Coronavirus could delay Energean's Karish project

(Sharecast News) - Mediterranean-focussed producer Energean Oil and Gas updated the market on the potential impacts of the novel coronavirus outbreak on the construction of the Energean Power FPSO Hull, which is currently being built on Liuheng Island in China, and the overall project timetable.
The FTSE 250 company said work on the hull was ongoing and, at this stage, the Karish Project was still on track to deliver first gas in the first half of 2021.

It noted that several countries, including China, had issued emergency travel and transportation restrictions, which had an immediate impact on the availability of labour and resources in affected areas, including Liuheng Island.

Energean said it received a notice under its engineering, procurement, construction, installation and commissioning (EPCIC) contract with TechnipFMC over the travel restriction, constituting a force majeure event, potentially entitling TechnipFMC to claim an extension of time under the contract.

Energean, in turn, issued corresponding notices to its buyers of Karish gas and other relevant counterparties.

"The rapidly-evolving nature of these circumstances is such that it is impossible, at this stage, to determine the overall impact, if any, on Energean's project timeline," the board said in its statement.

"However, work is still progressing well in the Chinese yard with approximately 550 staff on site; and Energean is working actively with TechnipFMC to ensure that all appropriate measures are being taken to avoid or mitigate any delay.

"Based on the information available at this stage, Energean still expects that the Karish Project remains on track to deliver first gas in the first half of 2021."

The company said it would provide further updates as the situation became clearer.