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

Energean plc said its subsidiary Energean Israel Limited has signed a new gas sale and purchase agreement with Kesem Energy Ltd.

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, Energean said in a news release.

Under the contract, Energean Israel will supply approximately 1 billion cubic meters per year from around the middle of the 2030s until the end of the contract period. The company will also supply limited quantities of gas intermittently before the primary supply period.

The contract, subject to Kesem achieving financial close for the plant by January 2026, represents over $2 billion in revenues and around 12.5 billion cubic meters in contracted supply over the approximately 17-year period, Energean said, adding that it contains provisions regarding floor pricing, take or pay and price indexation.

Energean said the agreement is “in line with the other large, long-term contracts” within its portfolio.

Energean CEO Mathios Rigas said, “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. 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”.

“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,” Rigas continued.

“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. It is and remains one of the core tenets of our strategy and investment thesis,” he said.

Last month, Energean said it terminated its agreement regarding the proposed sale of its portfolio in Egypt, Italy, and Croatia to an entity controlled by Carlyle International Energy Partners.

Certain regulatory approvals in Italy and Egypt were not obtained or waived by Carlyle in accordance with the sales and purchase agreement signed by the parties in June 2024, Energean said in an earlier statement.

Further, Energean said it was not able to reach an agreement with Carlyle to extend the deadline of the agreement.

Rigas said, “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. These groups rely on clarity of ownership and responsible stewardship to ensure the effective management of our vital oil and gas assets, and we remain fully committed to meeting these expectations”.

“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. Energean remains a strong, diversified oil and gas company, and we are excited to continue building on our successes,” Rigas continued.

“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,” he concluded.

To contact the author, email rocky.teodoro@rigzone.com