Following its initial public offering on the London exchange, Greek energy company Energean said it was making a $1.6 billion investment in gas offshore Israel.

Energean said it was using $405 million from its IPO to help move forward with a $1.6 billion final investment decision for the Karish and Tanin developments off the coast of Israel. The Greek company will finance, with underwriting, 70 percent of the project, with its partners at Kerogen Capital taking up the slack.

The Greek company said the project will proceed through a new floating production facility that can treat 800 million standard cubic feet of gas per day and store as much as 800,000 barrels of equivalent.

"The Karish and Tanin development will bring competition and security of supply to the Israeli gas market, and will support Energean's strategy to become a major player in the gas developments of the East Mediterranean," CEO Mathios Rigas said in a statement.

Energean already has long-term contracts with power producers and industrial companies in Israel. A 55-mile pipeline will connect the floating facility to Israeli coastal infrastructure feeding the domestic grid.

Israel holds vast natural gas reserves offshore. Delek Drilling, an Israeli company, estimates its Leviathan field holds about 21.4 trillion cubic feet of natural gas, an estimate that's about 13 percent higher than when the field was discovered in 2010.

A good portion of the gas reserves in Leviathan are designated for exports. A Jordanian power company agreed to a take-or-pay scheme for gas from Leviathan. That agreement was worth an estimated $10 billion and was the first such agreement for the field.

In late 2016, the Leviathan partners said they reached an agreement with Dalia, the largest private power plant in Israel, to supply fuel for up to 20 years once production at the field begins.

Energean plans to drill three wells in the Israeli concession in 2019. Commissioning is expected by 2021.

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