fine tuning of materials selection
(stainless vs. carbon steel for the HP
manifold); selection of main equipment vendors, for instance for the
compressors and power generation
equipment; and selection of the
FPSO fabrication location.
From the start, we have worked on
the basis of designing the simplest
possible FPSO. Challenges related
to simplification were addressed in
the feasibility phase and refined in
the concept phase. We are of course
looking at ways to mitigate costs if
possible, but overall cost is not the
main driver. Any cost reduction op-
portunity is assessed to ensure it
does not drive down overall Value. All
costs are assessed on a total life-cycle
basis including opex over what will
be a very long production phase of 25-45 years.
Offshore: What will be the FPSO’s daily
gas processing capacity? Is there a need for
water handling/reinjection or other special
Moore: We have designed a system that
can handle around 800 MMcf/d once it is fully
installed. If needed in the future, a second riser
will be included. The FPSO will accommodate
two 400 MMcf/d trains of gas processing
equipment. All utility systems, including oil,
water, power and so on, were always sized to
cope with 800 MMcf/d production. Produced
liquids will be separated in the hull of the vessel. Light hydrocarbon liquids will be loaded
to shuttle tankers every six to eight weeks.
The FPSO accommodates storage for up
to 100,000 bbl of water. Water disposal will
be irregular due to the high storage capacity.
The produced gas is treated through a Joules
Thomson plant. No hydrate inhibition system
is needed due to the short distances from
the wells to the FPSO. Water is removed in
an MEG system and liquids are separated
by gravity. Electrically-driven centrifugal gas
compressors are used for transport to shore.
Offshore: Are you planning novel ways to cut
the costs of logistics for this project?
Moore: The FPSO is located about 50 mi
[80 km] from Haifa port, which will be used
for marine and air logistics. Compared with
more remote operations logistic costs will be
modest. Where possible, boat transport will
be used for routine crew changes, minimizing
travel by helicopter. The FPSO has been kept
as simple as possible to limit offshore manning
and maintenance requirements. This in turn
helps minimize logistic costs. In Greece, Ener-
gean manages all its logistic assets internally.
With its strong marine/shipping background
it is possible that the company will directly own
the supply and crew change vessels during the
long production phase. Logistics in the drilling
phase will likely comprise chartered vessels.
Of fshore: The gas will tie into the INGL [Is-rael Natural Gas Lines] distribution network.
How does this arrangement work?
Moore: INGL is a state-owned company
responsible for running the gas distribution
system in Israel and for making connections
to neighboring countries, i.e. Jordan, Palestine,
Egypt. We are working closely with INGL to de-
fine the interface between the Energean sales
gas system and the INGL distribution system.
Energean and INGL have agreed on a novel
design for the sales gas pipeline. The final 10
km [ 6. 2 mi] of this line will be transferred to
and operated by INGL after installation and
start-up by Energean. This will allow third
parties to tie into this state-owned section
offshore via pre-installed branches. The line
will increase in diameter about 15 km [ 9. 3 mi]
from shore, from 24-in. to 32-in., maximizing
capacity for third parties. The line has been
designed to operate at pressures higher than
the rest of the distribution system. This enables the line pack in the line to be employed
to smooth out supply and demand fluctuations
to a degree. Pressures will be reduced at Dor.
The Karish infrastructure will not interface
with any facilities owned or operated by the
Noble-led partnership. The government of Israel
was keen for Energean to install a totally standalone system to engender both competition and
security of supply. In any case, screening work
showed that a shared development was unlikely
to add value to the Karish and Tanin project.
Of fshore: Does Energean plan to
appoint a contractor to build and
lease the FPSO and gas line?
Moore: There was never an intent
for a third party to build and lease to
Energean the FPSO. A lease option
was considered, but this would have
involved setting up a new company
through which the FPSO would be
developed. This is an approach followed by many oil majors around the
world. There is no plan to structure
the project in this manner and we will
not be tendering for a lease-owned
FPSO. We have, however, explored
the possibility of a third party owning
part or all of the sales gas pipeline,
and as stated earlier, INGL will eventually own the last 10 km. But only
a gas producer or INGL can hold
a permit for operating a gas pipe-
line, excluding the option to set up
a pipeline operating company with
Of fshore: What was the attraction to Kerogen of this particular project?
Moore: Kerogen wanted to invest in Karish/Tanin given that this project represented
an opportunity to partner with Energean, a
credible, E&P independent focused on the
Eastern Med region, and a world-class off-
shore development asset located in an attractive geographical setting.
Of fshore: Do Energean/Kerogen need to
negotiate further gas sales before committing to an FID?
Moore: Energean Israel, a company in
which Energean and Kerogen hold 50% each,
has already signed two gas sales agreements
[GSAs] and five MoUs exceeding 3 bcm/yr. We
are working to sign the remaining GSAs and
to achieve the planned FID [field investment
decision] by year end.
Karish and Tanin will deliver natural gas
to the Israel market during the term of the
leases, which run until 2044 with an option
of a 20-year extension. Other hydrocarbon
liquids may be exported to both regional and
Current certified contingent resources will
allow us to produce with a plateau of 4 bcm/
yr over a period of about 18 years (allowing for
ramp-up and tail), and as already mentioned,
there is significant upside in the Karish and
Tanin leases and in other blocks not yet explored and future discoveries that could be
tied back to the FPSO. The leases allow for
an automatic extension of 20 years should all
obligations be met. Hence the total production
phase could be up to 45 years under Energean’s
management. All currently discovered gas re-
sources will be developed and sold in Israel. •
Location of Karish and Tanin fields
in the deepwater Israeli sector.