Energean signs $1.0bn gas sales and purchase agreement

Offshore exploration firm Energean Oil & Gas has inked a gas sales and purchase agreement for the sale of approximately 0.5bn cubic metres of natural gas per year.

Energean will sell Isreali outfit MRC Alon Tavor as much as 8bcm over the term of the contract, with supply set to commence following first gas at the firm's Karish operations.

The contract term will last for a period of 15 years from the date of signature.

Energean said the deal was linked to the Israeli Electricity Production Index and had floor pricing and take-or-pay provisions.

The group estimates that the GSPA will add revenues in excess of $1bn over the term of the contract.

Energean also recently signed a contract amendment with OPC Rotem that accelerated the rate of gas consumption and increased annual gas supply by 0.2bcm per year, however, this was accompanied by a shortening of the contract term meaning there was no change in the total contract quantity of gas sold.

As of 0930 GMT, Energean shares had inched up 0.77% to 918p.