Energean Advances 1.2 Billion Dollar Katlan Gas Reservoir Project Offshore Israel
Energean is advancing a $1.2 billion development of the offshore Katlan gas reservoir to strengthen Israel's energy supply, with first gas expected in 2027 amid rising local electricity demands.
Natural gas has become one of the most critical resources in the Israeli economy, accounting for approximately 74% of the nation's electricity generation in 2025. As electricity demand continues to rise and energy sector experts warn of potential future gas shortages, a massive offshore engineering project is underway in the Mediterranean Sea to bolster Israel's gas supply. Behind this multi-billion-dollar operation lies a complex economic story involving a foreign energy firm and Israeli shareholders.
The Katlan Reservoir Project
Located about 100 kilometers off Israel's coast, the energy company Energean is working to connect the Katlan gas reservoir to the existing Karish rig. According to reports, the operations involve laying approximately 30 kilometers of subsea pipelines, drilling production wells, and hoisting facilities weighing around 350 tons onto an active production platform. The project is estimated to cost roughly $1.5 billion, while the company's approved budget for the current development phase stands at $1.2 billion. First gas from the project is expected to flow in the first half of 2027.
The investment is spearheaded by Energean, a British energy company with Greek roots founded in 2007 and led by its founder, businessman Mathios Rigas. The company is publicly traded on the London and Tel Aviv stock exchanges. Israeli financial institutions, including Phoenix, Migdal, Clal, and Harel, hold stakes in the firm, exposing public savings and investments to the company's performance.
Long-Term Contracts and Energy Security
Energean has secured a series of long-term gas supply agreements with Israeli power producers, including the Qesem, Dalia 2, and Sorek power plants, representing over $5 billion in future revenues. The most recent agreement, signed in September with the Sorek power plant, is valued at approximately $1.4 billion over a 15-year period.
"The growing scale of domestic gas production strengthens our energy resilience, yet market competition remains crucial for consumer prices," industry analysts note.
Despite the massive infrastructure push, energy experts warn of a looming long-term supply crunch. According to the Dayan Committee report published last September, Israel's proven and probable gas reserves are estimated at roughly 826 billion cubic meters, against cumulative domestic demand projected to reach 515 billion cubic meters by 2048 under baseline scenarios. However, export commitments and rising local consumption complicate the long-term outlook.
