Energean has announced the final investment decision (FID) for its Katlan development project offshore Israel in the Mediterranean Sea, with a capital expenditure of approximately $1.2bn.
The development will proceed in phases, with the first phase involving a subsea tieback to the existing Energean Power floating production, storage, and offloading vessel (FPSO). This approach is expected to extend the production plateau from the FPSO and will not incur seller royalties or carry export restrictions.
The Katlan development project aims to support Energean’s existing gas sales agreements and target international markets. Production is scheduled to commence in the first half of 2027.
Energean CEO Mathios Rigas said: “This decision marks yet another positive milestone on Energean’s growth journey. The decision to move ahead with Katlan will not surprise anyone that knows our successful track record, given our commitment to the swift development and production of gas assets.”
The engineering, procurement, construction, and installation (EPCI) contract for the subsea scope had been recently awarded to TechnipFMC. The contract includes a four-well-slot tieback capacity to a single large approximately 30km production line, which will be used for future phases of the Katlan development.
The Katlan project marks Energean’s first use of TechnipFMC’s configure-to-order Subsea 2.0 production systems.
The capital expenditure projected by Energean covers the subsea infrastructure, upgrades to the FPSO topsides for monoethylene glycol (MEG) treatment, injection, and storage, and the drilling of the first two production wells, named Athena and Zeus.
The two wells are expected to produce 170 million barrels of oil equivalent (mmboe), including 26 billion cubic metres (bcm) of gas, with 2P reserves.
The Israeli Ministry of Energy and Infrastructure has granted a 30-year lease for the Katlan area, with a 20-year extension option. The Ministry has also ratified the Hermes discovery in the newly named Drakon area (Block 31), which was identified during the 2022 drilling campaign.
Discovered by Energean in 2022, the Katlan area is fully owned and operated by the company. The fields are situated at water depths of up to 1,800m.
The development plan for Phase 1, which includes the Athena, Zeus, Hera, and Apollo fields, was approved by the Israeli Government in December 2023. This phase includes a total production of 229mmboe, which comprises 35bcm of gas.
The wider Katlan area also contains an additional 223mmboe, including 34bcm of gas, of prospective volumes across other accumulations. These will be developed in future phases, requiring a shorter pipeline connection to the Phase 1 pipeline and benefiting from Phase 1 FPSO upgrades and investment.
Phase 1a will focus on the Athena and Zeus structures, while Phase 1b will target the Hera and Apollo fields.
