Energean Is Said to Seek $1.2 Billion Loans for Israeli Gas
Energean Is Said to Seek $1.2 Billion Loans for Israeli Gas
(Bloomberg) -- Energean Oil & Gas SA is trying to raise about $1.2 billion of loans to develop two natural gas fields off the coast of Israel, according to people familiar with the matter.
The Greek energy explorer is working with arranger Morgan Stanley to secure funding from banks and institutional investors, including Israeli firms, the people said, asking not to be identified because the transaction is private. Energean is planning on getting the financing early next year, one of the people said.
The money will pay for a floating production storage and offloading unit to extract natural gas from the Karish and Tanin reservoirs, as well as a pipeline to transport the fuel back to Israel. Energean has put the total cost of developing the natural-gas fields at about $1.5 billion. The company may raise the remaining $300 million by selling equity at a later stage, the people said, adding that it’s yet to decide where the shares would be listed.
Morgan Stanley and Citigroup Inc. are advising Energean on the potential share sale, the people said. Energean is "evaluating all options to secure project financing for Karish and Tanin," a company spokesman said, adding that no decisions have been made. Representatives for Morgan Stanley and Citigroup declined to comment.
Securing financing is the next hurdle for Energean as it seeks to bring Karish and Tanin on line by early 2021. The energy explorer has already signed contracts to supply Israeli companies with about 4 billion cubic meters of natural gas per year, more than the amount Energean thought would be necessary to greenlight the project.
Energean expects to make a final decision on how it will spend the funds to develop the fields in the first quarter of 2018.
To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net.
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Paul Armstrong, Jon Menon
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