkunea, or NEA/NI, concession offshore Egypt.
The NEA concession contains two discovered and appraised gas fields -- Yazzi and Python -- while the NI concession contains four discovered gas fields, one of which is readied for development.
NEA/NI is due to deliver first gas in the second half of 2022, with peak production expected to be 90 MMcf/d.
When Brent prices are above $40/b, gas will be sold at $4.60/MMBtu, which is the highest achieved to date for shallow water gas production, offshore Egypt, Energean said.
Total capital expenditure is expected to be about $235 million, the majority of which is expected to be incurred in 2022.
