Energean Signs $2B Agreement to Supply Gas to Kesem Energy

Wedoany.com Report-Apr. 21, Energean plc announced that its subsidiary, Energean Israel Limited, has entered into a gas sale and purchase agreement with Kesem Energy Ltd. for the supply of natural gas to Kesem’s new power plant in HaMerkaz, Israel. The facility is expected to commence operations before the decade’s end.

The contract is for the supply of gas to Kesem's new power plant in HaMerkaz, Israel, which is estimated to be operational before the end of the decade.

The agreement stipulates that Energean Israel will deliver approximately 1 billion cubic meters of gas annually from the mid-2030s until the contract’s conclusion. Limited gas volumes will also be supplied intermittently prior to the main supply period. Subject to Kesem securing financial close for the plant by January 2026, the contract is valued at over $2 billion, covering around 12.5 billion cubic meters over roughly 17 years. It includes provisions for floor pricing, take-or-pay obligations, and price indexation, aligning with Energean’s other long-term contracts.

Energean CEO Mathios Rigas stated: “We are pleased to announce the signing of another new contract, this time with Kesem, whose new planned power plant demonstrates the robust and growing long-term demand for natural gas in Israel.” He added: “Energean has been a major underwriter of both energy security and transition in Israel and the broader region. We are delighted to continue to meet the needs of Israeli clients and society.”

Rigas further noted: “This contract also reflects our long-stated commitment to securing stable and reliable long-term cash flows. We have now secured around $20 billion in contracted revenues over the next two decades.” He emphasized: “Our strategy emphasises stability and resilience, evidenced by the fact that over 75 percent of our group production contains floor pricing. This approach safeguards our operations and investments against global financial and commodity price volatility.”

Separately, Energean terminated a proposed sale of its assets in Egypt, Italy, and Croatia to an entity managed by Carlyle International Energy Partners. The decision followed the failure to obtain certain regulatory approvals in Italy and Egypt by the agreed terms of the June 2024 sales and purchase agreement, and no extension was reached.

Rigas commented: “Today, we are announcing the termination of our transaction with Carlyle. This decision was made in the best interests of all our stakeholders, including our employees, investors, host governments, and partners.” He continued: “While I am disappointed that Carlyle was unable to obtain the necessary approvals in Italy and Egypt under the terms of the [agreement], I want to reaffirm that this outcome does not change our strategic direction or our commitment to growth and shareholder returns.”

Rigas concluded: “Italy, Egypt and Croatia will remain core pillars of our operations, and we look forward to driving further investment, development, and value creation in all countries. Our commitment to the Mediterranean and the wider region is unwavering, and we will continue to expand our portfolio, support energy security, and deliver sustainable growth in the years ahead.”